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Gini Dietrich

Facebook Promoted Posts Remove the Level Playing Field

By: Gini Dietrich | November 5, 2012 | 
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The awesome thing about the web and social media, in particular, is it levels the playing field. No longer do you need millions of dollars to spend on PR firms and ad agencies in order to build your brand and reputation among the masses.

Today all you need is a good writer, a self-hosted website and/or blog, and organically grown social networks. With those three things, you suddenly are competing with the big boys for reputation and credibility. You’re seen as a thought leader in your industry. You’re creating kinship among your prospects. And you’re selling in a way that has never before been possible.

All of the tools are free so it’s a really low barrier to entry. And it works.

The big social networks continue to run their platforms free to us because they consider us the product, not the user.

We’re the Product

Take Google for example. They have been successful because they keep introducing free features – analytics, blogging, RSS feeds, Google+, Docs, Hangouts, and more. Their thinking is of course, if they offer really good free features, we’ll continue using them, which boosts their pageviews and drives advertising.

Advertisers are their users. We are the product. And it works really well for them. They do, after all, have a market cap of $25o billion.

So why is it Facebook is trying to squeeze more money out of its users? Why not look at us as Google does…as the product?

Sure, I understand they’re now a public company and they have to find new ways to make money, but there are several business models before it lighting the path.

And yet.

If your business has a Facebook page, you’ve likely seen a decrease in “likes” and interaction. We have one client who went from 10,300 interactions per day to less than 3,000. Overnight.

Promoted Posts

Why? They aren’t using Promoted Posts to increase their visibility. In other words, they’re not paying Facebook to show their updates to the more than 63,000 people who have voluntarily liked their page and opted in to have them in their stream.

Only 30 percent of those people are seeing their updates. The other 70 percent? They have to set aside a budget to pay to promote their posts to those people.

Yes, those people who’ve already said, “Hey Facebook! We want updates from this company.”

If they were to pay for it, they’d need a budget of $228,800 to reach the people they were reaching for free before the social network’s IPO earlier this spring.

Small Business Implication

I run a small business in Chicago. We update our Facebook page 20-25 times per week. We have just a tad more than 3,500 fans so we wouldn’t be charged as much per post as our client. But we’d still have to spend in the $25,000-$30,000 range to reach the people who have voluntarily liked our page.

So I would have to decide if it’s more important to reach all 3,500 of our fans or pay for half a person to help service clients. I think you know which way I’d lean.

Suddenly the playing field is no longer level. We’re both the product and the user at Facebook.

Seems like a pretty big conflict of interest.

A version of this first appeared in my Crain’s Chicago Business weekly column.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

116 comments
ltcassociates
ltcassociates

Hi Gini,

 

You'll get no argument from me over the "promoted post", but I might quibble over a couple other items from your otherwise excellent article.

 

First, I don't think it's accurate to say, "Google's been successful because they keep introducing free features." Why not? Let's do a quick thought experiment: if Google charged users directly (say $0.99/month) while Bing and Yahoo remained free (ie ad-supported), how long do you think folks would stick around? Fact is, it's competition that keeps Google free (ie ad-supported), they have no other choice. (If you want to know why they've become a world-dominator, look to copyright-violation and a look-the-other-way attitude toward piracy... but that's a story for another blog).

 

Second, in your example of the business with 63,000 "likes" who chose not to use "promoted posts", I suspect (although you may know better) that one of their reasons for eschewing the paid posts was inside knowledge that many of those inflated likes were gamed (ie fakes). Why pay to reach fake customers? Unless that's a major, national brand, that's an awful lot of likes...("likes", we've learned, are indicative of almost nothing.)

 

I'm not surprised Facebook has turned to "promoted posts" as a way of raising revenue-- its targeted ads have been under assault almost since the beginning. Ever since its Instagram purchase I've argued that the site is basically nothing more than a photo-sharing and music-oriented site for teens-- NOT a serious place to conduct business. That's why I continue to remain skeptical about investing our resources there.

