Are Local Merchants Cooling On Facebook Ads?

Growth in local merchants' use of Facebook ads has tapered off a bit.

Growth in local merchants‘ use of Facebook ads has tapered off a bit.

Those who are advertising feel satisfied, while those that aren’t said they did not acquire new customers, according to the latest survey by MerchantCircle.

In its poll of more than 2,500 small business owners across the United States, MerchantCircle found that while 96 percent were aware of Facebook’s targeted display ad offering, just 23 percent used it, up only five percent from the local business owners’ social network’s survey six months ago.

MerchantCircle also found that of local merchants that have used Facebook ads, 62 percent would do so again, with those respondents citing ease of use (62 percent) and the ability to start and stop campaigns (55 percent).

However, 28 percent of Facebook ads users said they would not continue, with reasons including:

  • 66 percent said they did not acquire new customers;
  • 41 percent said the service was too expensive (up from 35 percent in June); and
  • 37 percent reported low click-through rates (up from 29 percent in June).

Other interesting findings from the recent MerchantCircle survey include:

  • Nearly 12 percent of respondents had offered at least one daily deal, up 33 percent from June.
  • Google Offers is starting to cut into the daily deals market, as 19 percent of local merchants who offered deals did so via the service, trailing Groupon (26 percent) and LivingSocial (21 percent), but not by much.
  • 63 percent of respondents spend less than $2,500 annually on marketing, and
  • 78 percent reported no plans to increase their marketing budgets.