How Facebook makes money from pages and why you should care

Facebook. Nearly everyone uses it, now with over 1.2 billion active users, the world’s most popular search engine is a great place to market your business right? I mean, what an audience to access and it’s free! What’s not to love about it?

But, do you know exactly how the Facebook revenue model works for business pages?

BF (before Facebook)

So you’d have a website and you might even have a mailing list. You’d send an email to your customers and they’d all see it. A bunch of them would probably delete it, but they’d all get it.

If you wanted a list of your subscribers, you’d export them out to an Excel file. You could even select the specific ones you wanted to contact.

It’s hard to build up your subscriber list, but once your users are in there, it’s a solid marketing tool that you can re-use inexpensively.

AF (after Facebook)

So now you have a totally awesome Facebook page. You’ve updated your status, you’ve put some photos up. Great. But now you want likes.

You invite all your friends. Most of them like your page, but unless you’re quite fortunate, or your business is a community interest project or event, your likes look quite unimpressive.

So how do you get more likes? Facebook has the answer: Why not promote your page?

So you sign up, hand over your credit card, and instantly, almost like magic, your Facebook “likes” start going up. “Wow! Where did these people come from? I don’t know any of them, many of them seem to have come from far away places, but who cares, they’re “likes” right?”

Now look at all your new “likes”! You can post stuff and broadcast to all your new fans. How exciting…

So you start posting with enthusiasm, a few of your friends like your posts, but what about all the other guys, all your new fans who liked your page? Why aren’t they ‘liking’ anything? Also, hang on, what’s this “reach” thing all about?

Hmm, this is where the cracks start to emerge and Facebook’s real personality comes out.

When you post on Facebook, you may notice only a small (and ever decreasing) number of your Page’s fans actually see your posts. This is because Facebook wants you to “Boost” posts; paying for your “reach” to be increased… Each time you post. Also, even though you “paid” for your new likes, these people are often from other countries or have interests that are totally irrelevant to your page. Furthermore, there are suspicions that many of these are fake, or are being paid to like pages when they are promoted.

You think “That’s ok, I’ll export them out and pop them into my mailing list, or email them myself.” Nup! You can’t get any of their contact details. You can only communicate with them through Facebook, by boosting each post.

Basically, the Facebook revenue model is advertising, selling aggregated statistics about you, and the services mentioned above, related to Pages “page promotion” and “post boosting”.

Summary

Facebook is a great tool to direct people to your website, but be aware that this is not their intention and is certainly not cohesive to their business plan.

So, if you intend to communicate with all your customers without that becoming an ongoing and increasing expense to you, then you need to direct the flow of users from Facebook to your existing website and mailing list; not plaster Facebook all over your website and business cards, sending traffic away from your site.

Facebook seems to be making this harder by hiding your website link further down the page and doing other things to keep users on their site. However, eventually many business users will stop using the system altogether, so it will be interesting to see how far they push their agenda.

The Facebook business model is to ask you to pay for something that previously you could get for free, and not just to pay once, but each and every time you want to communicate with your subscribers.

If you compare the Facebook communication price model with that of a conventional mailing list, you’ll find that mailing list software is much more cost effective. Furthermore, you’ll find you can export your users and use them in other systems, or for other marketing campaigns.

Next month, we’ll look at strategies to re-direct your Facebook traffic to your website.