 

Best,

Stephen

ginidietrich
ginidietrich

@Tehcobra I agree it does encourage good posting strategies. But it also can be VERY expensive for small businesses.

ginidietrich
ginidietrich

@Tehcobra Well, thanks! I guess our experience with it doesn't count @markwschaefer

iancleary
iancleary

Hi Gini,  interesting post.  One issue is that most brands are sending updates to fans that are not interesting so filtering out some of this content is actually useful.   It's hard to figure out the best solution but at the end of the day Facebook look at this as a big revenue opportunity and as share price goes down I think the percentage of fans that see the content without paying will also go down.

 

What about the future when they say that your Facebook page becomes a destination site like a website so no updates goes to a newsfeed?  So the only way of getting an update onto a newsfeed is paying.....  Not beyond the realms of possibility.

mlaffs
mlaffs

@elissapr @ginidietrich @spinsucks I saw @gordonwithers post something similar

ginidietrich
ginidietrich

@sradick You know what they say about great minds

pwfitz5
pwfitz5

Gini, nice post, good insight. This has been on my mind lately because of the number of political "promoted posts".  While it has helped my manage my "friends" list, some of the posts are driven from family members with differing views, so while those cannot be eliminated, they still really P*&^ me off.  With this FB is trying to monetize the "Reach" the platform offers; as the political posts show though Reach without targeting is like Gin without Topics, it has little value.  Because I like my conservative uncle, and he likes conservative politics and politicians, my timeline is littered with promoted posts that really annoy me.  From the beginning FB has been capricious in their treatment of the community of users (the product) and gotten away relatively unscathed. As a public company, it needs to operate differently; the question is can they?

Justjeffpls
Justjeffpls

@ginidietrich Between u n me, r u a democrat r a democrat?

TonyBennett
TonyBennett

My page interactions have still been increasing, but just as Jordan had his rules, superheroes gave theirs. Although, to be fair, my "increases" still don't match your clients reduced figures. Overall, your post is rather astute. It's a desperate moneygrab and will likely send many seeking respite w/ FB's biggest competitor(s).

LisaMarieMary
LisaMarieMary

Would be super interesting to get some "affected stats" from George Takei! 

 

Also, I'm thinking more and more that G+ and their business pages are sounding better and better! 

kmskala
kmskala

Unfortunately, in business there is no level playing field. Never has been; never will be. It's the same reason why Mom & Pop's Hot Dog Stand doesn't advertise during the Super Bowl.

 

Why should Facebook be any different? It's a free platform. They have the right to make money & I don't see it as a conflict of interest. It's about the economics.

 

The issue I have is with brands putting so many of their assets on Facebook & other third-party assets. If your business is suffering because of a change Facebook made, that's poor business. Nothing more; nothing less.

Ginny Soskey
Ginny Soskey

Gini, awesome awesome post! I've been mulling this issue over for a while and I agree with you--Facebook is shifting toward pay-to-play rather than organic, which has huge implications for small businesses.

 

I've been interested to see how PR/marketing/communication folks are responding to this change--some are pointing out how frustrating this while others are urging people to work harder/be more creative to get around this barrier. We'll see how people feel as Facebook's model evolves, but for the moment this is still a pretty even debate. Thanks for this awesome post! 

RebeccaTodd
RebeccaTodd

I've got it! G you need to invent your own social network. Like Livefyre, but with pictures of puppies. I have nothing insightful to add- the comments here really say it all. 

barrettrossie
barrettrossie

Gino, a quick review of the comments finds no one disputing your excellent point. When a large company has so few defenders, you have to wonder how long until they crash and burn. Hey, you ever thought about applying for a job ad CEO of struggling social media giant? Bet you'd get a few letters of recommendation...

ginidietrich
ginidietrich moderator

 @ltcassociates Hey Stephen! Thanks for the thoughtful response. 

 

I don't entirely agree with your assessment of Google. If they started charging us and Bing and Yahoo remained free, I don't think everyone would move simply because they've become more than search for us. They've become email and documents and storage and calendar and analytics and payment processing and more. And it's all free. They know, in order to keep charging advertisers out the wazoo, they need to keep offering us (the product) more things for free so we're so entwined in how we use them, we'll never leave. Of course, saying never is a generalization as any technology could go away, but I don't think we'd leave for Bing or Yahoo because neither offer the other suite of things we've become accustomed to using in our business and personal lives.

 

On the Facebook page, it is a major national brand and it's one most of probably "like." My point is that some of those likes probably are spam or robots, which Facebook is being proactive in deleting, but also that it's absurdly expensive to reach those people who have actively said, "I want to read your updates."

