September 26, 2011, 4:39 PM

Facebook looks to lure small business advertisers

As an enticement the social network is giving away free ads.

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Facebook Inc. is giving away free advertising to small businesses, aiming to demonstrate the benefits of marketing to the social network’s more than 800 million active users.

Facebook today joined with the National Federation of Independent Business and the U.S. Chamber of Commerce to launch a program that, beginning in January, will award up to $10 million worth of free Facebook ads to up to 200,000 small businesses. That works out to at least $50 worth of advertising credits per merchant.

The program will also focus on educating businesses on ways to promote themselves on the social network, such as teaching them how to build a Facebook page, as well as how to develop paid ad campaigns to target consumers with Sponsored Stories and display ads. Sponsored Stories are an ad format on the social network that enables companies to pay to highlight posts or actions that a consumer’s Facebook friend has made that relate to the advertiser.

“Small businesses are the backbone of the American economy and we believe that Facebook can be a tremendous tool to fuel their growth and success,” says Sheryl Sandberg, Facebook’s chief operating officer. “Our goal is to give small businesses a boost by helping them find customers the best way possible—through recommendations from friends.”

The social network highlights one such small business, wedding photographer CM Photographics, which generated nearly $40,000 in revenue from a $600 investment in Facebook ads.

Merchants will be able to gather information about how to leverage Facebook via webinars, as well as at stops on a cross-country road show that Facebook is organizing in coordination with local and state chambers of commerce and regional National Federation of Independent Business offices. Facebook says more details on the program, as well as the dates of the road show, are forthcoming.  

If successful, the campaign could boost the number of small business advertisers on Facebook. The social network’s U.S. ad revenues for Facebook will reach $2.01 billion this year, a 66.1% jump from $1.21 billion a year ago, according to market research firm eMarketer.

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