Ad-free social media poses challenges for small businesses

The new age of social media brings trouble to small businesses

Small businesses rely heavily on targeted ads served to potential customers via social media. Platforms like Facebook, Instagram, and TikTok have been their preferred destinations for finding customers through ads. According to research, 93 percent of advertisers spend money on Instagram ads, while 76 percent of advertisers spend a portion of their marketing budget on TikTok.

With these apps going ad-free, businesses will have fewer people to target through ads. While not everyone will buy subscriptions, small businesses usually target ads in places around them. So their ads will reach fewer people. “Obviously, if you’re not able to have targeted ads, you’re really going to hurt small businesses or local businesses who really count on that ad targeting to raise awareness,” said Jeff MacDonald, social strategy director at Mekanism.

Meanwhile, this shift may see a rise in influencer marketing. Brands are already investing more in influencer marketing than before. Research showed that 62 percent of brands spent a portion of their marketing budget on influencers in Q1 of 2022. That figure reached 73 percent by Q3 of this year. The more social media platforms lean towards an ad-free version, the more influencer marketing will grow.

“Those influencer partnerships are gonna grow in value if we start to see more people start to pay for their social experience, and receive less targeted ads,” added MacDonald. This may help local social media influencers too. However, as Digiday notes, “influencer marketing isn’t expected to become the be-all and end-all.” That’s because these ad campaigns don’t give brands as much detailed insights as direct ads on social media.

Creating online communities may help businesses

There’s another risk associated with influencer marketing. A misstep from influencers could lead to public backlash and affect the business. So while the new age of ad-free social media may bring a rise in influencer marketing, creating online communities might help businesses in the long term.

“Advertisers who don’t build a strong, organic presence already have a hard time with having their ads do more than just reach people,” said Noah Mallin, chief strategy officer at IMGN Media. “This reinforces the value of really being [authentically engaged] on platforms [instead of] just looking at this as another place to stick ads there.”