"Pay more to reach more" seems to be the new name of the game. No matter whether brands use organic reach or paid reach, they need to create sharable and engaging content.
For some time now, brands and agencies have been frustrated by a decrease in the organic reach of their Facebook posts. And a growing number believe that this might be due to a recently tweaked algorithm, which is attempting to push them toward using Facebook ads instead.
To explain the social network's changes, Brian Boland, head of the ads product marketing team at Facebook, has written a blog post. While the post explicitly clarifies that the algorithmic changes are not designed to attract more ad dollars, it also delivers two unspoken messages: Facebook is becoming more mindful of quality content, and "pay more to reach more" seems to be the new name of the game.
Boland gave two main reasons for the decline in organic views: The first is that competition in the News Feed is becoming fiercer, as more and more content is created and shared on a daily basis; the second is that Facebook wants to show users the content that is most relevant to them.
"Over the past year, we've made some key changes to improve how News Feed chooses content," he wrote, indicating that producing quality content is key to reaching the Facebook audience.
In January of this year, Facebook changed its News Feed algorithm to differentiate between text status updates from brand Pages and those from Facebook friends. And the social media giant further took action in April to eliminate "like-baiting," where brands ask for likes, shares, and comments in their posts.
"If people are more active and engaged with stories that appear in News Feed, they are also more likely to be active and engaged with content from businesses," Boland noted.
Boland encouraged brands to purchase advertising on Facebook, as it is more efficient than organic reach. The increasing competition in News Feed not only requires that brands produce high-quality content, but also necessitates that they pay to push their content out and gain exposure. In fact, many brands have already paid for Promoted Posts or Sponsored Stories (which function like a Facebook Ad, and are usually more expensive than a Promoted Post), so that their content can be viewed by more Facebook users.
"Like TV, search, newspapers, radio, and virtually every other marketing platform, Facebook is far more effective when businesses use paid media to help meet their goals," Boland wrote, followed by examples to demonstrate that many businesses have found success with Facebook Ads, despite the decreased organic reach.
So is pay-to-play the new rule of the game?
"The new reality is that brands have to pay more to reach more. Just as we saw in the evolution on monetizing Internet eyeballs, brands have to pay to have their higher-quality signal stand above the noise," says Roger Katz, founder and chief executive (CEO) of Friend2Friend, a company that specializes in social engagement.
For Facebook's part, pay-to-play helps the social media giant avoid poor-quality content. "The News Feed is becoming more crowded. We believe Facebook has to stick by their guns to ensure that it doesn't become overcrowded with low-value branded messages," Katz says.
But if brands have to pay more to reach more, should they all place Facebook Ads?
The decision of whether to use Facebook Ads or not depends on brands' expected return on investment (ROI), according to Katz. "Decisions about placement in the News Feed are part of an overall discussion by brands about the ROI of their marketing mix," he says. "[And they don't] differ from any other ROI value discussions they are having in any other marketing channels."
Even with the organic reach drop-off, third-party stats reveal that Facebook is still a valuable marketing tool for brands because it refers a large amount of traffic to websites.
"While brands enjoy hating on Facebook for limiting the reach of Pages, and then allegedly forcing businesses to pay for ads, the social media site still continues to refer lots of traffic to websites when users share links they enjoy with all of their friends," says Danny Wong, marketing manager at Shareaholic, a content amplification and marketing platform.
A recent report shows Facebook's "share of overall visits" for Shareaholic, which quantifies just how much traffic the social media giant has referred to the brand's network of more than 300,000 sites.
It reveals that from last December to March of this year, Facebook has been the largest driver of overall traffic (including direct traffic, social referrals, organic search, and paid search) sites received, compared to other social media platforms like Pinterest and Twitter.
At the time of publishing this story, Shareaholic has not yet publicly released its May 2014 report, but Wong tells ClickZ that Facebook is still a big contributor, as it drove 18.81 percent of sites' overall traffic last month.
"To put all of this into perspective, it is important that businesses understand that while their organic reach from their brand pages has declined, Facebook is still an incredibly valuable resource," Wong says. "While most brands may have lost faith in their fan Pages, they know the world's largest social network will still bless them with tons of organic traffic."
So, how should brands use Facebook now?
An effective strategy, according to Wong, is not one that "revolves around a strong and engaged brand Page," but instead one that provides shareable content and makes influential audience members willing to promote the brand by themselves.
Katz adds that brands need to run engaging calls to action, even when they turn to Facebook Ads.
"If brands continue to believe that engagement is just about running ads, they'll be disappointed," he says. "We've seen results from sponsoring posts in the News Feed far outperform anything that happens in the margin of [brand] Pages, particularly when it involves immersive and rich engagement experiences that encourage conversations and sharing."
"[And] that's where the value of the experience on a social platform lies," he adds.
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Yuyu Chen is a junior reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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