Facebook (once VC darling, turned wall street joke) is trying to find ways to grow their revenue. Fast.
Small business and big brand marketers alike have integrated Facebook into nearly every new campaign and product launch. Facebook’s 1 billion plus users, built-in viral marketing capabilities, and detailed analytics have made it a no-brainer option for marketers. Oh, did I mention that all of the above is free? This might be Facebook’s most compelling reason why businesses have to come to rely on it so heavily. This is also the reason Facebook is feeling the heat to show strong revenue growth. While more page views equal more revenue, Facebook can’t grow unless it converts more businesses to its advertising products.
Facebook’s advertising options have been growing at quite a fast clip: reach generator, log-out screen, Facebook offers, mobile ads – the options seem to be growing on a weekly basis. Facebook has even tested a feature where people could promote their own status updates to reach more of their friends.
A recent shift in the edge-rank algorithm indicates this burgeoning roster of advertising options may not be the answer Facebook (and investors) are looking for.
Facebook page owners may have seen a sharp drop in reach (number of people who have viewed the page’s posts) in recent months. From my experience in pages I manage, the algorithm change favors posts with more engagement. While this change is ultimately good for users, it’s also a very calculated play by Facebook to pad their advertising revenue. Marketers who were reporting tens of thousands of people reached with their Facebook campaigns are now left seemingly no other option other than to pay for their message to have the same impact as it did just a few months ago.
Facebook has had a bit of an identity issue when it comes to who their customers are since they have gone public. Mark Zuckerberg was famously against any feature or function that didn’t enhance Facebook users experience early on in the social network’s life. Now accountable to more than a few angel investors or a VC firm, Facebook has markedly diluted its focus from soley providing value to its users to also including what’s in the best interest of advertisers. The problem is that what’s in the best interest for the user isn’t always in line with what’s best for the advertiser.
A hidden and valuable lesson for marketers
Despite Facebook’s hidden revenue motives behind the edge rank algorithm change, this is a wake up call to marketers – the free ride is over. If you want to reach the same volume of people you were a few months ago, you have two options –
- Create more compelling content
In a strange way, Facebook’s wake-up call to marketers is a valuable one. Growing your brand through earned media as opposed to paid media is something for which all businesses and brands should strive. Using marketing budgets as a crutch to spread boring, unengaging messages is a terrible strategy. Facebook’s shift is forcing marketers to innovate and think of new, engaging ways to communicate their message.
Creating compelling and engaging content is a good communications strategy, regardless of the medium; forcing marketers to start doing so might be in the Facebook user’s best interests after all.
Photo by alancleaver_2000
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