How Facebook’s Privacy Issues Affect Small Business Advertisers

Last month, Facebook’s f8 conference revealed a lot about their plans for the future. It’s also created backlash from users and critics across the globe about the social networking behemoth's treatment of user privacy.

How does this affect small businesses, most of whom have only recently began using Facebook as an outlet to communicate with customers? What about businesses that purchase advertising through Facebook’s system?

Let’s take a look.

Pre-f8 Outlook

Millions of small businesses took to social media as an accepted communication and marketing tool in 2009. “Friend us on Facebook” and “Follow us on Twitter” seem to go hand-in-hand with every website, advertisement, and storefront from Atlanta to Seattle.

It was a little cutting-edge, but it did feel safe. 400 million and counting accounts are on Facebook, and the fastest-growing segment of users remains women aged 45-55 and above.

Businesses could setup “fan pages” and communicate in real-time with both existing and potential customers. They could publish specials, coupons, and news about events (of course, they can still do these things today).

Take Pi , an increasingly renown pizzeria with a location beneath our offices in St. Louis. Pi recently got a “pizza truck” that travels around town selling pizza to hungry locals. Where will it be today? Well, you have to find out on Facebook.

Facebook’s advertising platform has also evolved to be a useful form of targeting advertising for small businesses. Much like Google’s Adwords, businesses can sign up for an account and immediately begin designing ads that are keyword-focused. Facebook has the added “bonus” of further targeting, where you can buy ads to target people based on age, location, employer, interests, and more.

Simply stated, pre-f8 conference, everything was rolling along well. Businesses were opening up to Facebook and its enormous user base and wealth of personal information.

f8 Fallout

At Facebook’s hyped f8 conference, there were no shortage of interesting announcements. The new “Like” buttons , the “open graph”, the amped-up API, “Credits”. To save me space, it’s best to just mention some great recaps of that show that you can read for yourself .

What’s transpired in the weeks since this event, however, is most intriguing. Everyone from politicians to school officials to parents are crying foul about the privacy implications of where Facebook is heading. There are guides being published on how to lock down your Facebook.

“Lock down” doesn’t seem to go jive well with “open graph."

Suddenly, many people are beginning to distrust Facebook. And while the tween set may never depart from their PetVille’s or their Justin Bieber layouts, it’s the 20 and up crowd that worries.

The crowd that values privacy for their family, from their employer, for their own safety.

Does this change things for businesses?

It may. If Facebook’s slide in trust continues, expect the same groups that were recently the fastest-growing to be the quickest to depart. That means the 35 and up crowd, followed more slowly by the 20-34 group.

These are the people that likely buy your products, or come to your restaurant. If they are no longer going to trust Facebook with their personal information, that makes Facebook’s advertising system less effective or appealing.

Further, if those users are no longer going to be as active on Facebook as they once were, it will be much harder for you to get their attention about goings-on with your business.

The Pi pizza truck? We may never find it again, especially if we can’t trust Facebook.