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Facebook Focuses on Small Businesses, Ignores Celebrity Pause

  • Sandberg says company relies on mom-and-pop shops for ads
  • A new management tool for boutique businesses aims to help
Photographer: Andrew Harrer/Bloomberg

Civil rights groups escalated their campaign to encourage boycotts of Facebook Inc. this week. Their #StopHateForProfit initiative, which already convinced scores of top-tier companies to pull advertising in July, rallied celebrities to stop posting on Facebook-owned Instagram on Wednesday.

But Sheryl Sandberg, Facebook’s chief operating officer, appears unfazed. She’s been spending the last few months worrying about a bigger advertising problem: the Covid-19 crisis, and how it threatens to shutter small businesses.

The majority of Facebook’s advertising revenue doesn’t come from the major brands, like Verizon Communications Inc. and Unilever NV that joined the summer boycott and grabbed headlines. Instead, it’s driven by smaller companies -- the hair salons, bakeries and gyms most severely affected by public health restrictions around the world.

Facebook didn’t make any major changes to satisfy the #StopHateForProfit brands. “We agreed with their premise,” Sandberg said. “We don’t want hate on our platform.” Meanwhile, the company was scrambling to come up with solutions for more vulnerable companies. Facebook, with more than 3 billion users on its properties around the world, isn’t immune to global economic swings.

In the early days of the pandemic, Facebook quickly built ways for small businesses to solicit donations to continue paying their employees, to distribute gift cards and to build online storefronts with e-commerce tools. On Thursday, the company announced Facebook Business Suite, which makes it possible to post, see notifications and receive messages from Facebook and Instagram accounts at the same time. The tool will be available only to small businesses first, before expanding to larger companies next year.

“The more businesses or small businesses thrive online, the more small businesses become advertisers,” Sandberg said.

The choice to focus on small businesses, instead of appeasing the big guys, is working out for Facebook so far. The #StopHateForProfit campaign continued, with celebrities Kim Kardashian, Katy Perry, Naomi Campbell and others pausing their Instagram posts for a day. But among major brands, “most of our advertisers are back,” Sandberg said. “Most of them who had paused have unpaused.”