- Gary Vaynerchuk says Facebook is the best way to reach new customers, and the ad boycott has brought down prices, but it's still difficult for small businesses to win without a significant advertising spend.
- TikTok offer entrepreneurs the chance for organic growth through personal content, though that opportunity won't last forever.
- LinkedIn has a similar edge, so if Microsoft were to acquire TikTok, it would have the two social media apps with the best organic growth potential.
As the U.S. and Chinese governments battle over the fate of TikTok, with tech giants including Microsoft vying to acquire the popular social media app, advertising guru Gary Vaynerchuk says small business owners also have a big TikTok opportunity to exploit.
"It's really hard to go on Twitter, Instagram, YouTube, or Facebook right now and have organic business growth, just set up an account and put stuff out," Vaynerchuk said at the CNBC Small Business Playbook: The Path Forward virtual event on Wednesday. "You have to be exceptionally talented in your creative or your personality to break through and you'll probably need six months to a year for it to happen," the CEO of VaynerMedia told CNBC's Julia Boorstin.
TikTok and LinkedIn — which already is owned by Microsoft — have the most organic reach, he said. "Those are two places you can post and not spend ad money and get customers. The other platforms become a question of, whom do I want to reach?"
Vaynerchuk said while the hyper-growth of TikTok has attracted the most attention, it is both LinkedIn and TikTok where "you can literally go on and be stunned by how many people see your stuff randomly. ... There's a lot of attention, and not as many ads or content creators on there right now."
But, the current opportunity to grow organically without a glut of content competitors won't last long.
"Quickly, that's changing on both platforms, especially TikTok," Vaynerchuk said.
As the platform gets more crowded, advertising on TikTok does make sense. "I'm a huge proponent of running ads on these platforms, because in comparison to direct mail, TV commercials, print ads, banners, you know, flying over a beach or outdoor media, or anything else one can do with money, I find them to be more efficient for their dollar, more localized, which matters to most of the small businesses right now," Vaynerchuk said.
The decision on where to advertise for a small business has to come back to knowing your customer, Vaynerchuk said. Every business needs to start by "reverse-engineering your customer, or the customer you're trying to get."
If you're selling to 55-year-old B2B decision makers, LinkedIn becomes the No. 1 social media platform for which a business needs to know how to create content and media. If you're trying to acquire 15 -to 25-year-olds, TikTok and Instagram matter a lot more.
"Step one is figure out who you're trying to target. And if it's stay-at-home moms, all of a sudden, Pinterest, all of a sudden Instagram ads, not just posting," he said.
Vaynerchuk said that his belief in the value offered by TikTok and LinkedIn does not imply Facebook's importance has diminished. In fact, he said Facebook and Instagram are offering advertisers rare value right now because of the boycott by large brands.
"Their media product or ad product is incredible and has the broadest collective reach. So if you're a big company within the small business space, that's always going to be a place you're going to want to be," he said. "The biggest opportunity for everybody right now, and it's kind of going to go away here pretty quickly, because Facebook is too important to the big businesses, but some of the prices went down ... because a lot of brands pulled out dollars and so I see hyper-under-priced opportunity on Facebook and Instagram."
Vaynerchuk described Roku and Hulu as also having "somewhat under-priced products."
The advertising that continues to be overpriced is in traditional markets.
"I spoke to my outdoor guy, who I know really well, and he's like, 'the prices are like discount by 10%,' and I'm like, 'there's nobody on the road.' Newspapers, I was curious, I reached out just to be educated in case a question like this was asked. No heavy discount. It fascinates me how the traditional landscape doesn't adjust to the reality of the marketplace. This is why digital continues to eat up market share," Vaynerchuk said.
The social media expert said making content work on Facebook requires a lot more work than just paying for ads. He said too many small business owners say Facebook doesn't work after running a few ads.
"Facebook ads work. The question is: Are you good at it? And I think that people blame platforms for their inability to be good at targeting ads or doing good creative. The No. 1 mistake I see is people giving up on a platform because they did not have a successful campaign and that was their fault. It was not the opportunity," Vaynerchuk said. "You have to practice. I am blown away by how many people refuse to put in the 10 hours of learning to save their business. ... You know it. It's your business, you're trying to save it."
He explained that Facebook is about zip codes and targeting: "If you're a pizza shop owner, and you want to rev up your deliveries, or if you have a dog grooming business, or if you cut hair and you're willing to go to people's homes or want them to come in, you basically target the one-, five-, 10 mile-radius of your location."
Vaynerchuk said it's always a good time to spend more wisely, and that of course includes during an economic crisis that is forcing business owners to rethink their existing approach to the market. Business owners should not overspend on a single video, but they also should not give up too soon if they don't see immediate results from the investment.
"Spend only $25 ins ad, $100 in ads, against a single video, and if you don't like what you are seeing, then you go and make some more. Sometimes people give up too early. Change up the copy that supports the video, or picture. Its test and learn, test and learn, test and learn, test and learn. You have to get good at it," Vaynerchuk said.
He added that self-awareness — knowing if you are the one who should be on camera, if you are comfortable with it — is key to creating content that will resonate, and while video will perform better than pictures, video won't perform well if the personality is not comfortable in the format.
Vaynerchuk said one of the advantages of online advertising is the ability to test multiple concepts and learn which work.
"Everybody here right now probably thinks there's eight reasons people should do business with their business. Well, make eight different ads ... and then see which one gets the best comments. And see which one gets the most phone calls. You can literally run an ad on Facebook that has a phone number and people press the number and call you and you're like, 'Oh, I'm getting the most calls from this one.' You can run an ad focused on better prices one week and better service the next. It's truly revolutionary. You're not wasting money if you're good at what you do, and if you really learn this craft," he said.
He said small businesses should not overthink their ads, either. Ads should be compassionate at a moment in time when the U.S. is dealing with Covid-19 and the Black Lives Matter movement. Ads should never be planned too far in advance because news events could quickly make the ads insensitive without any intention. And ads should never try to trick people. What's appropriate is to explain to customers what your business does: "'We cut hair, we sell pizza, we can take care of your dog, we can distract your child for four hours with our live sessions or consulting,' whatever it may be."
If you're good at your business, you've probably heard what people want. You know the truth about your business, your strengths, or your category like pizza shops. See what people are talking about, making it contextual and relevant. You know, make it about them, not you. Too many people are selling, selling, selling, and it's an infomercial, not a piece of content that inspires somebody to consider you. ... The question is, do you know how to make a good piece of video or picture to get somebody to be compelled to do business with you?"