Facebook Just Gave Small Businesses an Awesome New Video Tool
They may not be as sexy as the celebrities Facebook is reportedly trying to woo, but small and medium businesses are still an important group of customers for the social network.
On Wednesday, the Menlo Park, Calif., company unveiled a new tool that lets businesses make a short introductory video about their company. Dubbed “Your Business Story,” the video tool lets businesses create essentially a photo slide show to which they can add some music from a library and a short text description of “what they are in the business of” doing.
With video’s meteoric rise in importance, it’s not surprising that Facebook is coming up with extra ways to not only get more video uploaded onto its network, but also to get users to watch more of it. As Fortune previously reported, Facebook is on a ferocious quest to become a serious competitor to Google’s video network, YouTube. Not surprisingly, YouTube also lets users create similar videos out of photo slide shows.
So far it’s not doing too shabby. During an earnings call in November, the company revealed its users were now watching 8 billion videos per day, twice the amount they were watching only a few months prior in April. And as Facebook VP of small businesses Dan Levy told Fortune in an interview, more than 1.5 million small businesses upload videos on Facebook every month.
With that said, the 8 billion metric should be taken with a grain of salt, especially if you ask YouTube’s CEO, Susan Wojcicki. At Fortune’s Brainstorm Tech conference in Aspen, Colo., last summer, Wojcicki challenged the validity of the metric because Facebook automatically plays videos in a user’s feed instead of letting them press play if they want to.
But even so, it’s hard not to see why Facebook would invest in its community of small businesses. Today there are more than 50 million small businesses with profiles on Facebook, and 3 million of them have spent money on ads on the network, up by 50 percent over the last year, according to Levy.
But let’s not forget that Facebook is fundamentally a business, and making money is a high priority. Levy declined to share how much small businesses contributed to the company’s $5.6 billion in ad revenue last quarter, but it’s safe to say that it’s not most of it considering what brands like Coco-Cola are likely spending on the network.
So why are small businesses so important to Facebook? The answer is of course, better advertising -- what Facebook does best.
“Ads you see will be more diverse, and more targeted to you,” said Levy when asked why Facebook is investing so much into growing its small-business customer base. Small businesses may not contribute the most revenue, but they do make up the vast majority of Facebook’s advertisers, Levy confirmed.
The more brands that are buying ads on Facebook, the more likely it will be to serve “useful” ads to its users. Or at least that’s what Facebook is banking on.