RamKrishna Raja
Apr 15, 2014

Squeezebook?

Facebook is slowly turning into an 800-pound, not-so-friendly gorilla that is squeezing brands from both directions.

Squeezebook?

After almost a decade of trying to justify its conversion ‘potential’ to brands, social media has finally matured into one of the key drivers of e-commerce. Today, if a brand is not able to convert through social, it is getting abundantly clear that the onus is on the brand and agency rather than the relevancy or effectiveness of the social-media platforms they leverage.

In case you need proof, I suggest you hop on over to Shopify and read its social commerce report that came out a month ago. While this study is Shopify-centric, I do believe that 's-commerce' will become the status quo through 2014 and 2015, and thus this study is truly a dipstick into things to come.

Three truths stand out from the study:

  • All key social platforms (ad-driven/organic) drive e-commerce
  • Facebook rules. It is the big kahuna.
  • Video content-driven conversions rock. 

Of the three truths, the first and the third I am very excited about. But the second…let’s just say I have mixed feelings about it. I want to focus this piece on why I have an issue with the second truth rather than expounding the merits and modalities of each social platform—that’s for your agency folks to tell you (or you can call me and I can enlighten you over a masala chai).

Fact is, Facebook rules s-commerce traffic and conversions today. Isn’t that a reason to cheer and be merry? Given that brands have spent millions in building sizeable fan bases and pored over a multitude of decks and reports to drive those ‘often-transient’ Facebook metrics up?

Well my friends, I am afraid it’s not that straightforward. Facebook, for good or bad, is slowly turning into an 800-pound, not-so-friendly gorilla that is squeezing brands from both directions—up and down. How, you ask? Let me explain.

The downward ‘reach squeeze’

Facebook has dramatically reduced organic reach for brands via their Facebook page properties. Reach has gone down by as much as 3X year-over-year. Brands truly do not have a clear idea of what formula Facebook uses to throttle organic reach. The closest formula to understanding how the platform throttles your brand posts (right) comes from a great Techcrunch piece on the subject by Josh Constine, which you really should read.

To sober you up even more, the fine print on that formula (click the image to see it full size) caveats that Facebook also looks at 100,000 other ‘personalized factors’ on determining what’s shown to your fans. Simply put, no one has a clue as to what makes it through this reach throttle, unless of course, you pay up. Then you’re in for a ‘like’ orgy.

The upward ‘Ad price squeeze’

Those smaller ad units on the right rail of Facebook are soon going to be gone. They are going to be bigger and more ‘native’—aka the same size as the desktop newsfeed ad. Bigger size = lesser number of ads = upward pricing squeeze. 

Add this to the already inflating ad prices, and you realize it’s a double whammy. Brands will have to pony up more for essentially the same ad unit. Not long ago, on Facebook land, more money used to mean more visibility. Now more money is visibility. Well played Facebook. Well played. Slow clap.

So what do brands do? Fret not my dear brand manager, the answers also lie in the same Shopify report. Ever heard of Polyvore? Did you know that Vimeo and YouTube are awesome s-commerce drivers? And that there are verticals where Facebook does not dominate and Twitter/Pinterest does? Or that Facebook’s numbers don’t hold a candle to Pinterest’s when it comes to women shopping online? Did you even know that Reddit existed? There is a whole wide social world out there, and no single platform should hold you hostage in reaching your fans socially.

Get off the ‘Facebook-only’ world and focus on diversifying your social presence by identifying which content+platform combinations are best for your brand objectives. Ask your agency to identify this for you. And to ensure that you don’t lose out of Facebook in the interim—which you simply cannot—make sure that you leverage trading desks to drive your Facebook ad spends to mitigate ‘organic’ ad rate inflation.  

The sad truth is that you’ve got no other choice but to be on Facebook for now. And that is precisely why I call it the ‘Squeezebook’. It’s coming up on Easter, and frankly speaking, start getting your social eggs off the Facebook basket, for it’s getting be an expensive egg hunt.

Having said that, I do realize that my prospects of landing a job at Facebook have now all but evaporated. But hey, such is life. 

RamKrishna Raja is a digital marketer on sabbatical and is looking for opportunities to help brands and agencies that see eye-to-eye on issues ‘like’ this.  

 

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