Facebook’s News Feed Paradox
Facebook’s latest News Feed update isn’t about improving user experience; it’s about dominating a $89B industry
Last Friday, Facebook announced a major update to its algorithm in a post called Reducing Overly Promotional Page Posts in News Feed. “Pages that post promotional creative should expect their organic distribution to fall significantly,” the company wrote. The change, according to Facebook VP Brian Boland, was not motivated by an interest to increase ad revenue, but rather a desire to “show people the things they want to see.”
Friday’s announcement calls out three behaviors that qualify a post as “overly-promotional:”
- Posts that solely push people to buy a product or install an app
- Posts that push people to enter promotions and sweepstakes with no real context
- Posts that reuse the exact same content from ads
The last one is most telling. With this, Facebook is giving brands notice: “no more freebies.” This change will likely have the largest impact on small and medium-sized business (SMBs), who have previously relied on Facebook as a free marketing platform.
According to an April 2014 study by research firm BIA/Kelsey, more than $89 billion is spent annually on advertising by SMBs. According to an October report by the firm, social advertising accounts for 21.4% of SMB’s total media budgets (more than any other media category). That figure has more than doubled since 2012. Given that rapid growth, it’s no surprise Facebook sees a massive opportunity to capitalize on small business advertisers.
The social network likely has more leverage with small businesses than any other advertisers. These SMBs don’t have the brand awareness of larger corporations, nor do they have the budgets for a diversified marketing spend. By curtailing the reach of these SMB’s organic marketing, Facebook is aiming to pick off the low-hanging fruit.
I have little doubt this update will make Facebook a ton of money. And surely, no one will complain about seeing less spammy posts, right?
Maybe.
Friday’s update is just the latest in a series of controversial initiatives to rid the News Feed of “low quality” posts. Quality (as subjective as it may be) has been predefined by Facebook engineers, leading many critics to wonder, “who’s in charge here?”
Thus far, Facebook has been quick to publicly pass that responsibility to its users. But with each update, the real answer is getting more and more clear. Who’s in charge? Facebook’s bottom line.
