Why Small Business Means Big Business for Facebook Inc.

By Markets Fool.com

If the expectations of America's small business owners come to fruition, 2015 and beyond could be a boon for Facebook , and even its wannabe social media kin Twitter .

Continue Reading Below

Followers of Facebook may recall last year's "Facebook Fit" nationwide series of boot camps for small business owners. The objective of the Fit seminars was to encourage small business owners to use Facebook as a primary marketing tool, as well as to demonstrate how to best carry out a social media advertising campaign. New data suggest that the timing of Facebook's -- and to a lesser extent, Twitter's -- focus on small business couldn't have been better.

Bring on 2015
The National Small Business Association, or NSBA, recently conducted its annual survey of small business owners around the country. Only 45% of small business owners reported an increase in revenue over the previous 12 months, while 34% reported a decline. Not exactly a banner year.

However, respondents were clearly feeling mighty good about their prospects in 2015. According to the NSBA, in the coming 12 months a whopping 60% of small business owners expect an increase in revenue, and just 15% are bracing for a decline. Should that come to pass -- and who knows a business better than the owner -- that would be a significant about-face.

The news could be even better for Facebook investors. A similar survey of U.S. small business owners conducted by the Alternative Board was even more upbeat, citing a staggering 82% of respondents who anticipate increasing revenue in the coming year.

And what will fuel all that growth? Over half of the country's small business owners intend to utilize ads and marketing as the primary catalyst.

Continue Reading Below

Small, but mighty
Facebook's recent announcement that it now boasts more than 2 million "active" advertisers, up from 1.5 million less than a year ago, might have slipped under some investors' radar, but it's certainly newsworthy. By "active," Facebook means the business had posted an ad within the past 28 days. What's the secret to Facebook's impressive growth in marketing partners, and why should investors care?

First and foremost, Facebook collects, analyzes, and ultimately utilizes data on user behavior as well or better than any digital advertiser on the planet; and it can back it up with data -- something every marketer loves to see. Another reason cited by Facebook for its growing cache of active advertisers are new tools such as its Ads Manager app for monitoring mobile spots, and its emphasis on targeting small business owners.

Sure, the average small business owner isn't going to spend $1 million a day on video spots,the cost Facebook charged during its video "testing" phase before unleashing them across its site this year, but there are still millions of reasons -- literally -- to focus on the little guy.

There are an estimated 23 million small business owners in the U.S. alone, and just shy of $140 billion is spent annually on local ads, so there's plenty of upside in targeting this segment. Facebook Fit, and Twitter's National Small Business Week seminars -- both held last year -- make a lot of sense when you consider what's at stake.

If 2015 proves to be the boon that small business owners expect, Facebook has positioned itself to enjoy the banner year nearly as much. There certainly aren't more than 2 million mega-corporations advertising on Facebook; most of these advertisers are local businesses. CEO Mark Zuckerberg and team certainly know where their advertising bread-and-butter is, and that's why small business will continue to drive Facebook's business for years to come.

The article Why Small Business Means Big Business for Facebook Inc. originally appeared on Fool.com.

Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.