Facebook to Brands: Friends Come First

Published on Author Eli Fennell

FacebookFriendship

Facebook is more than just a social network.  With over 1.3 billion users each month, many of whom visit more than one time per day from their phones, tablets, and PC’s, the News Feed is one of the dominant media forces of the internet era, or frankly of human history.  So when they make a change to their News Feed algorithms, whether or not most of their users notice, the millions of brands, publishers, public figures, and celebrities who depend on it for at least part of their traffic take notice.

The Social Network’s latest algorithm tweaks present a challenge for everyone who uses Facebook for more than just reaching Friends and Family, especially for Page owners. Going forward, the News Feed’s algorithms will give higher priority to Posts from “the people you are friends with on Facebook”. Despite years of courting businesses and publishers to rely on their Pages to generate referral traffic, the company readily admits that these changes “may cause reach and referral traffic to decline” for Pages, where ‘may’ should be read as meaning ‘almost certainly will’. This follows on a similar update the previous year intended to give higher News Feed ranking to direct Posts “from the friends [our users] care about.”

It’s easy enough to read the not-so-subtle ‘between the lines’ of these updates and see that the biggest losers will be anyone using a Page or any type of account other than a personal Facebook Profile.  In addition, these changes are likely to favor updates from your “Friends”, rather than accounts you’ve just Subscribed to follow (i.e. personal accounts with Following enabled, such as journalists). Along with this, your News Feed will show fewer stories about Friends Liking or Commenting on other Posts, a change which I’m sure many users will welcome.  Again, the emphasis is on “Direct” Posts from your “Friends” and Family.

Other social networks generally favor or focus entirely on this type of direct sharing (Instagram, for example), so while this is hardly revolutionary, it is a healthy change nonetheless.  Facebook’s own figures show that the average News Feed could be exposed to over 1500 posts per day without algorithmic filtering, which reduces this to about 300; surely this doesn’t leave much room for showing every frivolous ‘Like’ or ‘Comment’. In addition, these moves may help Facebook combat the threat of so-called ‘context collapse’, whereby users have been sharing more news but fewer ‘personal’ and ‘intimate’ posts (baby pics, graduation announcements, etc…), a factor some experts believe to be partly responsible for the rise of Snachat as a legitimate threat to the social network giant.

Former White House Administrator Cass Sunstein suspects these changes may have a significant profit motive, arguing (among other things), “Facebook has an obligation to its shareholders, and if its News Feed really can be turned into a Daily Me, it might well get more clicks, which means more revenue.” Writing for PandoDaily, David Holmes agrees that, “[E]ven if these new algorithmic changes were informed by user feedback, it’s impossible to ignore the ways these updates benefit Facebook’s own margins and those of its advertising partners — all at the expense of publishers.”

While I can sympathize with their cynical interpretations, which I suspect aren’t entirely unfounded, I think the truth lay somewhere in the middle. Rather than seeing these News Feed tweaks as a naked grab for profit, instead I would argue that these are primarily defensive moves to secure their social ‘moat’ as the network nearly everyone has an account with.  Over the years, as their audience grew larger, Facebook began to experiment with ways to ‘reprogram’ their users.  Being a network for Friends and Family was great, but they hungered for more, to become the Portal to the Web controlling all that you see and hear (including the horizontal and the vertical, as per The Outer Limits narration).

Yet, however many experiments they’ve thrown at killing Twitter, competing with Google or Amazon in eCommerce and Search, becoming the go-to network for photographers, becoming a go-to news source, etc…, in the end they’ve always been compelled to revert to their most basic model: Facebook is where you go to keep up with the people you care about the most. Anyone can build a news app or a photo app, after all, some of which are far better for these purposes due to a great focus, but only Facebook virtually ‘owns’ your social graph.

By way of a helpful analogy, imagine that you’re hanging out with friends and family in real life.  You may discuss news; you may discuss the latest Star Trek: Beyond movie trailer with Rihanna; you may debate your favorite sports teams and players.  You may do any number of these things or others… but you’ll probably also discuss weddings, baby showers, promotions or setbacks at work, vacations, holidays, birthdays, graduations, plans for the evening, etc… In its early days, Facebook was most famous and exciting for latter, personal updates and discussions, though the former could be found as well.

