Have You Heard? Declining Organic Reach Means Facebook is Pay-to-Play

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It seems that many brands, at least in Singapore and Malaysia, didn’t receive the reachpocalypse memo. They seem very surprised when we tell them that ‘Hey, you need to pay for ads on Facebook now if you want to get any meaningful reach.’

Well, we can’t blame them though. It does seem counter-intuitive. I mean, if you can create engaging posts on Facebook, shouldn’t the reward be free impressions?

Nope, not at all.

Facebook Newsfeed Algorithm Filters Content

Facebook, Twitter and now Instagram display content according to an algorithm. Every time you log into Facebook, you have on average 1,500 potential posts on your Newsfeed. Facebook’s algorithm sorts that out for you and displays around 300.

How do they do that? No one knows for sure but there are over 100,000 weights that go into that particular algorithm (that was formerly called EdgeRank).

After an initial period where Facebook convinced brands to buy fans, the social media giant has since changed its tune.

Since late 2013, Facebook has been cutting reach for brands and urging them to buy ads instead. Fan acquisition, they said, should only be seen as a tool to make your paid advertising more effective (i.e. cheaper if you advertise to your own fans). According to Facebook, you acquire fans to make your future Facebook ads work better.

Then in April 2015 came another round of reducing reach as Facebook announced that they will be emphasising friends over brands.

A year later in April 2016, they started a ‘Feed Quality Programme’ and reached out to publishers and started to display posts that it says its users are more engaged with.

That didn’t last too long, though. In June 2016, they announced that they would prioritise posts from friends and family over publishers.

Organic Facebook Reach Down to 1%-6%

Ogilvy’s research shows that the organic reach for brands with more than 500,000 likes barely scratched 6% during the research period. Our own experience as a social media agency in both Malaysia and Singapore shows that a more realistic expectation of organic reach is 1%-3%.

If you’re a big brand with over 500,000 fans, expect your reach to go as low as 1%.

If you’re a big brand with 1,000,000 fans, that means that each post will reach about 10,000 fans. That’s not too bad. But if you’re a small restaurant with 3,000 fans? Expect to reach 30 – 180 fans. And let’s not forget that just because you ‘reached’ them, doesn’t mean that they actually read the post.

And marketers are mad. When Facebook first started marketing to brands, these same brands gave Facebook free advertising by asking their audiences to ‘Like their Page’ on their (multi-million dollar) advertisements. Some have even gone to extent of ‘breaking up’ with Facebook.

“Facebook has a reputation of twisting your arm and threatening your first born.” James Del, Gawker

So why is Facebook doing this?

Facebook Declining Organic Reach

It’s not a coincidence that the decline in organic reach was followed by a corresponding increase in Facebook’s share price. As organic reach dropped from 12% to 1%-6%, Facebook’s stock price increased from US$50 to nearly US$70. This translates to billions of dollars in market capitalisation.

As of Q1 2017, Facebook’s ad revenue stands at US$8.03 billion, up from US5.38 billion in the same period the previous year. Facebook’s global ad revenue is expected to total US36.29 billion, making it the second largest advertiser behind Google.

Recommendations

Get ready to pay to play. While all this talk of a reachpocalype sounds ominous, we would do well to remember that Facebook is a business after all. We shouldn’t expect them to give us access to the 1.94 billion for free, always. If it is such an important channel for your business, then it is worth setting aside some marketing budget for ads. I do find it ironic that a lot of the people complaining about paying $2,000 in Facebook ads a month are the same ones who don’t think twice about spending half a million on a billboard.

Get much, much better at creating engaging, shareable Facebook content. While this doesn’t completely negate the need for boosting your content, you need to start prioritising creating content that is innately shareable in order to boost your organic Facebook reach. [link to motivations for sharing]

Multiple social media channels. Social networks are primarily channels for discovery. Diversify your discovery channels and don’t only depend on Facebook. Start experimenting with LinkedIn, Instagram, Twitter and gang today. Be prepared to shift your focus (and marketing budget) if the need arises.

Don’t build your house on rented land. While Facebook can and should be an important channel, it should not be your main channel. That’s what your website is for. We always recommend that clients view their website as their main marketing asset. You will always have complete control over it and no one is going to throttle your website traffic.

Build your email list. Most companies in Singapore and Malaysia do not know how to properly utilise email as a marketing channel. Say email marketing, and they still think of the spammy (and illegal) spray and pray approach. But according to McKinsey, the ROI from email marketing is 40 times that of social media (organic search marketing still rules the roost though)

email more roi than social media

How is your company dealing with the decline in Facebook organic reach? Share with us in the comments below.

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Fairuze Shahari

Fairuze Shahari is a principal consultant at CloudRock. When he's not furiously downing G&T's, Fairuze Shahari writes for CloudRock, an inbound marketing agency.