Facebook Ads Help Some (But Not All) Small Businesses: Survey Says

Facebook's Catch-22

It's no secret that businesses increasingly use Facebook to reach customers, but how many are really willing to pay for it?

Business owners say they like Facebook as a marketing venue, but less so as an advertising outlet, according to a new survey from MerchantCircle. The study found that while 70 percent of business owners used Facebook for marketing, just 23 percent had actually shelled out money for Facebook ads. That was up 5 percent from the prior survey six months earlier. However, among those who had used Facebook ads, response was largely favorable, with 62 percent saying they would do so again -- representing opportunity not only for those small businesses, but for Facebook itself.

However, of the 28 percent of small-business owners who wouldn't use Facebook ads again, most (66 percent) said they didn't attract new customers. However, a growing number of business owners (41 percent) said the ads cost too much (41 percent) and didn't get clicks (37 percent).

Why it matters to your business: Facebook has proven to be a great marketing tool for small-business owners, but I'm wondering if entrepreneurs are somewhat spoiled by the fact that it's free. Perhaps that's making them reluctant to shell out for ads on the social network. If your business is getting a lot of response from Facebook in general, it's likely it's worth your while to at least experiment with Facebook ads.

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