Brands Are About to Suffer Facebook Withdrawal

Brands Are About to Suffer Facebook Withdrawal

 The declining reach of Facebook Pages as a brand vehicle has been an issue for quite some time now. In recent months it has reached new lows, which has many in the industry proclaiming an end to Facebook working free for brands. A recent study found a drop in reach of roughly 1% per month over the past half-year. Companies’ posts reaching their followers dropped from 12% in October to just 6% by February, a truly disheartening trend for those who have come to rely on it.

The ability to build communities of fans was a key part of Facebook’s promotional appeal. Being able to publish targeted content directly to fans and being able to engage with them directly is a vital aspect of modern marketing. Facebook created this ecosystem for brand engagement and it rapidly became a significant part of the marketing mix.

Reach Starts Slipping

But, reach has started to slip and declines seem destined to continue even as they approach zero. Valleywag put it very well recently:

A source professionally familiar with Facebook’s marketing strategy, who requested to remain anonymous, tells Valleywag that the social network is ‘in the process of’ slashing ‘organic page reach’ down to 1 or 2 percent. This would affect ‘all brands’ — meaning an advertising giant like Nike, which has spent a great deal of Internet effort collecting over 16 million Facebook likes, would only be able to affect [around] 160,000 of them when it pushes out a post. Companies like Gawker, too, rely on gratis Facebook propagation for a huge amount of their audience.

That 160,000 still sounds like a lot of people, sure. But how about my favorite restaurant here in New York, Pies ‘n’ Thighs, which has only 3,281 likes — most likely locals who actually care about updates from a nearby restaurant? They would reach only a few dozen customers. A smaller business might only reach one. This also assumes the people ‘reached’ bother to even look at the post.

This is rough news for marketers and smaller operations, especially following Google’s removal of keyword data and algorithm changes. While large brands like Nike can afford to do heavy buy-ins on Facebook ads, it looks increasingly as though any Page lacking that scale and budget will be left in the cold.

From bands and fan clubs to small businesses across America, there are numerous brands and organizations that have invested huge amounts of effort into building a presence on the platform. As we move toward zero organic reach, it is beginning to look as though those efforts may have been for naught.

Big News

To give you an idea of the true scale of the issue, consider that the topic has escaped the specialized news channels of the technorati and is now the subject of mainstream news articles, including recent coverage in Time.

As with so many topics the best question to ask is “cui bono?” — Latin for “who profits?” If present trends continue, it certainly won’t be the smaller brands. Large company Pages still have potential to prosper, but only if they buy advertising. Facebook on the other hand? They seem to be banking on their absurdly huge user base (last measured at 1.2 billion) to keep marketers interested. The Time article notes that Zuckerberg’s baby is raking in the cash, and in ever increasing amounts.

The transition to paid marketing on what has long been a free-distribution platform may be a tough sell for some brands, particularly small organizations or individuals who have built up audiences over years. So far, though, pressing the screws to Pages hasn’t hurt Facebook’s bottom line — the company generated $7 billion in ad revenue in 2013, and research firm eMarketer projects that figure will grow to about $10.8 billion this year. That’s good news for the company’s investors, but maybe less so for the people suddenly being asked to fund the social network’s financial growth.

Facebook Pages as a brand vehicle

Alternatives to Facebook

I find myself wondering if this is the push needed to make brands begin exploring Google Plus and other alternatives. It would not be the first time we have seen the king of the hill deposed — remember AOL?

These platforms may not have Facebook’s 1.2 billion users, but they do have organic reach among the users they do have. They also have the advantage of not being a budgetary expenditure, at least not for advertising. The question is one of engagement, and higher engagement within a smaller audience is frequently more useful than a huge audience with low engagement. After all, it all comes down to how many people see your content.

Do you run a Facebook Page for an organization or brand? Let us know what strategies you are considering in light of this seismic change. We’d love to compare notes!

Image by enoc vt.

About George Williams

George “Loki” Williams is the community and brand manager for award wining game company Savage Mojo, Ltd. and the owner of SocialGumbo, LLC, an online consultancy specializing in Web content and online communications. Loki has produced content for clients including the Open Society Institute, National Association of Broadcasters, Kobold Press, and Kaiser Permanente. His work has been seen or written about in The New York Times, The BBC, Air America, The Gambit Weekly, and NOLA.com, among others.

  

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  1. Loki, There was a lot of negative talk about the cost of promoted posts at the recent Economist CMO Conference. Several CMO’s recommended against putting energy into any network that did not allow you to communicate directly, at will with all your followers.

    Kraft’s VP of CRM, Bob Rupcyznski, spoke highly of Tumblr as an alternative social platform. On the other side, the CMO at FritoLay, Ann Mukherjee, said the results they’ve gotten from promoted posts on Facebook show that, “If you do it right, the juice is worth the squeeze.” Thanks for covering this important topic.