Facebook and Instagram crash hurting creators and small businesses

Lakinya Francis creates a LinkedIn account, Haley Sanchez expands her mailing list, and Michael Elefante plans to build his website.

“We’re so obsessed with what works and that’s good, but we have to have a back-up plan, especially when we rely so heavily on technology,” said Francis, who runs a consulting firm that helps people win. money through vending machines.

Influencers who have long relied on Instagram and Facebook to connect with fans, advertise and sell products, rethink where they post their content after suffering losses when the company’s platforms went offline for several hours Monday.

CNBC spoke to 10 online creators and small business owners who use Facebook, its Instagram services, or WhatsApp, or a combination of all three for this story. Each of their estimated losses during the Facebook outage ranged from a few hundred dollars to over $ 5,000. sales, affiliate links, sponsored posts and product launches.

It’s a demonstration of the importance of Facebook’s influence on the online economy. Even a small outage means losses for people who depend on Facebook services to do their jobs or advertise their products. But a record-breaking six-hour outage is even worse.

Zuckerberg’s investment in creators and small businesses

Facebook vice president of infrastructure Santosh Janardhan apologized for the massive outage in a blog post Monday night. Janardhan blamed “configuration changes on backbone routers” for the removal of services, but did not say what changes occurred.

Over 200 million businesses actively use Facebook’s tools, and many content creators rely on Instagram for sponsored posts, affiliate links, and sales revenue. And the blackout came as CEO Mark Zuckerberg and Facebook make aggressive efforts to entice and entice creators like TikTok, Snapchat and other social media platforms.

Last year, Instagram launched a short-lived video feature called Reels to compete with TikTok, and Zuckerberg recently said the company will pay out $ 1 billion through 2022 to users who create content for Facebook and Instagram. Facebook also said it won’t cut back on creator features like online events and fan subscriptions until 2023, and announced new ways to make money on Instagram in April.

“Investing in creators is nothing new to us, but I’m excited to expand this work over time,” he wrote on Facebook earlier this year.

In addition to a refund, Facebook and Instagram should offer something like double exposure to those who prepaid for the ad on Monday, said Michael Heller, CEO and founder of Talent Resources, a marketing agency that deals with influencers.

Most companies and influencers with campaign posts scheduled for Monday are pushed back to Tuesday or even Friday if there are issues, said Alexa Vogue, vice president of brand partnerships at TTPM Influencer Talent Management. A failure on YouTube or TikTok, where its customers are paid on sight, would have caused more financial damage, she adds.

“Yes, that was a wake-up call, but in the grand scheme of things, successful influencers will always be successful,” she said.

The need to diversify

Many creators and small businesses say Instagram is the platform of choice. It’s easy to connect with users through direct messages and stories, and it offers a more targeted community of dedicated subscribers who convert into sales.

Now the majority have said they will focus on building their website and diversifying the platforms they use, influencers CNBC spoke to said. Some have used Twitter, TikTok, and email to increase sales and connect with audiences during the shutdown.

Francis, who runs the consulting firm, plans to use LinkedIn and mailing lists, a tool that helped her make sales during Monday’s blackout.

For Sanchez, who operates a small candle store, the outage came during a busy season preparing for the holidays. She regularly uses Instagram to tag products, update customers through stories, and redirect people to her Shopify store.

“This is where I do my business,” Sanchez said. “I don’t make hundreds of sales a day. I’m a small candle business but it’s my full-time job. So even though I made three sales that I potentially lost, it’s important for me.”

She used Monday to contact customers and build her mailing list for future outages to better communicate with customers.

Elliott Elkhoury, who sells resources for real estate investors, estimates that he lost between $ 3,000 and $ 5,000 on Monday between the lack of traffic on his platform and social networks and the inability to serve ads.

Between advertising dollars and branded content, Heller suspects Monday’s losses were in the hundreds of millions. The financial blow to customers probably lasted between $ 3 million and $ 4 million, he adds.

Michael Elefante, who manages short-term rentals and teaches others how to manage them, estimates the losses at $ 1,500 to $ 2,500 through affiliate links and paid mentorships. Now he will focus on direct mail and his website.

John Eringman, a financial content creator with more than 50,000 followers on Instagram and 1.2 million on TikTok, estimates he lost a few hundred dollars. It came from a combination of book sales and one-on-one coaching sessions through her Instagram.

Eringman diversified his business by creating a follow on TikTok and a website. But if the outage continued until Wednesday, he could have lost $ 2,500 on a sponsored post for Instagram and TikTok.

“Social networks have a lifespan,” he says. “Make sure you own your audience rather than letting Facebook or Instagram own your audience.”

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