New Facebook Rules Could Hurt Small Business

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Small businesses that use status updates to advertise their products on Facebook will be less visible—featured less and less on their friends’ newsfeed—once new advertising rules take effect in January. The change is an attempt by Facebook to better monetize their site as advertising platform.

When small businesses use social networks to grow their customer base, industry observes call the technique “organic outreach.” But that method of contacting consumers may become increasingly difficult as larger media platforms like Facebook seek new and improved streams of revenue.

“Businesses that post free marketing pitches or reuse content from existing ads will suffer ‘a significant decrease in distribution,’ Facebook warned in a post earlier this month announcing the coming change.”

Currently, Facebook offers to promote businesses’ posts for a cost that ranges from five dollars to several thousand. For many small companies, Facebook represents their most productive advertising outlet. To maintain or increase that level of visibility, companies will now have to invest more of their yearly earnings.

In his Big Think interview, Murray Low, Columbia Business School Director of Entrepreneur Eduction, explains how entrepreneurs and small businesses can take advantage of technology to compete with much larger companies: