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Can Facebook Really Succeed In Local Without Resellers?

Google spent quite a few years trying to get small business owners to self-serve with AdWords. And to some degree with Google My Business (a product suite that includes the former AdWords Express) the company is still trying.

Yet it has also concluded that GMB is not enough; the market is too diverse, vast and challenged by self-service to rely on that approach alone. For a number of years Google has run a reseller partner program in parallel. It has been revamped a couple of times. But Google is firmly committed and wants it and its partners to succeed.

The company came to this position after several years of trying direct acquisition with some but limited success.

Facebook COO Sheryl Sandberg was a key executive at Google and very involved with Google’s local/SMB efforts for a time. She knows the space and its myriad challenges as well as anyone.

Sandberg also likes to discuss serving business owners through Facebook as well as  the company’s SMB opportunity. Indeed, Facebook has placed a lot of emphasis on converting small business users into advertisers.

The company says it has roughly 1.5 million advertisers globally, a substantial number of which qualify as small businesses. It’s not clear how much on average each is spending on Facebook Ads. It’s also not clear how many are based in North America vs. elsewhere (but see this analysis of that question).

This summer Facebook hosted five bootcamp “Facebook Fit” sessions in different US cities to introduce social media best practices to business owners and to expose them to Facebook advertising and its benefits.

Globally the company has 30 million SMBs with active Pages; At least five million are not traditional local businesses but e-commerce sellers and other internet-based businesses. However the majority are more traditional SMBs that mostly fulfill offline.

The company hopes to generate millions in new ad revenue by moving a chunk of those organic SMB users over to the advertiser column. The question thus arises: can Facebook do this without the aid of resellers like Google has developed?

My guess is that Facebook is giving self-service and direct acquisition a very strong effort and trying a range of tactics. It has the luxury of time and resources.  However I also believe that thoughtful people in the company believe, eventually, there will need to be a reseller program, though perhaps not modeled explicitly on the Google program. Again I’m speculating.

There are several companies, probably most of those in the Google reseller camp, who would welcome the opportunity to sell Facebook advertising to local business owners. It’s an easier product to explain and probably to sell than a social media management service that focuses on organic updates.

I wouldn’t be entirely surprised if Facebook has done some testing of third party resellers in a very limited context. If so nothing has yet convinced the company that it can’t directly acquire SMBs at scale all by itself.

One assumes that eventually, like Google, Facebook will come to a recognition that it needs a mix of direct acquisition and third party sales channel relationships if it wants to address the millions of SMB-prospects in the market. Today any third party can provision Facebook ads on behalf of an SMB or assist in that process. So what we’re really talking about is a structured program that offers incentives, inside access and a range of other advantages that arms-length vendors and agencies don’t enjoy.

What do you think? Do you believe 1) that Facebook will eventually develop a reseller program and 2) if so, how long before the company does so in earnest?

2 Responses to “Can Facebook Really Succeed In Local Without Resellers?”

  1. Ben Barney says:

    Great post Greg. I would very much like to see FB open up a reseller channel. In particular, I believe there is a lot of value in retargeting through FBX for small businesses. But most SMBs certainly need help in onboarding and managing this. I have used Perfect Audience with a great ROI when used in tandem with SEM so would see it as a perfect complement to those selling paid search or leads based products.

  2. Greg says:

    Thanks Ben. I agree there’s a lot of potential there for everyone involved.

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