Is Facebook now just “Pay for Display” for brands?

While Facebook’s news feed algorithms don’t generate quite the same level of interest and passion among digital marketers as Google’s SEO metrics, it doesn’t mean they’re any less deserving of our attention.

Yet it appears many brands still don’t properly understand how Facebook’s algorithms work. For example, many brands still believe that almost everything they post on their Facebook pages will be seen by their fans and followers. However, the reality couldn’t be any further from the truth.

Each day, the average Facebook user could be exposed to as many as 1,500 posts from friends and brands that they follow. But because of space, and to avoid clogging up a user’s news feed, Facebook will only display a limited number of these posts. Facebook therefore decides what posts to show users, and where, based on data on both the post and the user themselves.  As a result, very little of what a brand posts on Facebook these days will actually be seen by its followers.

Back in 2012 it was estimated that around 16% of a brand’s organic posts would reach users. By this year that estimate was down to 6%. And with Facebook set to apply yet another update to its news feed algorithm in early 2015, this level of organic reach is expected to fall even further. Strangely, the more fans a brand has, the less organic reach they appear to achieve.

Facebook reach for organic posts

As the above graph shows, the majority of posts from brands won’t ever be seen their fans and followers. So even if a brand has millions of fans, if its posts are not what Facebook’s algorithm considers “quality,” they may reach very few people.

But consistently producing high-quality content, which Facebook deems so good that it merits display on a user’s news feed, is easier said than done. Increasingly, if brands want people to see their content, they’ll have to pay for the privilege. “Pay for display” if you will.

In many ways, this is hardly surprising. Facebook is a huge publicly-listed business after all. And just like any business, it needs to turn a profit for its shareholders.

If brands willingly pay other mediums such as TV, radio, newspaper and websites to carry their messages, why should Facebook and social media in general be any different? Why should Facebook be expected to help businesses advertise for free?

The drive towards “pay for display” on Facebook is also due to competition and the success of Facebook itself. As more and more brands move onto Facebook each year, and more and more users “like” company pages, there is simply less space on the Facebook news feed to display content from them all. As such, those brands that pay for their content to be displayed will be given pride of place over everyone else in the Facebook “shop window”.

Nevertheless, it seems many brands have simply gotten too used to using Facebook as a free advertising tool. Even though Facebook has drastically changed the rules of the game, many still have their head stuck in the sand and have resorted to simply complaining, or continuing to post organic content in the mistaken belief (hope?) that it’ll be seen by enough people.

Facebook did recently update its account settings to allow people more control over what they see on their news feed. The update gives users insight into why certain posts are included and lets people filter posts from specific people and pages. It’s also allowed users easily change their news feed view between Top Stories (based on Facebook’s algorithm) and Most Recent. Nevertheless, like so many Facebook changes, it’s unlikely many users will be aware of this new update or how they can customise their news feeds.

In short, Facebook is still a great way to connect with your customers and market to them. But you’ll need to get out the company credit card and start spending big if you actually hope to be able to reach them all through Facebook in the future.

A history of Facebook's news feed algorithm

The future’s bright…the future’s #Twitter?

Although long considered the most important social media network, a new report from American investment bank Piper Jaffray shows that Facebook’s popularity is fading fast among the important teen market.

According to the bank’s 26th semi-annual market research report Taking Stock with Teens, Twitter has overtaken Facebook as the social media network that is most important to teenagers. 26% of respondents named Twitter as their “most important” social site while 23% said Facebook was most important to them, down from a high of 42% a year ago.

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Worldwide, Facebook claims to have over one billion users, dwarfing that of Twitter. In the all-important US market, Twitter had 49 million active users on average during the second quarter of this year. In comparison, Facebook had 198 million users on average in the same period. However, if the report from Piper Jaffray is to be believed, those figures could reverse dramatically over the coming years.

chart-of-the-day-facebook-and-twitter

Despite the growing popularity of Twitter, it remains a social media platform that a surprising number of people and businesses are uncomfortable with, at least for a slightly ‘older’ generation. Many people still don’t ‘get’ Twitter in the same way they understand and use other social networks such as Facebook and people tend to either love the site or not at all. However, the research from Piper Jaffray would appear to suggest that Twitter is a social platform that businesses can no longer afford to ignore.

