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Facebook Publishes New Report on the Impact of COVID-19 on Small Businesses



Of all the sectors impacted by the COVID-19 pandemic, SMBs look set to be among the hardest hit. 

Small to medium businesses generally operate at very tight margins as it is, and they don’t have the same safety nets that larger corporations are able to fall back on. As a result, predictions suggest that up to 7.5 million small businesses in America are at risk of shuttering permanently in the coming months unless they’re able to find a way to recoup costs, and get back to some level of regular operation.

The expanded impacts of this – on employment, opportunity, local economies, etc. – are difficult to fully comprehend. But while the forecasts are dire, it’s likely of more value to get some sense of what’s actually happening on the ground. What are SMBs seeing at the moment, how are they dealing with the impacts of the pandemic, and how do they feel about their situations moving forward?

This week, Facebook has published a new report to shed some more light on this, incorporating responses from over 86,000 people who own, manage or work for a small to medium-sized business. The data also includes 9,000 operators of “personal” businesses (i.e. people who reported that they were “self-employed providing goods or services”).

The report provides a range of insights into SMB sentiment, and may also highlight rising areas of opportunity moving forward. You can read Facebook’s full report here, but below are some of the key points of note.

First off, Facebook’s report provides some scale as to how many businesses have actually been significantly impacted by the COVID-19 lockdowns, with a look at the percentage of SMBs in each sector that are currently unable to operate.

Facebook COVID-19 SMB research

Many businesses, of course, have been able to shift to alternate operational models, like working from home or putting more focus on delivery. That makes it difficult to get a true sense of the full impacts of the current lockdowns – but this chart gets a little deeper into the actual reality of the situation. 

As per Facebook:

“According to the survey, 31% of small and medium-sized businesses have shut down [entirely] in the last three months. The situation is worse for personal business (52% of which report shutting down), hotels, cafes and restaurants (43%) and services like wellness, grooming, fitness or other professional services (41%).”


Most of these trends are as you would expect, with high exposure businesses going into forced hibernation. But it is interesting to note the scope of the impacts, with all sectors seeing at least some closures. The numbers also wrap some further context around the 36 million unemployment claims in the US over the past six weeks.

The question, then, is how many of these businesses expect to recover, and rebound once the lockdowns are lifted?

That’s obviously difficult to answer, as we don’t know how long it’s going to take to ‘snap back’ to our normal way of life, and the longer the forced closures remain in place, the worse the economic situation gets.

In general, however, the majority of SMBs remain cautiously optimistic. 

Facebook SMB report

There are a lot of ‘maybe’s here, but most notably, there are very few ‘No’s. That reflects the pervading uncertainty, but also provides some hope of getting most people back into employment, and the economy back on track, at some stage.

In the report’s further notes, Facebook also provides some context as to current impacts on revenue, even for those businesses that have remained in operation.

Facebook COVID-19 SMB report

Unfortunately, for almost everybody, 2020 is essentially a write-off for growth plans.

But as noted, there are some indicators of future potential, in addition to enduring owner optimism/hope.

Facebook COVID-19 SMB report

More businesses are exploring online connection opportunities and digital payments, which are both progressive steps towards the next generation of consumption.

That may actually end up being the biggest long-term shift we see stemming from the COVID-19 shutdowns. With consumers forced to shop online, many will become more accustomed to the convenience of such, aided by the simplicity of digital payments. For those already working in the digital sector, that could lead to ongoing opportunities to help usher more businesses along this shift, with many, potentially, putting increased reliance on digital connection, and shifting their business models in line with what the next generation of consumers are growing to expect.

Indeed, while eCommerce accounted for only around 16% of total US retail sales in 2019, that figure is steadily inching upwards year after year, a trend that’s expected to continue.

Statista eCommerce shift

COVID-19 may exacerbate this shift – and while retail is only one of the sectors highlighted here, the trend may well be indicative, which could prompt more businesses to consider their options for digital operations, meeting consumers where they’re spending more and more of their time.

Essentially, the lockdowns have forced many businesses to look at their online opportunities, which could have benefits going forward, and could even help SMBs expand their reach into new markets in future. But the immediate path ahead remains tough and uncertain, at least until some sort of breakthrough is reached.

Hopefully, there are enough alternative revenue paths to keep most SMBs running as we navigate through the pandemic – but it may well be worth exploring digital options, where possible, to align with broader consumption shifts.

You can read Facebook’s full, 36-page “State of Small Business Report”, which includes a heap of more specific insights and data, here.



Meta Announces New Ad Options for Facebook Reels Which Could Facilitate Creator Revenue Share



Meta Announces New Ad Options for Facebook Reels Which Could Facilitate Creator Revenue Share

Meta sees Reels as ‘the future of video’ on its platforms, with engagement with short-form content being one of the only positive growth trends across its apps at present.

Whether that’s due to more people looking to watch Reels, or Meta pumping more of them into feeds, is another question – but clearly, Meta’s keen to double-down on Reels content, which also means that it needs to offer Reels creators greater revenue share, in order to keep them posting.

On this, Meta has today outlined some new Reels ad options, which will provide more capacity for brands to tap into the format, while also, ideally, providing a pathway to revenue share for top creators.

The first new option in testing is ‘post-loop ads’ which are 4-10- second, skippable video ads that will play after a Reel has ended.

As you can see in this example, some Facebook Reels will now show an ‘Ad starting soon’ indicator as you reach the end of a Reel, which will then move into a post-loop ad. When the ad finishes playing, the original Reel will resume and loop again.

As noted, it could be a way to more directly monetize Reels content, though the interruption likely won’t be welcome for viewers, and it’ll be interesting to see what the actual view rates are on such ads. It’ll also be interesting to see if Meta looks to attribute those ad views to the original Reel, and how that could relate to revenue share for Reels creators.

The option is only in early testing, so there’s not a lot to go on at this stage.


Meta’s also testing new image carousel ads in Facebook Reels – horizontally-scrollable ads which can include up to 10 images that are displayed at the bottom of Facebook Reels content.

Meta ads update

These promotions will be directly linked back to individual Reel performance, and could provide another monetization option for creators, while also enabling brands to tap into popular clips. TikTok offers a similar ad option in its tools.

On another front, Meta’s also giving brands access to more music options for their Reels, with new, ‘high-quality’ songs added to its Sound Collection that can be added to Carousel Ads on Reels.

Meta ads update

Note that these aren’t commercial tracks – you won’t be able to add the latest Lady Gaga song to your ad. But there are some good instrumental tracks to add atmosphere and presence to your promotions.

“Businesses can select a song from our library or allow the app to automatically choose the best music for an ad based on its content.”

I’d probably advise against letting the app automatically choose the best music, but maybe, based on its suggestions, you might be able to find the right soundtrack for your promotions.

Short-form video monetization is the next big battleground, with YouTube recently outlining its new Shorts monetization process, and TikTok still developing its live-stream commerce tools, as a means to facilitate better revenue share. Inserting ads into such brief clips is challenging, especially in a user-friendly way. But the platform that can get it right stands to win out, by providing direct creator monetization, based on content performance, which will likely, eventually see the top creators gravitate towards those platforms as they seek to maximize their opportunities.

Meta’s new options don’t seem to be a match for YouTube’s new Shorts program, which will allocate a share of total ad revenue to Shorts creators based on relative view counts. But it’s still early days, and no one has the answers yet.

As such, you can expect each platform to keep trying new things, as they work to beat out the competition.  

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