 

Take my business as an example. We have nearly 4,000 likes on our page. We did not pay for any of those. We have done nothing to promote the page (other than have it in the sidebar here). It has grown organically. If we were to pay to promote our posts, it could cost us upwards of $30,000. 

 

My point was that I could either pay an entry level person to join our team with that money or I could use it to promote our Facebook page to people who have already liked our page. I think you know which choice I'd make.

Suzi_C
Suzi_C

 @pwfitz5 It's not the thoughtful political posts that get me. (I'm guilty of those. I was an aspiring political campaign manager at one point in my life. I got better.) What gets me are the posts fraught with hyperbole and emotional blackmail and the FRIGGIN MEMES that make me want to scream. GOOD NEWS:  I see that Google created an extension that replaces political posts with pictures of kittens. Enjoy.  

 https://chrome.google.com/webstore/detail/unpoliticme/ecnbjncmlfdfdpnnbloliloehpcmjglg

joshchandler
joshchandler

 @katskrieger I think the second point on the list in the article you link to "Concentrate on making your website more advocacy- and engagement-oriented. " is the most important alternate marketing method to Facebook!

HeatherTweedy
HeatherTweedy

 @kmskala First off, I liked your post about this a few days ago on The Electric Waffle.

 

I don't think that the Super Bowl analogy is entirely accurate.  In that situation, the network has created/purchased the content that brings in viewers that the advertisers pay for.  Here FB is essentially asking the content creator to pay.  That's a bit like asking the producers of The Mentalist to pay CBS for the right to reach viewers that only tuned in to watch the show.  People are only on Facebook because of the wealth of content that is there and Facebook isn't creating that content.  Asking business content creators (and in some cases personal people) to promote a post is a little ridiculous.  

 

Of course, no business should put all of their eggs in one SM basket, but FB is still the behemoth and FB often has an out-sized portion of followers even for diversified companies.  Whether Facebook has the right to do it, it's still pretty inconvenient.  

 

Plus, let's be honest, people want information to come to them. Facebook used to help companies push information consistently into one central place.  No user is going to reach out to hundreds of brands on their own turf, but the same user will happily let a couple hundred send information into a feed they are already looking at.. A strong online hub will definitely increase conversions and sales, but needs those outer spokes to bring people in and Facebook has been the best hub for many brands for awhile.  

 

ginidietrich
ginidietrich moderator

 @Ginny Soskey I definitely think organizations need to be more creative and valuable in their use of social media AND I think Facebook needs to figure out if they're content creators are users or the product. If they're the user, then by all means, charge us for using the platform, but don't also expect that we're also going to create content for you. 

ginidietrich
ginidietrich moderator

 @barrettrossie I don't think Zuckerberg is a bad CEO. He knows what he knows and he brings in experts for the stuff he doesn't know. That's a smart leader. But I also think he's crumbling to Wall Street pressure and going away from what it is he set out to do. The Crimson just posted their article online about thefacebook.com when it launched. It was pretty interesting to see he said he would never charge users to use the site. I think he'd like to stay that altruistic. Google has figured out how to make us the product; I don't understand why Facebook can't do the same.

ltcassociates
ltcassociates

 @ginidietrich  Hi Gini,

 

You'd already won me over with your Facebook math-- it just doesn't add up.

 

Back to Google: you make a sound case that by this point, the entirety of what they offer amounts to a "suite" with which we've become quite fond of, reliant upon, or plain used-to.  Other competitors may offer *better* products, but we'd have to acquire them scattershot, a la carte. That's a competitive advantage right there.

 

However, allow me to throw one more thought-experiment your way, just for kicks. Pandora and Spotify have both faced uphill battles in the "freemium" world getting free (ad-supported) customers to buy-up to the paid, subscription model where those companies can actually turn a profit. So let's ask of Google: would *they* be able to transition their users from the free (ad-supported) model to an ad-free, subscription model?

 

Would you pay to use an ad-free version of Google?

 

I suppose the answer is "no" for two reasons 1) we actually derive value from those ads and expect to find some of our search results in them, and 2) unlike Pandora and Spotify, Google is actually making a bloody mint on ad revenue (cause it doesn't have to pay royalties).

 

Well, that's how thought-experiments go.

