How brands & small businesses can benefit from Facebook's move into e-commerce

Kelsey Formost

30 Jun 2020 · 2 min read


Facebook announced this week that it will be rolling out a host of new features designed to make it easier for businesses to list products and services for sale on their social profiles. The new measures are part of Facebook’s efforts to help small business owners stay afloat during the halt of in-person sales and retail closures.

The most significant update comes in the form of Facebook's new 'Shops' feature

‘Shops’ will allow business profiles to list items for purchase on their Facebook Page, their Instagram profile, in their stories, and within Facebook ads- completely for free. Eventually, users will be able to sell through WhatsApp, Facebook Messenger, and Instagram Direct Messages, and even tag products for sale during live streams. It’s the biggest move into e-commerce that the social media giant has made, to date. But more places to sell isn’t the only change on the horizon.

How the Launch of Facebook Shops Will Impact Small Business

Rather than sharing and linking separate product listings from inside Facebook and Instagram, Shops now allows businesses to create a single catalog of products, then link to those products in any of Facebook’s various apps. “It’s one simple and consistent experience across this family of apps, which means it is easier for people,” Zuckerberg said in his live-streamed announcement of Facebook’s new e-commerce features. “That of course means there’ll be higher conversions and more sales for small businesses.”

Zuckerberg went on to hint that a lot more changes were coming as a result of Facebook’s big move into e-commerce, and that things will move quickly. One prediction of things to come will be the impact of the new e-commerce features on increased ad revenue.

Eventually, Zuckerberg envisions the successful use of the free Shops feature leading to more ad sales. Since most of Facebook’s ad revenue comes from small businesses, it’s a win-win.

“Our business model here is ads, so rather than charge businesses for Shops, we know that if Shops are valuable for businesses they’re going to in general want to bid more for ads,” Zuckerberg said. “We’ll eventually make money that way.”

The Need for Influencer Marketing

All these updates point towards an eventual increase in CPC for Facebook Ads, which in turn will lead to marketers re-thinking where they should allocate advertising dollars in order to get the most value. Since influencer marketing already has an 11x higher ROI than traditional advertising, we can definitely expect more brands investing in what’s clearly become the most lucrative branch of the marketing industry.

Influencers have made a huge difference in helping small businesses reach their target customers during quarantine. Over the past months, in-person marketing has been non-existent, and many businesses have struggled to keep customers informed and engaged. By partnering with influencers, small businesses have been able to connect with their communities, both in their local communities as well as online, to garner support, expand their reach, and stay in business.

With the added support of these new monetization features and an increase in public attention via influencer marketing, the future is looking brighter for small businesses, even if the cost of ads goes up in the next few months.

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