Is Facebook Biting the Hand that Feeds it?

In September, Facebook quietly changed one of its key algorithms, the “EdgeRank” algorithm. This algorithm, in simple terms, controls which Facebook posts ends up in fans’ news feeds.

The change means that companies’ Facebook posts will reach a small proportion of their fans instead of their entire fan base. In some cases, pages with a large following will potentially reach just 16% of their total community.  Ultimately, the change puts a huge limitation on organic reach and companies are likely to see their reach figures fall and fall.

As a result of these changes, marketers who want to reach beyond this small fraction and ensure their fans see the majority of their content have little choice but to run promoted posts, i.e. spend money.

Unsurprisingly, this drastic change has not been met with wholesale enthusiasm. So, what has Facebook offered in way of a response (or excuse)?  Facebook claims change has come about in order to ensure that users see the most interesting stories; therefore the posts they are most likely to engage with. A little dubious I’d say, considering the economic rewards Facebook will be reaping from promoted posts. Is it possible that there is a connection between this unpopular change and Facebook’s dwindling share prices?

With little choice but to implement promoted posts, it should be assumed such a campaign would guarantee certified results.  But perhaps not, as the effectiveness of promoted posts has been questioned. Targeting is a key issue.  Despite claims to the contrary, Facebook is still littered with fake profiles, thus promoted posts can mistakenly be buoyed by fake users.  Whether or not all relevant users are targeted is also unknown. There are key issues surrounding the cast of connection; if I target you and your friends, am I getting your direct friends or am I getting six degrees of John Smith?

Most importantly, there are no long term advantages to be gained from promoted posts. Consider the effect of TV advertising, site traffic usually spikes during the ad, then falls dramatically afterwards, as expected. There is usually a lingering benefit, however, as site traffic often remains at a slightly higher level to what it was prior to the campaign. The same cannot be said of promoted posts.

In essence, Facebook has given advertisers, their sole source of revenue, a kick in the teeth.  With the inability to reach their whole fan base due to the “EdgeRank” algorithm, Facebook has set an ultimatum. In order to maintain and increase your brand awareness and reach, pay for promoted posts. Do this, or see a reduction in reach and engagement, leading to a decrease in traffic and conversions.

This will be an interesting one to watch, let us know what you think.