Businesses turn to Facebook for word-of-mouth advertising
HERMOSA BEACH, Calif. -- Bartender Beau Dieda does more than mix and serve drinks every night at popular nightspot Baja Sharkeez: He is also instructed to sign up friends and fans for his company's Facebook page, as well as his own. Before he leaves the restaurant, he sends bulletins to his collective fan base inviting them back in for specials, discounts or events.
"It's one of the best ways we can reach a vast audience," he says. "After my shift, I can blast it to 650 friends in 30 seconds. I don't have to go around to each person, or call them up."
Facebook, with 250 million members, has gone beyond being just a place where you can alert friends about the music you're listening to, who you're dating or what movies you like. The social network's expanded Pages feature lets businesses, organizations and public figures in on the action. They can create profiles that let them sign up fans, issue status updates and send messages. Businesses like Baja Sharkeez that cater to young people and big companies like Pizza Hut and Coca-Cola are finding it's profitable to be your Facebook friend.
What also is enticing marketers: 120 million Facebook users log on at least once a day, and 30 million of them access Facebook on mobile devices. And those with major purchasing power — ages 35 and up — represent the fastest-growing demographic.
There are more than 100,000 small-business pages — 300,000 total business pages — on Facebook, says Tim Kendall, the company's director of monetization.
Some large companies have attracted huge followings. Coca-Cola and Starbucks have over 3 million fans; Adidas shoes has 1.9 million. Pizza Hut is closing in on 1 million fans, whom it regularly updates about specials and new menu items.
"It makes us very relevant to the audience, and lets us communicate with them where they are, in a way that our website can't do," says Bernard Acoca, Pizza Hut's senior director of digital marketing.
Sprinkles, a small chain of cupcake bakeries, is itching to get to 100,000 Facebook fans. Co-owner Charles Nelson started in April sending quizzes, free cupcake offers, contests and other enticements on Facebook to bring people in.
Back then he had 8,000 fans. Now he's at 27,000 and is staging a contest to get to 100,000, offering free cupcakes and a trip to Beverly Hills to the winner.
"A website is you speaking out, but a Facebook page lets our customers come in and give their feedback," he says. "It generates business, and it's also a great community builder."
Targeted advertising
In addition to a free profile page, Chicago-based T-shirt marketer Threadless uses Facebook's advertising program. Advertisers can choose pay-per-click ads similar to Google's auction-based ad program, bidding on words and paying when someone clicks on their ad, or traditional ads based on "impressions," or the number of times an ad is presented.
Cam Balzer, director of marketing at Threadless, bids on words relating to video games, music and zombies. "This works phenomenally well," says Balzer. "You can target your ad better on Facebook than anywhere else. I know my customers' age, where they live, what their interests are, and only the people who fit my target see the ads."
Facebook declined to disclose financial specifics, but Kendall says the local ad program is "ahead of expectations," and the number of advertisers has tripled since 2008.
Marketers increasingly are gravitating to Facebook because they can advertise to a targeted audience, says Emily Riley, an analyst at Forrester Research. She says marketers can pick and choose consumers based on public information they share on their Facebook profiles, such as the city they live in, the college they attended, their group affiliations and their fan pages.
"You can literally find a book lover in New York who is a fan of Stephen King," says Riley. "That is gold for a local book seller."
To sign up (facebook.com/advertising), advertisers commit to spending a minimum of $5 per day. An ad campaign can be turned off and on with no monthly minimum. Kendall says businesses using the ad program successfully are those who depend upon word of mouth, like real estate agents and wedding photographers.
"Brides tell their friends they're engaged, and wedding vendors can run ads specifically targeted to them," he says.
Sharkeez doesn't spend money on Facebook ads for its five Southern California restaurants. Jeffrey Tyler, director of marketing for Sharkeez, says Facebook attracts enough customers for free.
His restaurants — with 50 TV screens playing the latest sports, low-priced drinks and a young singles crowd — are usually busy, but Facebook has helped "tremendously" in the soft economy, he says.
Restaurant patron Amber Mather of Hermosa Beach came into Baja Sharkeez on a Thursday afternoon specifically because Tyler sent her an invitation with a 2-for-1 Happy Hour special. "You let your clientele know every day if something is going on — new deals, new specials. That's how I know what's happening at Baja Sharkeez," she says.
Tyler agrees. "We can drive sales so much more. It's probably the best thing that's happened to us in the past 10 years."
Contributing: Jon Swartz in San Francisco