Nevertheless, Twitter shouldn’t become too complacent either. The report also claims that Instagram has rocketed in popularity with teens. 23% said Facebook-owned Instagram was their No.1 choice, up from just 12% a year ago, suggesting Facebook was wise to acquire the site in 2012 as a backstop against losing younger users to competing, simpler networks.

Facebook is bad for you *Dislike*

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Facebook may be great at keeping people connected and form a vital part of businesses’ marketing strategy, but new research suggests it may not be quite so good for people’s health.

In a recent study, scientists from the University of Michigan in the United States found a clear correlation between the time people spent on Facebook and their unhappiness.

82 participants took part in the recent study and all had smartphones and a Facebook account. Over a two-week period the participants were monitored closely and asked questions by text message about how well they felt at various times of the day. They were also asked questions about how much time they’d spent on Facebook.

After analysing the results, the researchers found that levels of Facebook use correlated with a greater loss of wellbeing. In contrast, talking to friends on the phone or meeting them in person led to greater levels of happiness!

While social media has its benefits in that it allows friends and family members to keep in contact in ways that weren’t previously possible, psychologists and social commentators have long remarked on the negative influence it can also have on people’s health and social skills as they increasingly rely on virtual contact as opposed to real face-to-face communication. This study would seem to back up those fears.

And while social media remains the buzzword among marketers at the moment, business leaders have long complained about the lack of decent communication skills and literacy skills among younger graduates who have grown up on a communications diet of short ‘txts’, 140-character tweets and meaningless status updates.

So perhaps it’s time we finally put the smartphones down and started communicating with each other in person that little bit more… for the sake of our communications skills as well as our health!

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Think before you ‘like’

Facebook might know a little bit more about you than you think.

A recent study has shown that personal information such as a user’s sexuality and even their drug use can be correctly inferred by studying their ‘likes’ on Facebook.

The research from Cambridge University into 58,000 Facebook users in the United States found that personal and sometimes highly sensitive information about a person such as their race, sexual orientation, political views, drug taking habits and even their IQ could be correctly inferred by simply studying the pages that the person had ‘liked’ on Facebook – even if the user hadn’t chosen to publicly publicise that information.

After running Facebook ‘likes’ through a sophisticated algorithm, the researchers were able to tell with 88% accuracy whether a man was gay or straight for example. What’s important to note is that fewer than 5% of the gay men in the study had clicked obvious ‘likes’ such as gay marriage, so the researchers were able to tell a person’s sexuality through far less revealing ‘likes’ (such as the No H8 Campaign and Wicked the Musical for example).

In addition, 75% of the time the researchers could tell whether a Facebook user took illegal drugs and 95% of the time they could tell the person’s race. The researchers could even tell whether users’ parents had separated by the time they were 21 or not!

On the one hand, this could be positive news for Facebook users as it means Facebook should be able to target them with more relevant ads and news content in the future. On the other hand, it shows once more how dangerous the use of social media can often be from a basic privacy point of view.

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Who needs the internet for success anyway?

You can’t read their tweets, pin them on Pinterest, see them on Instagram, watch them on YouTube, or circle them on Google +.

They certainly don’t engage in any Pay Per Click advertising and you can’t even buy their products online. They do have a website (thank God!) but it’s basic and more interested in talking about ethical business standards than actually selling the company’s products.

So who are we talking about? A small local retailer probably springs to mind. However, the answer couldn’t be further from the truth.

The company in question is Primark (or Pennys as it’s known in Ireland) and the clothing retailer has just enjoyed another “outstanding performance” during the past few months, according to its owner Associated British Foods (ABF). It expects total sales to be up 23% in the six months to 2 March, while like-for-like sales – which strip out the effect of new store openings – are set to be 7% higher. And last year its sales jumped 15 percent to stg £3.5 billion pounds.

The chain has been expanding rapidly over the past few years too. It opened 19 new stores last year, taking its total to 257. Its expansion into Europe has seen it open new stores in Spain, Germany, Austria, Portugal, Belgium and the Netherlands to add to those it already operated in Ireland and the UK.

