SA small businesses flock to Facebook

2015-02-26 07:25 - Duncan Alfreds, Fin24
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A legal expert advises that you weigh your comments carefully on Facebook. (Duncan Alfreds, Fin24)


Cape Town - Facebook is making its presence felt in marketing circles as millions of small businesses sign up to advertise on the giant social network.

Based in California, Facebook announced that two million small to medium enterprises (SMEs) had signed up to advertise to the social network's estimated 1.3 billion subscribers.

"These numbers include healthy growth across South Africa and the rest of Sub-Saharan Africa," said Aidan Baigrie, Sub-Saharan Africa lead for Facebook.

The company says that there are 50 million active Facebook users in Sub-Saharan Africa and many businesses are converting to Facebook marketing because of the promise of sales.

"We are seeing more and more African SMEs embrace advertising on Facebook because it drives sales. At Facebook, we are delighted to play a role in small businesses' growth stories," said Baigrie.

Tax dodging

But the role of online giants playing in the local ad space has critics.

In 2014, CEO Geoff Cohen lashed out at Google and Facebook over the payment of local tax.

"In the digital age, we accept that we compete with businesses from all over the world. However, it is clearly wrong that, as we invest in building a tax-paying business employing hundreds of South Africans, we are competitively disadvantaged through aggressive tax planning strategies of global businesses," said Cohen.

He was quick to add though, that what Google and Facebook do is completely legal though many have criticised global firm for using legal means to avoid paying their full share of tax.

Facebook is working to reduce spam on the social network. (Duncan Alfreds, Fin24)

In the wake of the HSBC Suisse tax avoidance scandal, UK policymakers plan to propose a range of measures that would punish bankers and accountants who facilitate the process.

For its own part, Facebook has been forcing unscrupulous markers off the site by making it harder for spam to proliferate on the social network.

The company has also been actively driving mobile engagement and recently posted a healthy fourth quarter profit of $3.85bn, with two thirds of that coming from mobile ad spend.

Business opportunity

The company is also driving internet connectivity with its programme which seeks to zero rate access for Facebook for subscribers in developing countries.

As more people get hooked on to social networking, it presents an opportunity for businesses to reach their key audience and Facebook wants to position itself as the primary go to destination for advertising dollars.

"This year, we are scaling our SME-dedicated support to include more in-person educational events around the world as well as access to more online support for any business who wants to grow with Facebook," said Baigrie.

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