Arthur Policarpio
Jan 19, 2018

Facebook's big newsfeed rethink: 5 key lessons for brands

Fans are useless, organic reach is (mostly) dead, and three other truths you need to absorb.

Facebook's big newsfeed rethink: 5 key lessons for brands

On January 12, Mark Zuckerberg announced in a post that Facebook was making major changes in its newsfeed algorithm. The gist is that Facebook will be prioritising content posted by friends and family over those by publishers, brands and advertisers.

This means that Facebook users will see less content on their newsfeeds from brands and publishers. Expect to see less of the bad stuff (fake news, clickbait articles) but also less good stuff from brands and publishers (viral videos, news from legit publishers, brand content).

The changes are meant to encourage more “meaningful interactions” within the social network between people, brands and publishers. And while most Facebook users will likely welcome these changes, many publishers and brands have been up in arms with the potential for less organic visibility of their content on a platform with 2 billion users, where they have been investing massively over the past several years.

In this article, I’d like to share five key lessons for both brands and publishers from this major newsfeed update of Facebook.

Lesson 1: Facebook fans are useless

What use is a Facebook fan if they can’t see your posts anyway? When Facebook’s Pages product launched in 2007, the promise for brands was compelling: invest a little bit in acquiring fans, then advertise/market your message to them for free. In a world where a 30-second television spot costs a huge amount of money, Pages became sort of a marketing nirvana. This led to a rush of massive fan acquisition budgets and campaigns. Most digital briefs were single-minded: acquire millions of Facebook fans.

When 2012 rolled along however, brands found out that only around 16% of their fans actually saw their posts. This 16% organic reach statistic was still a respectable number at that time; 16% of a brand's fanssaw its content for free. Facebook was still treated as a free marketing medium, only this time brands realised they'd need to invest a little bit in boosting posts through advertising.

Over the next five years, however, organic reach has been steadily on the decline. Currently, it is only 1% to 2% for the average Facebook fan page. If you had invested $500,000 to acquire 1 million fans, therefore, this means only 5,000 to 10,000 people see your content for free. For the rest, you have to pay.

This leads us to the second lesson.

Lesson 2: Organic reach is practically dead

Organic reach, prior to Facebook’s latest newsfeed announcement, was already at the 1% to 2% level. With the latest announcement, most brands should expect this number to go even lower. How low is low? No one knows for now, but organic reach below 1% is not an impossible number to expect.

The more prudent way of thinking about this will be to assume zero organic reach from your own brand pages. Yes, once in a while you may be able to create that amazing viral content that people will organically share. But the reality is that these hits don’t come often—majority of the content brands will produce will realistically not be viral hits. Now, with the algorithm changes, even these viral hits that were organically shared before may not even appear that often in your newsfeed anymore.

Lesson 3: Facebook is a paid media channel, not owned or earned

In prior years, Facebook has been largely classified as both an owned media channel, as well as an earned media channel. It was originally marketed as an owned channel by Facebook: the ultimate CRM platform, where you can “acquire” a database of your customers, then reach out to them for free. It was also recognised as an earned media platform, since fans shared brand content and therefore generated free earned media for the brand.

In my opinion, though, today Facebook should be classified principally as a paid media channel. How can it be an earned media platform if brands can expect organic reach of less than 1%?

It’s also not an owned media platform since the brutal reality is that brands and publishers do not own their fans—it’s Facebook that owns and controls their fans and how they engage with them. Brands have zero control over the rules that govern interactions with their fans. Facebook can change rules at a whim - as they have done now—and there is nothing that the brands who have invested millions in acquiring their fans can do.

That said, Facebook is a paid media channel, and a very, very good one at that. You do not need a 1 million fan base to distribute content to a million people in Facebook. All you need is your own brand page, some fans to populate it, then you just launch an advertising campaign.

Fans are useless—in fact, based on my personal experience with various digital campaigns we have managed in our agency Mobext, boosting posts so that they will be visible to your fans is not really the best way to achieve your brand’s objectives. Creating advertising campaigns around specific business objectives (drive traffic to a site, conversions, etc) is much more efficient and effective than just boosting posts. For example, the effective cost per click on boosted content (that promotes a link to an external web page) is so much higher than an advertising campaign that utilises the traffic objective in order to drive visits to a particular web content.

Lesson 4: A healthy balance between paid, owned and earned is best

Because of the ubiquity of Facebook as a platform in many markets, many marketers still have this tendency to practically equate “digital marketing” and “digital strategy” with just Facebook. I have encountered many marketers who are still quite obsessed with achieving Facebook platform-specific objectives and think that the primary goal of their digital marketing is to acquire 1 million fans, to get 100,000 likes, etc.

Yes, Facebook is important, but it is not digital. Facebook is a highly-effective and highly-efficient paid media channel. However, there are many other paid media channels available for brands that should also be considered and experimented on.

Furthermore, there should be a healthy balance between paid, owned and earned media platforms in any brand’s digital media plans. It’s important to invest in all of these different platforms, and not over-index your brand spending on just one of the three (paid, owned, earned), and on just a single paid media platform at that.

Lesson 5: Brands need to think more like publishers

The last and most important lesson from this newsfeed algorithm change of Facebook is that brands need to think more like publishers moving forward, instead of just advertisers. Brands need to diversify away from just a single digital platform that controls majority of digital engagement with their consumers. Being too platform-reliant will mean that your brand will be vulnerable to changes in the rules of these platforms—as well as changes in pricing! Expect Facebook advertising prices to increase, as supply decreases and demand remains the same.

Brands need to invest in creating and growing their owned media assets, such as their brand websites and apps. For a while, many brands even questioned the need to have a website—why invest in your own brand website if you can just replicate the same digital experience in Facebook which has a built in audience already? Now we see the folly of that reasoning: brands who have not invested in building the content and traffic of their own brand properties will have to pay more to reach the audience that they have already paid to acquire via Facebook.

Let me share a case study of Mobext in the Philippines that illustrates the importance of brands thinking like publishers and investing in content marketing. Two years ago, when we started working with a top local healthcare company, its brand website was practically non-existent (less than 1,000 visits per month). The strategy that we pitched was the importance of the brand thinking like a publisher and investing in content marketing. The vision was to build their website into the top local resource for health.

We created hundreds of original articles (205 new articles in 2017 alone, to be precise), optimised these for search and seeded them on social media. After two years, the investment has paid off massively. The brand website is No. 1 in its category, with close to 300,000 visits per month. The site ranks in the top 100 search results for more than 14,000 keywords, leading to the majority of its traffic (80%) coming from free, organic search queries.

We also measured the return on the brand's content investment, by comparing the value of the free organic traffic that it gets (how much would this traffic have cost if we had paid for it via paid search) with the one-time investment it made on developing the content and the website. The ROI figure we arrived at was 13:1. For every dollar the company invested in content marketing, it generated $13 worth of free media value. And the great thing is that the content it has published will continue generating free organic traffic for the next several years.

Because of this, even if Facebook changes its algorithm and less of the brand content gets shown organically on Facebook page, the brand can rest easy; it has built an owned-media platform where it can distribute content for free to hundreds of thousands of people every single month.

Arthur Policarpio is CEO of Mobext Philippines.

This article was originally published, in slightly different form, on the Mobext blog.

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