Facebook Starts 2017 With 65 Million Local Business Pages

Most of those Facebook Pages are free, as only 4 million of those businesses are actively advertising on the social network.

Facebook’s Q4 2016 was even more successful than analysts’ consensus, as mobile advertising propelled revenue rose 53 percent during the last three months of the year to $8.6 billion.

Meanwhile, mobile ad revenue reached $7.2 billion, up 61 percent year-over-year, representing 84 percent of total ad revenue. (Read more in the earnings release and the analyst call transcript.)

Facebook’s Q4 story highlights a number of opportunities and challenges for local businesses. While Facebook has been carefully cultivating local businesses for the last three years, SMBs still feel uncertain about making the move from earned media to paid media across the social network.

Facebook told investors that there are now 65 million local businesses using its free Pages product to connect with customers — but a mere 4 million are actively paying advertisers on Facebook and its messaging products. Roughly 5 million are using its free Instagram Business profiles, with approximately 500,000 regularly using the image sharing app’s ad offerings.

To COO Sheryl Sandberg, those numbers suggest potential.

“Our revenue base is becoming more diverse. In Q4, our top 100 advertisers represented less than a quarter of our ad revenue, which is a decline from Q4 last year,” Sandberg said.  “We continue to focus on our three priorities: capitalizing on the shift to mobile, growing the number of marketers using our ad products, and making our ads more relevant and effective.

“Our goal is to drive value for our clients,” Sandberg continued. “As we grow the diversity of businesses on our platform, we’ve invested in building ad products that meet a broad set of objectives, from building brands to moving products off shelves online and in-stores.”

Facebook’s Game Plan

Despite Facebook’s considerable strength in continuing to drive new users — it now has 1.32 billion daily active users — and higher engagement, this year contains several problems the company has begun to take more seriously. Aside from being embroiled in polarized battles over “fake news” and the unease advertisers tend to have about being in the middle bitter partisan battles (as opposed to selfies and cute animal photos).

To ensure its value to advertisers and users, Sandberg and CEO Mark Zuckerberg spoke about Facebook’s continued emphasis on video and on building out services on its Messenger and WhatsApp platforms. As Zuckerberg noted, WhatsApp reached 1.2 billion monthly actives and more than 50 billion messages are sent through WhatsApp on a daily basis.

In addition, the expanded rollout of Dynamic Ads across Facebook, Instagram, and the Audience Network, are being tailored for verticals like travel and retail is also designed to add to the “diversity” of its advertisers.

Secondly, attribution is an area Facebook is also been building on for the past year. Sandberg promised to expand those efforts throughout 2017 as well.

“We know that measurement is important to building advertiser trust,” Sandberg said. “Last year, we discovered several metrics issues. And while no billable metrics were affected, we took action to fix the errors and reviewed all of our metrics. We also expanded our partnerships with third parties, given the important role they play in verification. We’re going to continue to invest in measurement, including third-party partnerships, in the upcoming year.”

Dynamic Ads for travel enable businesses to show ads based on dates and destinations people are interested in, while Dynamic Ads for retail show people the products available at nearby locations in real-time.

Last month, Facebook introduced Dynamic Ads for “broad audiences” to help businesses reach new customers based on their interests on Facebook and online/offline behavior.

Zuckerberg also took time to discuss how Facebook can parlay the growing interest in artificial intelligence, augmented reality, and virtual reality.

“On artificial intelligence, we developed a new technique called style transfer that uses AI to study a painting and then can take your photos and videos and draw them in that style in real time on your phone,” Zuckerberg said at the start of the analyst call. “And if you post on Facebook looking for a place to eat or suggestions for where to go, we can now use AI to understand the text of your post and understand what you’re asking and surface recommendations from the comments.”

These are still the “early days” in Facebook’s 10-year plan for virtual reality, Zuckerberg hastened to add.

But he did hope to point to signs of progress there.

In December, Facebook began shipping its VR Touch controllers. Samsung announced that it’s now shipped more than 5 million Gear VRs.

“We’re bringing more social experiences to VR with apps like Oculus Rooms for Gear VR,” Zuckerberg said. “We’re going to keep making big investments in VR content, and I’m excited about what’s coming in 2017, from new games to more immersive educational experiences.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.