Facebook has spent the past several years selling itself to companies as the best way to conduct quality conversation with the customer at scale. Through Facebook, we could humanize our brand and interact with the individual to an extent never before possible through traditional media.
The social wave quickly overtook the marketing world. In 2013, nearly one quarter of a company’s annual lead generating budget was allocated to blogging/social media, more than doubling the budget allocated to SEO. This was up 23% from 2010.
So it works, right?
Well, this can be difficult to discern. Like many forms of traditional marketing, the full scope of how a Facebook page affects the bottom line can be like navigating through a dim and moonless night. We can use things like multi-channel attribution metrics and Facebook specific promo codes to track sales directly via click-through, but it’s difficult to shed light on the full and accurate picture. How can we measure and attribute the impact of the intangibles like increased brand awareness? Or of view through organic and paid conversions?
The reality is…most companies can’t. At least not with any level of real ROI accuracy. Not with the kind of accuracy that we would need to show the Board. The saving grace is that posting to your Facebook wall doesn’t cost anything. ROI is always positive when compared to a big fat $0!
That, however, is about to change.
Companies have started to see a downward shift in their Facebook post reach over the past 6 months. Ogilvy & Mather found that companies’ posts dropped from reaching 12% of their followers in October to just 6% by February. Facebook has surprisingly been very open about this decline, stating in December that posts were reaching fewer and fewer users. They attributed the drop off to the increase in competition caused by more and more content being pushed out by companies. Seems like a reasonable and logical explanation…nothing dubious here.
That was until the bombshell that dropped this week in the form of an anonymous leak “familiar” with the Facebook camp. It turns out that Facebook is intentionally slashing what they call “organic page reach” (the % of your followers who actually have your posts appear in their news feeds) down to 1-2%. They are actively laying the groundwork for a pay-to-play model, where all of those likes your company has generated over the years are just a CPC away.
Now the attribution equation becomes more important than ever. Companies who cannot adapt and understand the full ROI picture will inevitably abandon Facebook post as a casualty of the social networks greed.
We saw a similar phenomenon when Google announced the shift from the free Google Shopping ads to the CPC based Product Listing Ads in late 2012. A shocking 61% of eComm businesses refused to make the switch, some even vowed to cancel their use of other Google services such as Checkout, hoping somehow to spite the giant of the digital lead-gen world. The inevitable consequence was the drastic reduction in the competition vying for each click. Those of us who were able to adapt (or were savvy enough to understand that they couldn’t and partnered with a vendor who could) took advantage of low CPCs, increased market share and rode the wave of inexpensive revenue for the next three fiscal quarters.
So in conclusion, is it frustrating that after all the hard work that went into building up an organic following of customers, Facebook has decided to cash in at our expense? Absolutely. But recent history has shown, if we are smart enough and savvy enough to see through the fog, there may just be an opportunity presenting itself on the horizon.