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Are the Social Media Advertising Changes Good for the SMB?

posted on March 14, 2013


Like many, I read Twitter’s recent announcement of its opening up its advertising API to 3rd party networks with great interest. The new approach promises to make the process of purchasing and placing ads in these dashboards (i.e. Hootsuite) considerably pusheasier. And that’s a good thing. Or is it?

Consider the relatively recent changes that have taken place on the major social networks in the past 12 months or so:

  • Facebook, in the weeks leading up to their IPO, introduced a new tool they called “Reach Generator” that became what we now know as paying to reach your fans through promoted posts.  The announcement was made in Manhattan before an audience of some of the largest advertisers on the planet. The move to promoted posts prompted quite a bit of backlash.
  • LinkedIn rolled out new advertising options to allow businesses to use small block ads on the right rail to promote their products and services, yet the most visible ads remain in the banner ads, which are the domain of large-scale advertisers.
  • Google AdWords announced the move to “enhanced campaigns” to force the inclusion of mobile platform advertising into all AdWords advertising campaigns. (I know this one isn’t a social network, but it is still a fairly significant move).
  • Twitter recently revealed that the cost of the “promoted trend,” a one-day purchase of the top slot on the list of trending topics had increased to $200,000 per day.

In considering each of these moves, I believe we’re seeing the beginnings of a significant trend: social media is boxing out the small and medium-sized business (SMB) advertiser from advertising on its networks.

“Big deal!” some might say.  Big deal, indeed.  Many a business has been built, grown or significantly enhanced through advertising on the likes of Facebook or Twitter.  In fact, a report released by Ad-ology earlier this year indicated that 1 in 5 small businesses plan to increase spending on social media advertising in 2013.  But will those businesses find the social networks welcoming them with open arms?  If the moves noted above are any indicator, it seems that they will not.

Now, I don’t fault a business for trying to make money, especially when each of these networks is living off of venture capital or stock offerings (the noted exception being LinkedIn, which has done quite well for some time now).  And it’s not to say that SMBs are no longer able to advertise on social networks, because the doors do remain open to them. But the issue I see is that the SMBs will only have access to the table scraps while the large-scale advertisers feast on the most valuable placements.  And if that’s the case, does it really make sense for SMBs to put valuable dollars into such poor placements? Probably not.

Advertising is a challenging business.  I’ve been a part of that world for many years and I know the struggles that publishers have experienced as they’ve sought to monetize the digital space.  But I believe the social networks are walking down a dangerous path if they reserve more of their advertising space for companies with deep pockets and effectively crowd out the SMBs.

I hope I’m wrong and that many SMBs will continue to find social media advertising a valuable channel into the future, but if these trends continue, they may be better off putting those valuable marketing dollars into a solid content marketing strategy — without a paid component — instead.

What are your thoughts? Do you think SMBs will be pushed out of the Social Media Advertising space?

 

About The Author

Jon Parks is a digital marketing strategist and owner of Dijital Farm, a digital marketing consulting agency based in Raleigh, N.C. As a consultant, speaker and instructor, Jon helps businesses make sense of social media, the basics of Google, e-mail marketing and more. You can follow Jon on Twitter, add him to your circles on Google Plus and connect with him on LinkedIn.


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  • vniven

    Great observation. Haven’t we seen this story before, with search engine marketing?

    Successful small businesses today understand that content marketing and organic SEO is a better investment than PPC, in general. This is especially true for small brands that few would recognize in an ad. Large brands maxed-out prices for the key terms in most verticals years ago.

    I think social media marketing is probably going to split along the same general lines that SEM did – organic as the budgetary priority for SMBs vs. advertising for larger enterprises. At the same time, many SMBs will advertise. It just won’t pay was well.

    ‘Organic social’ today means monitoring streams manually and engaging with a personal touch. Small businesses are often better than large enterprise at putting a human face on commerce, so that plays to their favor.

    The challenge is time. We need better search, monitoring and alert technologies so SMB owners, marketers and sales pros don’t have to sit in front of a screen all day – which of course, they won’t.

    • http://www.jonparks.com Jon Parks

      Thanks, vniven. Your point about the parallels between social media advertising and the history of SEM is an interesting one. I believe it is valid to question whether or not social media advertising is even a viable option for SMBs going forward. The content marketing movement has exposed the need to create relevant and engaging content from an organic standpoint and that’s where I’d argue SMBs should spend more of their time. Of course, Facebook’s limiting the reach of your page’s status updates makes even that difficult without engaging in pay-to-play. That, among other reasons, is why I’m a proponent of using Google Plus, depending on your marketing goals. Thanks for contributing to the discussion!

  • http://www.searchermag.net/ Vance Woodward

    The benefit of Adwords is it’s scalability. A small business will never be able to compete on an advertising platform for the generalized sort of business that a larger company wants to advertise on, nor should they want to. Unlike any other advertising platform, the small business does still have an option of narrower, more targeted campaigns that still allow them to compete and acquire the kind of business they’re looking for. Concern they won’t be able to compete is like concern that your local Mom & Pop won’t be able to afford a Super Bowl ad http://www.searchermag.net/google-adwords-consultant/

    • http://www.jonparks.com Jon Parks

      I agree, Vance. The scalability of AdWords differentiates is considerably from the other advertising outlets listed in my post. The only reason I included them on the list was because of the move to force inclusion into mobile campaigns (there was a steady stream of criticism about making this “required” instead of optional). Personally, I like the move as mobile’s share of search has grown too large to ignore, but I also like choices in the campaigns I setup. Thanks for joining in the discussion!

  • http://www.incion.com/ web design price list

    SMBs would like to be using Social for similar things, but they say that they just haven’t got the time. Which is unfortunate; it is a great resource.

  • Amita

    Social media marketing is a valuable platform for SMBs to enhance business and to reach more people easily. E-Commerce web integration with social media marketing is the effective way to go viral.

  • LeadGenix

    Hopefully SMBs don’t get pushed out of social media marketing. As was stated in the article, SMBs will always be able to initiate their own marketing on social media sites, but it would be a shame if some of the larger channels on those sites are too cost prohibitive.

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