With Square Deal, Facebook’s Alt ‘Reseller’ Strategy Starting to Emerge

Like ConstantContant and AdRoll before it, Square recently announced that it was integrating Facebook Ads into its “Customer Engagement” suite. At Square, Facebook Ads now join email marketing as layers on top of its POS and payments services for local businesses.

Square also said that it will be “adding support for other social channels in the coming weeks.” That will probably first be Instagram (owned by Facebook) and then other API integrations. The Square blog post showed an example ad, which can be targeted to “all customers” or a particular audience subset, presumably based on purchase behavior. (Square automatically populates a customer database using segmented purchase information obtained from its POS.)

Square Facebook Ads

One of the most compelling aspects of the Square and Facebook Ads integration is its hypothetical closed loop:

Now your Facebook Ads results and Square sales data are integrated, so you can connect your Facebook marketing budget to actual sales and understand exactly what your customers respond to. We will also be adding support for other social channels in the coming weeks.

This plays into two themes that we explored at LSA16: the need to prove value in more concrete ways to SMBs and the connecting of dots between online and offline.

There are two connected observations about the Square integration I want to make:

  • It seems to point to a Facebook”reseller” strategy very different from Google’s
  • It also reflects the emergence of non-traditional channels as a preferred way to reach the SMB market

The deals with ConstantContant, AdRoll and now Square are technology (rather than sales) integrations that allow each of these companies to simplify the process of generating Facebook Ads for their small business customers. These types of technology integrations would not be beyond the expertise of some traditional media sellers — especially working with PPC platforms that have social ads capabilities.

Indeed, independent of any direct deal with Facebook, traditional publishers could simply start selling Facebook Ads (some are) and working with PPC platforms to scale that approach if they so choose. They would be wise to start doing so, given that Facebook/social media is one of the top three channels in demand among SMBs.

Facebook cannot acquire all the SMB advertisers it wants through pure self-service. Myriad intermediaries and aggregators will be required to help the company more fully penetrate its installed base of 45 million SMBs with active organic Pages. Facebook understands this, though it doesn’t often admit it in public.

What’s interesting here is that the deals above appear to reflect a very different go-to-market approach vs. Google’s reseller program, with a focus on technology to simplify ad buying and gain additional reach and scale, rather than more traditional “sales channels.”

Let me know if you see things differently.

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