Facebook: “Stop Chasing Organic Distribution!”

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Last December, when I posted an article that questioned the value of marketing on Facebook, I received a lot of feedback. Given the death of EdgeRank, the mandated Pay to Play model, the reduced engagement on Facebook Pages, it had appeared Facebook had done an about-face and left Marketers in the lurch, leaving us to question Facebook’s value. ­

Facebook, What Have you done for Me Lately?

For Marketers like me who, at one time or another, spent significant media dollars to acquire Page “Likes”, we were angered that organic reach was declining on client Pages. Trying to build any visibility for Page content required increasing advertising spend on Facebook. The scenario we were accustomed to did not require us to buy continued engagement on top of buying the “attention”. After all, keeping a customer has always been much more inexpensive than acquiring a customer, right? So, should this go for Facebook LIKES.

I’ve heard from other Marketers, on the other side of the fence, who swear by the value of Facebook advertising and it’s impact on business goals. I knew these colleagues to have fatter budgets and much more leeway for performance testing. Not everyone has the luxury of this however.

Here’s the reality: Unless you have thousands of dollars to spend on media, given the challenges we mentioned earlier, can Facebook really provide the marketer the value required to validate the ad spend?

It was time to confront the Platform. I set up a session to get clarity on this and other challenges.

Organic Reach: The Elephant in the Room

This was the biggest bone of contention going into this session. Facebook was transparent when they said, “Organic distribution is non-existent”. He noted that the Newsfeed is the prized property. Any chance of visibility is driven from the Newsfeed.

The average FB login frequency is 14 times the usage on mobile. The machine-learning algorithm customizes the Newsfeed to each user, by all counts almost 1.4 billion different newsfeeds. Today Facebook can determine up to 1500 choices of content that appears on a user’s newsfeed.

The reality is that the increased content density on Newsfeed will not slow down.

Facebook warns to STOP chasing the organic opportunities on Facebook. It doesn’t make sense today.

What is the Value of the Facebook Page these Days?

The Page is the identity of the brand. It has and continues to be the place to tell the brand story. There is no reason to abandon it, however Facebook notes that if the marketer is relying on the Facebook Page for users to discover you, it won’t happen.

According to Facebook, organic reach averages 10% of 100,000 people. Yes you will have to pay for the initial LIKE, however there are three variables that drive to visibility:

  1. Posts
  2. Friends take action
  3. Ads

All these are newsfeed-driven. So how do I get your story on Newsfeed?

Yes, you’ll need to pay for Ads but your buy can be efficient.

Currently there is a bidding system on Newsfeed. However, increased likes and engagement will drive down the auction price. In essence, the social context is highly correlated with higher auction efficiency, hence will get you better newsfeed distribution.

Ultimately, the math will determine at what level of efficiency will mean a reasonable payoff from the initial acquisition. What the ultimate cost to acquire and retain a Facebook user is up to question.

Brand Drives Conversions?

Where Likes and Engagement were measures of some “seeming” success, these KPIs were not drivers of the business goals. Those things that business cares about remain: sales conversion, market share.

Social media is no longer a separate channel. Facebook has pivoted to help drive to these business objectives. They are currently working with Nielsen to verify and provide proper attribution. These vanity metrics need to be put in their place (hopefully in a cellar, underneath a carpet and 10 stacks of boxes). Facebook echoed

If you can’t prove value with Facebook then do not spend money with us.

The biggest gap from the advent of online has been proper attribution to between online behavior and sales lift (offline). According to Facebook, Nielsen confirmed there is Zero-correlation between Click-through-rate (CTR) and Sales Lift. In other words, Online-activity does NOT drive off-line behavior.

I found this amusing considering that Nielsen has traditionally pedalled the notion of impression volume and frequency, which have been correlated with consumer spend. These are archaic And while I am hesitant that Reach and Frequency are the right KPIs to properly attribute to spend going forward in this increasingly digital landscape, Facebook admits that Brand IS the mechanism that touches all areas of the purchase funnel and Facebook needs to get this right. Those KPIs need to change and we have to find better metrics that can provide more direct attribution compared to the directional insights that Reach and Frequency have provided.

The Game is Mobile

Facebook has pivoted mostly to a mobile strategy. Facebook contends that where people have traditionally pegged TV as the first screen, this will inevitably shift to Mobile. This is where all brands need to be. The ALS Bucket Challenge revealed that 65% of all views was on mobile.

Search will be much stronger.

When Bing was kicked to the curb, I questioned whether FB was developing it’s own search capabilities. They intimated that Search is an important part of Facebook’s future. While search is intent-based, Google will own the searches closest to the bottom of the purchase funnel. However, Facebook will drive brand search across the other stages of the same funnel.

The Power of Facebook Data for Targeting

This was, by far, my favorite part of the session. ArCompany is a data-driven company, so we understand the richness of the data that Facebook provides and the potential it has to target the right audiences with the right messages.

Facebook indicated that for the first time we have “People” on the platform, not “users”. People have identity. Users do not.

If you haven’t used Facebook for Advertising here are some pretty amazing features:

Custom Audiences:

Facebook allows companies to do a CRM identity match on Facebook by simple email. Brands can upload their databases to Facebook for the purpose of deepening their CRM database. Now with access to more individual data points, brands can build test messaging to audiences directed to owned channels (website).

Here’s another salient point about the Facebook audience: Rarely do Facebook users logout of Facebook. This allows Facebook to properly retarget them with relevant messages by “knowing” which sites they’ve gone to outside of the Facebook platform.

This also includes a brand’s Facebook Page: By pixeling parts of the website properties you can target specific messages to people on Facebook based on where specifically they’ve travelled on your site. The opportunities for A/B testing to optimize messaging, and creative can be done rather efficiently.

Look-Alike Audiences:

By leveraging the social graph, Facebook can match the email database to those users who have commonalities ie geography, behavior, traits and seek build a relevant prospect list.  This not only enriches your individual email list, it also also allows you to amass the right audiences for your product or service. And while direct marketing, in my day, sought to find those audiences based on very limited data points like third party demographic variables, now a combination of interests, geography, education, etc can define a target audience with much more precision.

Conclusion:

Yes, we get it. At some point Facebook has to monetize. It is a media platform afterall and while we may grumble about the things it hasn’t done, the reality is that Facebook is the most inexpensive platform from which to advertise. It’s also data rich and provides some tremendous opportunities for advertisers to augment their user bases and optimize messaging strategies.

I would like to continue to explore FB strategies with respect to Artifical Intelligence, Groups and WhatsApp but that will be another session for another time.

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