FACEBOOK NEWS FEED UPDATE

How Facebook is improving user experience and increasing its revenue.

IN A NUTSHELL On April 21, Facebook announced three updates to its News Feed:

1.  The rule preventing users from seeing multiple posts from the same source at the same time has been removed.

2.  Content from users’ best friends or pages (the ones they interact with most frequently) will appear higher in their news feed.

3.  Stories about friends ‘liking’ or commenting on content will appear lower.

These updates are designed to improve user experience but for brands it means that Facebook keeps building on its ownership of the relationship between clients and brands – transforming Facebook into a paid channel.

In the meantime on April 22, the company shared its Q1 results:

Adweek

FACEBOOK KEEPS TRANSFORMING INTO A PAID CHANNEL

One update after the other, Facebook continues to transform into a paid channel for bigger advertisers.

A study conducted by Locowise using 5,000 pages, has shown that organic reach is as low as 2.27% for FB pages with 1 million+ likes. However, it is up to 9.62% for FB pages with 50,000-100,000 likes.

The reports also states that “only 7% of pages are using ads but this number goes up to 15% for larger pages.” This means that bigger pages will have to invest in a media budget to boost growth and engagement.

“If you are running a very large page, you will be reaching a very low number of your page likes organically. These numbers seem especially low when

considering the high organic numbers on Instagram.” Locowise

FACEBOOK KEEPS TRANSFORMING INTO A PAID CHANNEL

“[…] organic impressions were down 35% year-over-year, while paid impressions rose 8% over the same time period.”

Adweek

BRANDS REACT TO CHANGES BY INCREASING FREQUENCY

Most brands seem to have increased their posting frequency, as we see an overall increase of 31% year-over-year of the volume of Facebook posts by brands.

Editorial and rich content get more interactions: photos and videos get the highest engagement on average.

Facebook’s ads are the most efficient ways to reach your fans and a new audience. You could gain an advantage over your competitors by boosting your posts.

“Overall Facebook posting by brands was up 31 percent in the first quarter of 2015 compared with the year-ago period.”

Adobe

GENERATING ENGAGEMENT: RELEVANCY AND MEDIA BUY Brands have two solutions to increase engagement of their fan base: relevancy and media buy.

How to improve relevancy? On Facebook, relevancy is based on the number of interactions a post will get in a limited timeframe. For instance, a post that gets 20 likes in the first 3 seconds will gain more organic reach than a post with 20 likes in the first minute.

What about editorial content? Since reach depends on people’s interaction with content, brands must develop more and more stories and editorial content to engage with their targets.

Some brands switch their entire marketing towards producing that type of content. For example: Patagonia with its Worn Wear campaign has created rich content based on strong values. Chivas talks about evolution of ice with its fan base.

Patagonia always has a few different “stories” being shared on its website, newsletter and Facebook.

Very little is being said about the product. It’s more about how inspiring and amazing people use it.

With the video “The evolution of Ice” , Chivas got about 10 times the regular engagement they have

on their regular posts.

GENERATING ENGAGEMENT: RELEVANCY AND MEDIA BUY Brands have two solutions to increase engagement with their fan base: relevancy and media buy.

How to adapt media budget

1.  Targeting and local activation: Media on Facebook let advertisers choose very specific targeting options which are worth spending money on as they are targeting a highly qualified audience.

2.  Clear value to the user: If the value is clear to the user (promotions, gifts, limited time offers, etc.), interactions will be higher and the price per action lower.

3.  Clear call to actions with a direct benefit (conversion) for the brand: The conversion has a clear monetary value and can be directly compared with other channels (newsletter sign up, form completion, freemium sign up, etc.)

Leveraging the quality of your fan base Facebook’s ad format for boost posts is priced according to the expected reach. This means that a smaller but better qualified fan base is a much better asset than a huge but non qualified fan base. There is no value in paying to reach a fan base that isn’t relevant for the brand.

How does Facebook as a channel contribute to your digital ecosystem?

The real question is “How does Facebook contribute to your clients’ journey?”

Is Facebook a constant connection with your audience based on highly qualitative content, as seen with Patagonia which promotes its products while creating a huge brand connection? Or do you use Facebook to add people to your newsletter, which is the second source of revenue from your e-commerce?

Either way, if the quality of your fans is high, Facebook stays an amazing acquisition and engagement channel but you should expect prices to keep raising in the next few years.