March 1, 2012

Facebook is about to Double-Dip. {Article in English & Spanish}

(Para leer en Español, haga clic aquí.)

Attention Facebook Advertisers.

This past December I wrote an article postulating that Facebook was potentially defrauding advertisers out of millions (if not billions) of advertising dollars.

You see, I, along with several other business advertisers, had figured out that we were only able to reach on average 10% of our fan base: fans for which we had paid lots of advertising dollars. These were fans that had come to our pages of their own free will and had chosen to “like” our pages because they wished to receive our content. We understood as advertisers that at any time these fans could decide they were bored with our content and “unlike” our page and we’d be out a fan. That is a risk any advertiser takes. A risk that we did not willingly or knowingly accept was that we would not be able to reach even those fans who had chosen to be there, those fans who wished to receive our content.

I speculated, and further had it confirmed by a TechCrunch writer, that Facebook had some kind of complicated algorithm that was determining exactly which fans (and people in general on Facebook) were receiving which content. What I did know was that not all fans were receiving all of my content, and in fact on most days it seemed that the majority of my fans weren’t receiving any of my content. But what I did not know were the exact details of the algorithm, how it was calculated, and what on earth could have been Facebook’s motivation to essentially undermine their bread and butter; the advertisers.

Today I have discovered why. TechCrunch has just published an article confirming that the average Facebook post, including those posted by regular people like all you readers, as well as those of business pages, are only reaching 16% of your friends and/or fan base. As a basic user of Facebook it may anger you to know that only 16% of your friends are receiving possibly your most critical of updates. Ever felt slighted by a friend for not acknowledging something major that you posted? I can only imagine the number of fallings out that have occurred in the new world of social media. Well…it may not have been a nasty friend at all. It may have been the fault of Facebook.

Now imagine that same scenario for Facebook’s hundreds of thousands (if not millions) of paying advertisers. Imagine you have consciously made a large business investment in Facebook advertising, because you know how strategic it is; how perfectly tailored and targeted your advertising can be. No more random billboards targeted at Joe-schmoe, instead you are able to target exactly who you want for your business; the exact age, gender, or race demographic, the exact geographic location, the exact interests that are related to your business service or product. This sounds perfect, right? Yes. To many advertisers, including myself, this did sound perfect. And it was perfect… in the beginning. I myself was able to attract 25,000 fans in 40 countries in 6 short months and the best part was that these were not just random, willy-nilly people; these were people who were in fact interested in my content. I was in advertiser heaven.

But then, as I wrote in my last piece, the analytics began to suddenly change. Although those same number of fans were still there, I could see that they were no longer interacting in the same way as they had been for months prior. Facebook would try to tell us that our content simply wasn’t engaging enough, but I knew it was more than that. I had had regular and consistent traffic for months on end with only growth, not a dip in my activity. And then one day, as if overnight, it all changed. Facebook had made some “secret” change behind the scenes, or so it seemed.

Well, now that TechCrunch has published this article we know exactly what was going on for all of that time and now we know why. Josh Constine of TechCrunch writes,

“After his Q&A session about ads during the Facebook Marketing Conference, I followed up with Boland, asking if the 16 percent average distribution rate hampered communication. He defended Facebook’s news feed, saying “No, there are pieces of content you create that are interesting, and there’s some that are not.” And the 16 percent doesn’t just apply to users. Business Pages have the same average reach, which is why Facebook is launching its new “Reach Generator” to help marketers buy extra distribution of their Page posts on the ads sidebar, in the web and mobile news feed, and even on the logout page.”

After months of trying to figure out what on earth could possibly be Facebook’s motivation to undermine and anger thousands of advertisers, suddenly it seemed so obvious. It was of course all about money. As stated above, Facebook is now going to be launching their new “Reach Generator” and those of us who have already collectively sunk millions (if not billions) of dollars into our advertising, are now in fact going to be required to pay more if we hope to reach the exact same fans that we already paid for once. Can we say “double-dipping?”

