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SMBs Help Facebook Achieve Advertising Milestone

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Facebook announced last week that the social network has now reached 1 million active advertisers following last year’s major overhaul of its advertising program. Advertising now represents 85% of the site’s total revenue, with the majority of those dollars streaming from small businesses.

Last year, Facebook changed the way ads are displayed on user newsfeeds and streamlined the process by which advertisers purchase space, which many are contributing to the rise in small business advertisers on the network. And there is still strong opportunity for future growth. BIA/Kelsey projects that while more than 50% of small business owners use Facebook pages and groups to promote their businesses, only 16% of small businesses actually buy advertising on the site.

Facebook is working to increase the number of SMBs advertising on the network by reaching out through their incubator program, which guides business owners through the process and benefits of advertising on the platform.

The advertising overhaul seems to be a success for Facebook thus far. The company saw a 43% growth in advertising revenue last quarter, the highest rate posted since its peak in 2011, and a large improvement over the declining growth rates experienced in 2012. Small businesses seem to be happy with the updates as well, noting that advertising with Facebook is cheaper than other platforms and often more effective.

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