 

But what about Twitter or Facebook? Would you pay to use an ad-free version of those properties?

RebeccaTodd
RebeccaTodd

 @ExtremelyAvg Me too! I need to think more, but really, LiveFyre is my favourite thing about "social". THIS is where I learn, connect, grow. Is this the future- more smaller networks based around actual commonalities? Rather than one monolith? Can I use some anthropological theory about societal collapse to support this notion? Where is my copy of A Short History Of Progress? Coffee?

 

ltcassociates
ltcassociates

 @ginidietrich Hi Gini,

 

All right, let's think about a Twitter or a Facebook for a moment... I feel like you're getting my mind charged up, and I like it : ) If I think of your comment as a Customer Feedback Form, here's what I've just learned:

 

1) My reticence to bombard you with ads and instead to keep them unobtrusive may backfire as a strategy. Why? Because the easier they are for you to tune out, the less likely you are to ever pay (Twitter or Facebook or whomever) to make them disappear.

 

2) My customer would pay for business tools which help her grow and expand... and I can create and develop these, but as soon as one of my competitors drops the price to FREE, I'm screwed.

 

(This phenomenon occurred in the music industry, and was followed by publishing, and decimated the ability of most artists to make a living wage.)

 

In other words, although you're willing to pay for valuable Hootsuite-like tools, it is also true that many similar tools exist for FREE which depress the ability of the market to invest R&D, then charge enough to recoup and profit. It takes just one to lower the cost to FREE to undermine the entire endeavor (after all, there's a not-insignificant minority online who don't believe in paying for anything...)

 

What were we talking about...? Ah yes, in my case, I would pay for Twitter, because I'm that kind of guy (I reward companies I use and like whenever there's a "pay as you wish" option), but given the choice, I'd leave Facebook in a heartbeat, since the Catfish comes for all of us in the end.

ginidietrich
ginidietrich moderator

 @ltcassociates OK...on Google. No, I probably wouldn't pay for an ad-free model because the ads don't interrupt my experience. I know not to click on the links in the light orange box at the top of search results or the ones in the right-hand sidebar. I barely see those anymore. 

 

The reason I pay for Spotify is the ads interrupted my experience. I'd be listening to my music and then I'd have to listen to an ad. That drove me nuts. So yeah, totally willing to pay for it to get rid of that interruption.

 

Same thing on Twitter and Facebook...the ads don't interrupt my experience (yet) so I'm not willing to pay for an ad-free model. BUT I would be willing to pay for some sort of subscription if they could help me filter and grow and create different and new conversations without my having to hustle on my own. We pay for Hootsuite because they give us data we wouldn't otherwise have.

 

What about you on Twitter and Facebook?

 

This is fun! You can come by and debate me any time. 

TonyBennett
TonyBennett

@ginidietrich @ExtremelyAvg @LisaMarieMary Not knocking George or anything, but I'm pretty sure he gets his funny pictures from Pinterest. They're just not as funny when I post them!

Trackbacks

  1. […] It’s pretty clear why Facebook has gone this route – with their recent IPO they are looking for ways to drive revenue. Although we can certainly talk about whether this was a bait and switch for brands or whether this move has demolished the level playing field for small businesses. […]

  2. […] asked if Facebook’s paid promotions were a good idea for business, while Gini noted that promoted posts might remove the level playing field of social […]

  3. […] penned a post about how Facebook seems to be unfairly squeezing money from us by forcing us to use paid promoted posts to reach people who are already following us. It’s a good point of course, but I fell off […]

  4. […] its News Feed algorithm so posts no longer reach the majority of fans. Recently, a blog post from Spin Sucks mentioned of the more than 63,000 people who have voluntarily liked their page and opted in to have […]

  5. […] message undesirable. With the requirement that they now pay to reach all of their own followers, Facebook pulled the rug out from under all of […]

  6. […] Your posts do not get seen by everyone. People are already inundated with posts from brands; why would they want to see yours? And recent changes have made organic in-network growth almost impossible. […]

  7. […] asked if Facebook’s paid promotions were a good idea for business, while Gini noted that promoted posts might remove the level playing field of social […]

  8. […] Your posts do not get seen by everyone. People are already inundated with posts from brands; why would they want to see yours? And recent changes have made organic in-network growth almost impossible. […]