Facebook deals a MASSIVE blow to small business

Yesterday afternoon, developers all over began complaining that they couldn’t create FBML pages, the necessary elements of custom landing pages.  The new rule was that you had to either have 10,000 fans or have an account rep, which means that you’re spending money on advertising.  We have some clients that spend $200k on Facebook ads, so it’s not clear what the threshold is to qualify to have a rep– I believe it’s around $5k a day, but that changes and Facebook will not comment on the issue.

In short, you are either a major brand or you are willing to pony up money like a major brand.  If you’re not, then tough.  The catch-22 is that to have a fighting chance to grow to 10,000 fans, you need a custom landing page tab to allow you to ask users to fan you, insert videos, and perform e-commerce.  Overnight, Facebook has instantly zapped a number of businesses that were reliant upon their Facebook presence to promote themselves.  

At the same time, a number of agencies and software shops such as BlitzMetrics that specialized in Facebook pages are also in trouble. Even those firms that specialize in Facebook ads will be massively hurt, since without custom landing pages, their conversion rates will suffer.  Those pages that were fortunate enough to have already made custom tabs– their default setting reverts back to the wall.

WHAT THIS MEANS

If you want to play, you have to pay.  That’s pretty clear— unless you’re spending money, and a LOT of money, you’re not important. For our big brand clients, not that big a deal. For local businesses, this just underscores the risk of building your business on someone else’s website. You’re at the whim of their policy changes.  Keep your regular website by all means as an insurance policy.

If you’re a household name, you have far less competition for traffic now– consider yourself lucky, but also know that privacy is a major hurdle that Facebook is struggling with– and the timing of this decision is quite poor.

Advertising can still save the day.  When Allah giveth, Allah also taketh away. Sure, we lost the best part of Facebook pages, but we do still have some insanely good targeting on Facebook ads, where you can target down to the individual person.  As a test, I ran an ad targeting folks who live in Alabama, work at BlitzMetrics, and are of an certain age.  Only one person in the world meets that criteria– and I bombarded him with ads that have his name in all caps.  You can still run your ads to your regular website and get fans using global like.

WHAT YOU SHOULD DO

Make sure you are running multiple sources of traffic and maintaining at least your Facebook page and regular (WordPress) site.  You never know when one company stumbles and another arises. Don’t put all your eggs in one basket.  Facebook may reduce their 10,000 fan requirement– in the past, they had high minimums to choose a vanity url.  Who’s to say that they may change this rule once they realize how badly it hurts the local businesses who just can’t get to 10,000 fans.

Try out MySpace and Google Content to hedge your bets on Facebook.  The traffic is not as cheap, but these folks have been pouncing at Facebook’s missteps.  I’d say that this recent change is the most FRUSTRATING thing that I’ve seen from Facebook so far– far more than Beacon or even the recent privacy issues.  Facebook is a young company– some of the brighter folks there are probably lobbying to get this changed– and youngsters when they fall down, can often get right back up and learn from their mistakes.

Meanwhile, BlitzMetrics is halting the small business page development efforts on Facebook and moving to other platforms such as WordPress.  Jason Calcanis and others are making a stink about Facebook’s recent moves and now deleting their profiles, gathering the masses to leave.  While normal for Jason to gather attention as such, he does have a valid point that when Facebook shifts their policies on pages and apps, as we have witnessed in the last 3 years, then your investment in Facebook is unstable.

How has this change affected you?

UPDATED NEWS:

Facebook has reversed their policy here, as we predicted.  The outcry was enormous.  One source told us that the move was to shut down spammers who were using landing pages to do malicious things. Thus, Facebook hadn’t considered who else would be impacted by that action.

Had Facebook not woken up, our plan of action would have been to continue making automated pages, just focusing on the profile pic for customization. As for advertising, this would have hurt us a bit, since sending users to just the wall versus the landing page tab would have decreased conversion rates. This disaster narrowly avoided points to the risk to sitting on only one platform. In our role as an agency, we have to be wherever the traffic is, so we have to consider organic search, maps, and other ways to get traffic for our clients. Some folks in the Facebook forum have called me ignorant and incorrect in what I’m saying.

If they read the notes carefully and understand the impact, even if we are allowed to still create a landing page tab but NOT specify the default tab, the effect is almost the same. Specifying your homepage tab is just like specifying what is the homepage of your regular site. You know how you can have many tabs on your page, including ones not in the first six that are in the >> on the right? Those are effectively invisible– and that’s the point here. Your default tab setting is critical, as your homepage get most of your traffic.

About Dennis Yu

Dennis Yu is the CTO of BlitzMetrics. He is an internationally recognized lecturer in Facebook marketing, having been featured in The Wall Street Journal, New York Times, LA Times, National Public Radio, TechCrunch, Fox News, and CBS Evening News. He is also a regular contributor for Adweek's SocialTimes column. Dennis has held leadership positions at Yahoo! and American Airlines. He studied Finance and Economics from Southern Methodist University and London School of Economics. Besides being a Facebook data and ad geek, you can find him eating chicken wings or playing Ultimate Frisbee in a city near you. You can contact him at dennis@blitzmetrics.com, his blog, or on Facebook.

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