How This Week’s Facebook Outage Impacted Local Businesses

Earlier this week Facebook was offline for six hours. We found an interesting article detailing the challenges two small business owners faced during the outage.

The first business owner is J.D. Holland. He runs a farm store and nutrition club in a rural community called Burnsville, Mississippi. 

When Facebook went offline he printed (yes printed) 250 flyers to post around the area. He also thought about buying some space in the town’s two-page newspaper. It is ironic that when the Internet goes down, business owners like J.D. think back to some of the old tried and true methods for drumming up business.

He is hooked on the Internet. Facebook in particular. He depends on Facebook Live videos and social posts on his business page to drive business during the pandemic. As J.D. put it, “they have my life.” That’s an ominous statement. And it’s one that comes at a time when Facebook is facing considerable public scrutiny.

Facebook Opens the Floodgates for Conversational Commerce

J.D. says he lost $300 to $400 dollars in Facebook-driven sales. This may not sound like a lot of money to those of us in San Francisco or Chicago. But it goes a long way in Burnsville, Mississippi. 

Another local business owner, Zahid Buttar, runs an online vitamin store out of Mooresville, North Carolina. He says he spends $1,000 a month on Facebook ads. He said he lost $5,000 to $6,000 during Monday’s Facebook outage.

The outage has him considering pulling his ads from Facebook and shifting his budget to email and text messaging. As Buttar put it, “What do we do? It’s like a bait and switch. It’s like you set the hook in our cheek and we have some semblance of a business. And then, boom, it went down.” 

Buttar and Holland are just two of some 3 million local and small merchants that rely on Facebook advertising to drive their businesses. Facebook reported a second-quarter increase in ad sales of 56% as compared to a year before. That increase netted the company a handsome $10 billion in quarterly profit. 

The fact that so many local businesses rely on Facebook to sell their wares puts the notion of government intervention in an odd spot.

On the one hand, there are plenty of compelling arguments that the negative social impact of Facebook and Instagram makes this the right time to reign in the second-largest advertising platform in the world — second only to Google. On the other hand, with millions of small businesses turning to the platform to drive their business, any regulation must take into account possible unanticipated consequences and the impact such regulation may have on the likes of Buttar and Holland. 

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