Now, extending the analogy, imagine getting together in a single place at a single time with not only your friends and family, but also acquaintances, coworkers, former roommates, public figures, representatives of major brands, etc…  At first, perhaps, the novelty of this might seem appealing, but this would soon fade. You see your favorite pop singer in the corner, so close you can almost reach out and touch her, but soon you realize she isn’t paying you any attention; a reporter comes over and asks your opinion of the latest trend, but when you watch her broadcast later, she gives you nary a mention; a Coca Cola representative asks for your ideas about their next Polar Bear themed Christmas ad, but is soon overwhelmed by a flood of people sharing their own ideas, and now he’s no longer talking to you, he’s talking at the crowd. Eventually, you’d be pretty much back in the same clique you started with: your Friends, Family, Colleagues, and close Acquaintances and Associates. This is what Facebook, over time, increasingly became in their efforts to grow beyond their core purpose.

For Facebook, this tendency to default back to the core group is actually good news in a way, since those people are the core of your social life, next to which all the movie trailers, news articles, professional nature photographs, and celebrity PR statements are but window dressing.  Owning these core contacts means people can sample other social media flavors, but will almost always come back to the Big Blue Mothership.  This isn’t to say Facebook couldn’t lose this battle, but in all honesty no serious challenger has clearly emerged in the more than a decade of their existence.  Every other social network except YouTube (which for many users is just a video source or service) merely nibbles around the edges of Facebook’s user base, serving specific needs and niches but not challenging their dominance of the social graph.

This is the curse and also the challenge of Facebook: without somehow changing the basic math of 1500+ Status Updates Per Day, Reduced to ~300 by Algorithms, per Facebook user, of which the average person will in reality see only a handful, the News Feed remains a finite marketing resource, and these latest algorithm update makes that eyeball space even more precious.  Facebook may considerably expand their eyeball space through acquisitions like Instagram and WhatsApp, or through home grown efforts like Messenger, but the News Feed is for all intents and purposes already fully grown.  This must be accepted provisionally, as Facebook may well find the magic formula to get users to double, triple, septuple their time and engagement in the News Feed, but there is no indication as yet that their primary growth in the future will come in this area.  Their user base may continue to grow in total numbers, but new users will still be exposed to the same number of News Feed items on average, and most will not be spending 100% of their time in the News Feed.

While it may not be as sexy to speak of extracting more value from the same product without opening some startup-like area for exponential growth at the same time, I would argue this is exactly what Facebook intends with these updates, the extraction of incrementally greater value from the News Feed.  If I’m right, then they are finally beginning to concede that their fundamental currency of value is still in connecting their users with the people they care most about.  Seeing more Status Updates from Friends and Family means more engagement with the service, which means more opportunities to show advertisements.  For brands, however, this means fewer possible ‘Slots’ in the News Feed.

This will hit organic reach hardest, of course. but paid advertising may not be a solution either: again, unless the basic math changes, Facebook will be forced to show relatively few News Feed ads to its users to avoid drowning out the updates they most want to be shown.  Consequently, the cost of these ads will increase over time, with deeper pocketed brands edging smaller players out.  Strategically targeted campaigns may help smaller players survive in the new reality, but a certain amount of consolidation behind big spenders is as inevitable for Facebook as it has been in other dominant media markets.

This should serve as a wake-up call for marketers who believe that social media in general, and Facebook in particular, is the Shangrila towards which all their efforts and budgets should be devoted: social media is supposed to be social!  I don’t mean by this that social media is all about getting fans to ‘engage with the brand’; that goal serves the interests of Executives and Investors, but in reality ignores the most important aspect of social engagement, which is the engagement taking place organically between real users.  Social advertising is thus most effective when it achieves ‘Inception’, embedding itself naturally into the flow of interaction rather than crying out to become the focus of attention.  The term ‘Share Worthy’ may be overused to the point of becoming cliché, but is nonetheless the ideal goal to pursue.

If the logistics of engaging users in the ‘Long Conversation’ of social media sounds daunting, then let me assure you: there is marketing life beyond Facebook.  Print Marketing, TV, Radio, Public Relations, Email and Text Marketing, Customer Loyalty Programs, Coupons (including online coupons, discounts, and promotions), and just making Share Worthy content are all ways to market your business without needing a team of Social Media Specialists to develop, implement, and analyze.  Many of these may even have a far higher return for your efforts than Paid Social Advertising or trying to build a large organic and engaged following (whom, as Facebook has taught us, you may not even be able to reach once you’ve built it).

I love technology and how it changes our lives. There's something almost spiritual about how new technologies connect and empower us. And it's really cool, too.

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