Facebook's new policy means that it could become more expensive to maintain a brand page and reach all of your fans than it is to market through other channels.
If you pay close attention to your Facebook newsfeed, you may have noticed something: in spite of all the pages you've "liked" (musicians, politicians, movies, and more), you're not seeing very many posts from them. Maybe you assumed that those pages weren't updating very often, or that Facebook was automatically filtering posts that weren't as popular. But your assumptions would be incorrect, because Facebook has changed the way brand pages work - all in the name of driving up its advertising revenues.
Before these changes, if you "liked" a brand on Facebook, you would see all of the updates it posted. This makes sense, because if you're interested enough to voluntarily sign up for updates from a company, website, or movie franchise, it means you want to hear from them regularly. If you didn't, you wouldn't click "like." But it doesn't work that way anymore; "liking" a brand doesn't guarantee that you'll see what it's up to. In fact, when a brand page posts an update, Facebook only pushes that post to about 15 percent of that brand's followers. So how do you reach all of your followers, if it's not enough that they signed up to get your updates?
Not surprisingly, Facebook offers a solution to its own manufactured problem: pay up. Currently, if you have a brand page and you want to reach 100 percent of fans who "liked" your page - you know, the users whose "likes" you paid to earn - you have to pay Facebook. And you have to "sponsor" each individual post.
So what does this mean for the usefulness of a brand page? Facebook pages, Google+ pages, Twitter handles, etc., while valuable, are often used primarily to engage and drive users to a brand's website. But Facebook's new policy means that it could become more expensive to maintain a brand page and reach all of your fans than it is to market through other channels or even to maintain your site and other digital properties. What used to be a relatively inexpensive marketing tool just became one that, depending on how you use it, may eclipse the relative cost of maintaining your traditional website.
This barrier to entry benefits Facebook, and Facebook alone, and especially harms small and mid-size brands with lower marketing budgets. Now, in order to reach all its fans - who, as we know, have already been engaged and are actively interested in this brand's updates - a company could pay up to $200 per post. For certain companies, posting 10 times per day isn't uncommon. Dangerousminds.net, for example, calculated that to reach its total 50,000+ fanbase for 10 posts a day, it would cost well over $650,000 a year. Paying this fee almost certainly wouldn't generate enough revenue to be worth the investment.
Popularity vs. Payment
Many brands and digital marketers will have to essentially pick which posts they value more and how many fans they want to reach. Every post will be a saturation vs. cost balancing act. Larger brands like Pepsi might already have the name recognition, but reaching 100 percent of its 9 million fans will hit the company pretty hard as well. Revenue from brands like this seems to be the only thing Facebook cares about, as profits from ads were no longer enough.
This is a risky, calculated move for Facebook. As brands discover these changes and realize the actual cost involved in reaching an audience they previously had unfettered access to, they could very well start to abandon Facebook as a marketing platform. If Facebook doesn't rethink its strategy, designing an online marketing plan that places more emphasis on sites such as Twitter, Pinterest, or even Google+ could provide much more value than maintaining a Facebook page. Brands that decide to use Facebook will have to think about how many fans they can afford not to reach.
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Andrea Fishman, VP of strategy and a partner at BGT Partners, leads BGT's Chicago office and has extensive experience in marketing and management consulting. She and her team drive value to BGT's clients through the development of behavioral marketing programs, web analytics, measurement programs, industry benchmarking, competitive assessments, and the design of integrated marketing programs.
Andrea has been with BGT since 2003 and is credited with strengthening partnerships with such clients as ADT, Sony, ADP, and Avaya. Prior to joining BGT, she served as global vice president at divine, inc. She's also held strategic positions within marchFIRST, The Lewin Group, and the office of U.S. Sen. Edward Kennedy.
A graduate of Brandeis University, Fishman was awarded the Wasserman Scholarship for academic achievement and was named a 2010 Stevie Awards Finalist as Best Executive in a Service Business. She is a frequent judge for the eHealthcare Leadership Awards and is involved with the Special Olympics and Chicago Cares, a community service organization.
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