Figuring out the value of a Facebook FB +0.31%fan has become more complex for many
small-business owners, ever since the social-media giant began asking businesses
to pay to "promote" their posts.
Under a program rolled out in May, businesses pay Facebook Inc. anywhere from
$5 to hundreds of dollars to promote a post to the news feeds of users who have
"liked" their page, plus Facebook friends of those users. The price depends on
how many users a business wants to reach.
Source: http://online.wsj.com/article/SB10000872396390444657804578048750390978708.html?mod=technology_newsreel
It looks like Facebook is looking for futher ways to increase their revenue streams by launching this program for Promoted Posts, but the challenge is for businesses to determine the real worth of these posts being promoted to users' news feeds. Since the average post reaches such a low base (~16%) of followers, seems like Facebook has tapped new growth potential through business customers.
SMBs have become more dependent on social media for advertising, but the challenge is for these businesses to justify the costs FB will charge for Promoted Posts and getting them to a larger audience of followers. FB has definitely been able to control this eco space by limiting the reach of this advertising space. Most SMBs do not have the time nor resources to focus on social media advertising, therefore no choice but to pay Facebook to reach a larger group of their followers. Facebook has hit gold again, but they will need to provide data to their business customers justifying the costs for Promoted Posts showing how much business gets lured in through this paid program.
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