On February 29th Facebook surprised some of its biggest clients when it revealed that on average any given post to a brand timeline would find its way organically to only 16% of the news feeds of that brand's fans. This surprised some more than others but for all invested in the platform it was a sharp reminder that earning media exposure was not as simple as they might have thought or hoped. Concurrent with this revelation was the launch of a series of new Facebook ad products that allowed those same advertisers guaranteed reach into those news feeds and thereassurance that the fan bases they acquired had a specific value as the more fans you had the more reach you could buy. Put simply advertising in user news feeds was restricted to the fans of brands and to the friends of those fans. For advertisers with big fan bases in the millions this was pretty good as it paid off in the ability to achieve significant reach to, and beyond, their fan base and while falling short of blanket coverage it went a long way in the right direction. For brands who had not made these investments the reach into news feeds, the beating heart of the user experience, was limited.
But now things are changing. This week Facebook crossed a new line. On an experimental basis news feed is open to all who are prepared to pay and that is significant in two ways. First, if Facebook seeks to limit the proportion of all news feed entries from brands there will be a limit on available inventory. When limited inventory is competed for by more brands there is an impact on price; this affects every advertiser but may be seen by the 'much friended' as a particularly unwelcome development. Secondly, we might speculate that users will not distinguish between messaging from brands that they have 'friended' and those they have not and come to place all brands into the same box of intruders into their use of a platform they believe to be theirs. A few years ago we asked the question "is MySpace your space?", it may be relevant to ask it again.
Clearly the full impact of this change cannot be predicted with any certainty and Facebook has a history of experimentation with the user experience and making policy reversals in the face of adverse reaction. They do not, however, have a history of policy reversals in the face of adverse reaction from advertisers. This sets up a multi-faceted challenge for a public company that needs to increase its revenues by winning the confidence of advertisers while maintaining the trust of its users and it is easy to imagine that this change may knock those stars out of alignment.
It is our perspective that large fan bases still do have significant value. Organic reach and sharing remain high value events and actions and those advertisers that post with accurate cadence and quality that creates a fair value exchange with the user will continue to be advantaged against those that don't. In addition the quality score of ads that impact algorithmic reach will become of increasing importance and perhaps impact the value of 'likes' over time.
Of course all this will be settled in the numbers. The number of users that react negatively, the number of advertisers who see their production and media return on investment impacted by the change and, for some the impact of these changes on the number that sits next to the stock ticker FB.
Rob Norman is Chief Digital Officer Global of GroupM. Rob’s principle tasks are developing the interaction organization within GroupM, developing positioning and thought leadership and leading the interaction contribution to business development. You can reach Rob at @robnormanor firstname.lastname@example.org.
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