Q&A with Facebook Director of Small Business Dan Levy (Part I)

Facebook advertising isn’t just for the Starbucks and Coca-Colas of the world. In the past few years, small businesses have taken to Facebook not only to connect with loyal fans, but to advertise to future customers.

Facebook announced two weeks ago that more than 1 million advertisers have purchased some kind of ad unit within the past 28 days. This is huge for the company, and shows that there’s an ecosystem of businesses big and small on the site. Facebook Director of Small Business Dan Levy chatted with InsideFacebook.com about how advertising through the site has proven beneficial for small businesses, and what the company plans to do in the future to continue to help these advertisers who don’t have millions of dollars or a marketing department.

Levy, before joining Facebook in 2008, was a small business owner himself. He founded Justarrive.com, a ticket and marketing service for professional and college sports organizations. He came to Facebook from Pay Pal, where he lead product and operations organizations around the world. Now he leads the team that offers support to small businesses who want to grow through Facebook.

Inside Facebook: You recently celebrated the 1 million advertiser mark at Facebook. Do you have a ballpark figure of how many of them are small businesses?

Dan Levy: Yeah, last week we announced a million active advertisers on Facebook — meaning people that spent in the last 28 days. Obviously there’s a lot more businesses on Facebook that don’t spend right now, but the vast majority of that 1 million are small businesses. When you think about it, there’s just not that many big businesses in the world. I don’t know how many (are small businesses), but it’s a vast majority.

IFB: When did you realize that Facebook could be a force for small businesses?

Levy: It’s interesting. Small businesses have been on Facebook since we started the pages product. We think businesses have been using word of mouth as what would be social media before social media existed forever. Whether it was having their customers talk about them, or talking to folks as they were coming down the street — we think it’s a time-honored tradition that word of mouth helps small businesses.

At Facebook, as soon as we started the pages product, which was a place where something that wasn’t a person could be on Facebook — a place, a business — small businesses were early adopters of that. So we had small businesses on Facebook early on, and now there are more than 16 million local small businesses with a page on Facebook.

We’ve always known that small businesses have been good on Facebook — not only for them, but also because users want to connect with them. I think we’ve obviously seen a lot of momentum in the last few years, especially this past year, as businesses have been using a lot more of our simplified ad products and mobile ad products to reach their customers.

IFB: Facebook has been making a huge push toward simplifying ads, and focusing on the goal — “Do you want to get more page likes?” “Do you want more reach?” “Do you want to get more people in the door?” Has a lot of this push for simplification been geared toward small businesses?

Levy: I think we hit the key point, which is it’s really about the objectives and goals for businesses. The feedback that I hear all the time, as I talk with small business owners, is: we’re trying to get more customers in the door, we want to do more online sales, we want more people to know that we’ve moved to a new location, or we have an application that we want people to buy. We think those are very universal objectives and goals that translate not only for businesses but for small businesses.

Simplification, for us, I think works for everybody, because we know people have limited time and money — especially for small businesses. Their time is as valuable as their money. They don’t have a whole marketing department working for them in some cases. Simplification is about trying to help them reach their objectives as quickly and as powerfully as possible.

IFB: How much are advertisers spending, on average?

Levy: We don’t have how much they’re spending on average, but we do know that we have advertisers, as you know, that spend tens of millions of dollars on Facebook, and advertisers that will spend $5 a week on Facebook. You can get started very small and a lot of businesses on Facebook aren’t paying. They’re using our free pages product and are trying to get started on the Web. We hope that they’ll see the value (of advertising), which is what we’re excited about.

IFB: So the recent simplification push, is that for businesses that have a page on Facebook, but haven’t advertised? Is this a way to introduce Facebook advertising to a new group of businesses?

Levy: Here’s a great way to think about it: one of the common things that small business owners do is publishing on their page. They would take a picture, they would write an update, they would post a video, and it would reach their fans. They’d get good dialogue and good interaction. In a lot of cases, we would see, “Hey, this post seems to be doing really well; how do I get more people to see it?”

Even though we think the create flow and some of the other tools are really powerful for reaching exactly the people you want to see it, in many cases, a business owner is like, “I actually like what I’m doing, I just want more people to see it.” A promoted post is about taking something they were doing already and just letting them amplify it. Just adding a budget to reach more people. Take away the distraction of all the other choices and just let them achieve their real objective, which is to get their message in front of people who care.

In part two of the interview, which will run Tuesday, Levy will discuss how small businesses have driven in-store conversions through Facebook, as well as how Facebook’s mobile efforts are helping local business owners get more foot traffic into the store.

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