6 months ago I met with the Head of Digital at a major movie studio.
He was recounting a meeting with Sheryl Sandberg at Facebook in which he explained that they didn't need Facebook advertising.
They had already built such massive audiences around their movie brands and their characters that all they had to do was coordinate posts across these to reach and saturate their audience on Facebook.
It was an owned media channel so they didn't need for it to be paid.
That's part of what made Facebook such an appetizing choice, and brands flocked to leverage it to communicate with their customers.
But, Now Facebook Wants It's Piece of Your Pie
News reports have been surfacing that Facebook is testing updates that would make your Fan Page posts seen by even less people, unless of course you pay their advertising fees to boost the reach of sponsored posts.
Last year, there was a lot of fan fare made out of the algorithm change that reduces it from 12% on average to 6%. It meant that if you had 100 followers, the average post would be seen by only 6 people instead of 12. That doesn't seem like a lot. But it's about to get worse. A lot worse.
Recent reports are stipulating that a brand page's organic reach is going to drop even further from 6% to 1-2%. Now you really have to pay to reach your own "Owned" audience.
On one hand, we all knew Facebook would become an advertising medium.
Free services almost always end up charging brands to reach the audiences they aggregate.
But at the same time, brands and media outlets are fuming.
They have effectively paid and invested heavily in building an audience that they then have to pay again to send messaging to - effectively they feel Facebook is double dipping.
What Does This Mean For Social Media Advertising?
The question is what is a fair compromise and frankly, I don't have a good model for saying whether 12%, 6%, 2% or 1% is fair.
In the end, Facebook will determine what's fair by maximizing revenue - making sure there is enough return for people to keep investing en masse and then making the paid rates manageable enough that there is a positive ROI.
In the meantime, what it means for brands is that they should be cautious of audiences they don't control. Email is still great.
There is no middle man and it's still the number one rated marketing channel in terms of ROI, returning $38 for every $1 spent.
Organic search and your content footprint continue to deliver incremental value over time.
That's why content marketing is so crucial. You should continue to build your Facebook audience organically, but it is time to reconsider the value of a Like. Is it worth the cost-per-acquisition plus the cost in reaching them? Time to update that marketing ROI spreadsheet.
I do believe Facebook advertising does provide better audience targeting (geographic, demographic, retargeting, etc.) and in many cases is extremely cost-effective.
A Monetization Guide for Other Social Media Channels
A fellow marketer said to me, that's why Instagram and Twitter is great. You can still message for free. To that I respond, it's only a matter of time.
Facebook bought Instagram and will run the same playbook, and Twitter's Dick Costolo and Adam Bain inevitably will as well. They are running the same playbook.
So think about what you own in marketing. What you really own. Otherwise, you might be betrothed to a third party who owns your audience.
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