By Svilen.milev via Wikimedia Commons

So it basically boils down to this: Advertiser pays lots of money to buy brilliant, targeted Facebook ad. Advertiser is very happy to be reaching targeted fans. Fans are willingly choosing to proactively “like” whatever fan pages appeal to them. Fans sign up for said business page because they wish to continue to receive updates and promotions related to that business. Fans are happy to receive said advertiser’s content, as evidenced by the fact that they continue to stick around (let’s remember that at any moment a fan has the option to “unlike” a page!).  But wait, despite spending lots of moola, the advertiser is suddenly not able to reach those same fans for which they have already paid. And bummer, now the fans themselves are irritated because they are no longer receiving those business updates that they were so excited to receive in the first place. And now Facebook wants advertisers to pay more money to reach those same fans for whom they have already paid, those same fans who are choosing to still be on that fan page to receive their content.

What is wrong with this picture? I don’t think I need to say much more than that. Now I’m no naive fool, I know that Facebook is certainly not out there for the greater good of humanity (despite any claims to the contrary). I know they are out there to make money like any other business in a capitalist society. But my friends, this takes greed to a whole other level. There is not a shred of doubt in my mind that these actions towards advertisers on the part of Facebook are egregiously unethical. The question is, are they more than that?

That said, you can now find me on Twitter at @jeannienpage. 🙂

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iheartmyyogi Mar 29, 2012 3:18pm

Yeah I see that many of the groups say Friends only, whilst a few say All Posts. I am part of many groups (just so I can sell my wares…) interesting though the differences and I don't remember setting them.

Should we start a Facebook chain to inform folks of this?

Steve Mar 19, 2012 10:39pm

When I started our Facebook page, I initially bought FB advertising to reach about 10,000 fans. This was back in late 2010. Back then when we posted a status on our page it would reach almost all fans who had liked our page. Sometime in 2011, I began to notice that although our fan count was growing rapidly, the reach for the posts were declining as a percentage of fans. I suspected Facebook was throttling reach at this point. Now this article confirms what I had been suspecting. Now my page has over 200,000 fans but sometimes we reach just 10,000-20,000 fans on posts.

What Facebook is doing by trying to get Pages to pay to reach fans they have already accumulated is bad business. I hope this story spreads to more Facebook advertisers so they know what is going on. After we accumulated 10,000 fans through FB advertising, we grew our fans to 200,000+ organically with no advertising. We won't be participating in this Reach Generator program Facebook is rumored to be planning so we can pay to reach fans we already have. If it's true that most pages just reach 16% of their fans then what a colossal waste of marketing effort it has been to not be able to access 84% of our fans. This has really soured my opinion of Facebook as a component of our marketing strategy.

Instead we will go back to making our website the core part of our marketing strategy. We will relegate Facebook to a minor role. Brands that have spent a lot of money on their fan base should be enraged.

I'm wondering if Facebook lets the humongous brands reach a higher percentage of their fans by having a a special exception list so they aren't limited by the 16% average reach. This wouldn't surprise me.

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Jeannie Page

Jeannie Page is a reformed .com management professional who has made a dramatic shift in her life, a shift to follow her bliss and to get into alignment in order to be a force for good in the world. Martha Stewart’s Blogger of the Month in Whole Living Magazine, Jeannie is also the founder of The Yoga Diaries and also maintains her own blog The Awakened Life. Jeannie, and details about her current book project, can be found on Facebook here and on Twitter at @jeannienpage. Jeannie’s Spanish Facebook page can be found here. Jeannie also previously served as the Spanish Language Editor for Elephant Journal. Click here for the Elephant Journal en Español Facebook page. ____________________________________________________________________________________________________
Jeannie Page es una profesional de gestión reformada quien ha hecho un gran cambio en su vida, un cambio para seguir a su felicidad, para entrar en la alineación y ser una fuerza del bien en el mundo. Ella mantiene un Blog a Despertando a la Vida. Jeannie, y detalles sobre su proyecto de libro actual, se pueden encontrar en Facebook aquí y en Twitter a @JeanniePageES. Jeannie también fue la Editora del Idioma Española para Elephant Journal. Haga clic aquí para la página de Facebook de Elephant Journal en Español.