It is also faring much better than rival clothing retailers. Over the crucial Christmas trading period, like-for-like sales at Marks and Spencer fell by 1.8% for example. Meanwhile, the shares of ABF have surged 16 percent this year, beating H&M’s 4.3 percent gain and a decline of 1.7 percent at Zara’s Inditex.

What’s truly remarkable is that all of this success has been achieved without any type of explicit digital marketing strategy or social media engagement by the company whatsoever.

Yes, as already mentioned there is a website, but it’s ridiculously basic and doesn’t let you buy anything online. Primark does have a Twitter page but it’s a fan page run by lovers of the brand and not the company itself. It does have its own Facebook page but its 500,000 or so ‘likes’ pales in comparison to Zara which has over 16 million. As for Instagram, Google +, YouTube and Pinterest…forget about it. Primark probably doesn’t even know or care what those sites actually do. And it definitely doesn’t do PPC advertising or online banner ads either.

So… why the lack of online engagement?

Well, the lack of digital marketing hasn’t hurt the company so far. And as the old saying goes: if it ain’t broke then don’t fix it. And Primark has no plans to fix this anytime soon. It makes no apologies about its Web strategy and has no plans to add online sales to its site either.

Secondly, developing an online business isn’t easy or cheap, according to Mark Hudson, a partner in the retail practice at consultants PricewaterhouseCoopers. It requires a supply chain flexible enough to handle the demands of large flagship stores alongside small online orders, and smart enough to give timely, accurate information about whether an item is in stock or not. Processing an online order for clothing typically costs retailers between 5 and 15 euro so customers need to buy enough to offset that.

While Inditex is “extremely profitable online”, stores where customers don’t spend as much per visit, such as H&M, are less profitable, according to Credit Suisse retail analyst Simon Irwin. The average spend at Primark, home to thousands of products for less than 10 euro, is even lower than that at H&M.

Finally, while social media may work well as a channel of communication, a recent study from Forrester Research suggests it does almost nothing to drive sales. As a result, Primark might feel that the relentless focus by companies on social media and Web 2.0 technologies is unjustified.

Whatever your thoughts, the continued success of Primark and their unorthodox digital strategy in this post-internet era is fascinating. But should the company continue to do what it’s doing or will it succumb to the social media and digital marketing game eventually?

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Little Miss Hashtag

If ever proof were needed of the huge, if slightly worrying, influence which social media has on some people’s lives nowadays, then here it is!

A Twitter-loving couple have taken to Facebook (where else!) to announce that they have named their brand new daughter Hashtag.

Amazingly, this isn’t the first baby whose name has been taken from the social media field.

In February last year an Egyptian man named his daughter Facebook in celebration of the January 25 revolution in that country.

The social media platform, together with Twitter, was widely praised by Egyptians for their ability to mobilise protesters and oust dictator Hosni Mubarak from power.

So…what other social media names could we give children? Google +, Pinterest, Twitter, or LinkedIn perhaps?

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Is big business too social media shy when it comes to customer service?

New findings from Genesys Research shows that big businesses are still uneasy with embracing social media when it comes to customer service. For example, more than half (55%) of consumer-facing Fortune 500 businesses do not provide their Twitter ‘handles’ on the ‘Contact Us’ page of their websites, making it more difficult for customers to engage with them over social media networks.

Additionally, despite the fact that Facebook has 900 million users across the world, only half of these businesses (51 per cent) provide a link to their Facebook page on the “Contact Us” section of their company website.
 
Is this the right strategy for big companies to adopt, especially when you consider how public social media conversations can be? Are big companies right to be wary of allowing customers vent any of their problems and complaints through a social media forum? Or should big business simply accept the inevitable, embrace social media fully, and accept that it has to be a two-way conversation and that the pros outweigh the cons?
 
Regardless of the answer, this underlines the importance of companies having a detailed and well thought through online strategy in place before they decide to embrace social media as a channel of communication. However, as a new generation of consumers gets more and more used to communicating online, perhaps companies will have no choice but to embrace social media fully and take the good with the bad…