Visa, Facebook Partner For Small Biz Ad Program
The credit and debit card processing giant is awarding $100 ad credits to each of the first 20,000 businesses that join its Visa Business Network, an application aimed at connecting small businesses via Facebook. About 80,000 small businesses have created pages on the site since last November.
The Visa network will offer a set of tools and advisory services to help them add new customers, operate more efficiently and boost sales. Companies can also use the platform to share ideas and even strike deals.
Google is supplying many of the new features including its maps, word processing, calendaring and site-building applications. Through The Wall Street Journal and Entrepreneur magazine, small business owners will be able to pose questions to business experts via Visa's Facebook network.
Other partners including AllBusiness.com, Forbes.com and Microsoft will also provide news feeds, videos, blogs and articles on nuts-and-bolts topics such as cash flow management, attracting new customers and holding down costs.
"We started thinking it was the right time for us to step in, help small businesses get more benefit from networking," said Alex Craddock, who heads small business marketing for Visa. The company partnered with Facebook because it already had a large population of businesses it could cater to rather than trying to build an online community from scratch.
Michael Diegel, a spokesman for the National Federation of Independent Businesses, said the Visa program on Facebook could help small companies.
"One of the things we hear from our members most often is their desire to build their businesses through networking," he said. "To the extent that this initiative can help them to do that, it will be a valuable tool for entrepreneurs."
For its part, Facebook will certainly welcome the $2 million in advertising that Visa is paying for as part of the program. Despite its popularity, the social network has struggled to monetize traffic from its large but fragmented base of 80 million users.
Market researcher eMarketer last month reduced its 2008 revenue estimate for Facebook to $265 million from $305 million because of a faltering economy and the inherent challenges in advertising on social networks.
Meanwhile, the 24,000 applications built on Facebook over the last year typically generate ad revenue for developers rather than the company. Like other developers, Visa wants its new business-to-business app to go viral.
Visa is hoping to drive people to the Visa Business Network via word-of-mouth, referrals from business to business as well as blogs about small business tools, Craddock said. The company will support the service with a multimedia marketing campaign beginning in July.
So what will $100 buy in advertising on the social network? The credits are for Facebook Ads, the company's self-serve ad platform designed for smaller marketers. It allows users to select their target audience based on factors such as age, gender, interests and location and launch campaigns for as little as $5. How much a given amount buys depends on how much someone bids for an ad via Facebook's interface.
Facebook is hoping that if small businesses like the results they get from using the ad credits, they will be willing to spend more on their own.
"The Visa Business Network greatly enhances what small business owners can do on Facebook," said a company spokesman. "With the ad credit, the small business owners have an opportunity to go a step further and promote their businesses to a targeted audience on Facebook."