Is Facebook Putting the Squeeze on Local Businesses? « The Blog of Matthew Loop

Is Facebook Putting the Squeeze on Local Businesses?

Since practically everyone is using Facebook these days, their sponsored ad network has become an essential marketing component for many small business owners. Are Facebook Ad costs becoming too expensive and squeezing the average local business out, though?

To answer the question, take a look at this recent screen-shot below.

This was the first screen-shot of many taken in a local market. The demographics included three cities, a specific age range, and were targeted to a specific gender.

The ad had previously been getting clicks regularly. Then, the click-through-rate started to drop after it ran on the network for two weeks. When I checked the ad, the suggested bid had changed to a whopping $4.14 – $6.56!

So, to be able to compete and get clicks, I needed to significantly bump-up the bid on my Facebook Ad. When I finally stopped running this ad I was paying on average of $3.40 per click.

I began to think of how this cost-per-click (CPC) increase would easily squeeze most small businesses out of the picture.

It’s true that Facebook gets almost the same amount of traffic as Google.

However, if I wanted to pay that much per click, I would just go ahead and advertise on the Google search network. At least that’s where people are actually searching for a keyword so your chances of targeting a buyer are greater.

I’ve noticed an influx of more major brands and corporations lately advertising on Facebook. Small businesses can’t compete with their deep pockets and large budgets, though.

Hopefully, Facebook will put measures in place to continue to keep costs affordable for the average mom and pop shop so they can continue to experience a positive ROI. The network has produced thousands of quality leads, floods of new business and online sales regularly for myself and many others.

Paying anything over $1.50 per click in a local market is unreasonable, though.

I’ve tested many different ads and strategies on Facebook over the years and the costs have jumped across the board. Switching to the CPM model hasn’t yielded much better results as far as a lower price is concerned.

Changing your ads up regularly helps the CPC drop for a little bit. Check this out below for some beginner FB ad tips. It’s pretty general but it’s their guideline.

For advanced Facebook Ad marketing strategies, see my consulting services link to hire me by the hour. What do you think? What changes have you noticed in Facebook’s Ad platform lately?

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About the Author

Matthew Loop is an author, speaker, investor, philanthropist, and the highest paid social media revenue strategist in North America. He helps brands, startups, and small business owners multiply their influence, impact, and income by harnessing the power of the Internet. Since 2005 he’s trained over 21,000 clients in 25 countries. Millions have viewed his free business growth tutorials online. Connect with him on FacebookInstagram, and Twitter.


4 Responses to “Is Facebook Putting the Squeeze on Local Businesses?”

  1. Moe says:

    Facebook significantly increased its bid range for all of my ads– some of them by 200%! Is Facebook playing with its bids? This needs to be investigated!

  2. I guess I haven’t run any FB ads for several months. But the last time I did, they were only ~ 60 cents per click.

  3. Highly enlightening bless you, I’m sure your current readers might just want a lot more posts like that keep up the great work.

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