New Facebook Rules Will Sting Entrepreneurs
online.wsj.com
online.wsj.com
This ongoing "crack down" on company pages doesn't just "sting entrepreneurs" it is day by day making Facebook less useful to me. Now our karate dojo needs to take out an ad to let us know it is kata week?
I think this is one of the weaknesses that may allow a competitor to eventually pry me away from Facebook; let me control what I want to see.
Facebook is double dipping. It's charging customers to acquire the likes and then charging them again to communicate with those customers.
With email, you pay once to acquire the customer and then you can email them all you like until they unsubscribe.
Except being flagged as spam kinda sucks.
The promotions tab in gmail basically a page 4 of google search. How convenient that a recent "Google Cloud Platform" advert hit my inbox and not the promotions tab...
I can't say I agree there. It used to be, but not now.
The signal-to-noise ratio for mail is very wrong for many people especially those who don't know any better and give out their address to every web form that asks for it. Spam protection has too many false positives when you ramp it up to the point of bringing that significantly down.
For a relatively technical audience RSS is probably the way to go, but for the karate school example that isn't going to fly as you'll need to get people "get into something new" to get their updates so just a basic web page is the most reliable thing (though that has less "push" than the other options as people have to remember to go look).
Facebook used to be a good compromise. Changes over the recent times and those that are planned are changing that.
My mum for instance will absolutely at least see, if not open and reply to, anything that hits her inbox.
These people also actively teach spam filters that they like the email you or I would consider spam. Think "Fwd: Re: Re: Fwd: Fwd: Re: Re: Look at this slideshow somebody made 10 years ago"
And the more I observe people, the more I see that every demographic out there religiously checks their email semi-regularly while everything on Facebook, Twitter and the like goes mostly ignored and/or filtered out so they can't see it. Email is the last bastion of "User actually sees your stuff". The only more reliable way of reaching people than email is sending them an SMS.
Anecdata: I run an email list with 50% average open rate.
Although, as another commenter said, email ultimately is the best communication channel.
This is a business, email happens to be free, but that doesn't mean people will read it, etc. It could well be that it's more profitable to pay Facebook than to use email, similarly to how buying the most expensive location for your shop can be more profitable than the cheapest location. God forbid, you try to open a business on land that is 'free'.
Fundamentally the people in the article are getting more than 50% of their business from Facebook, it's clearly a valuable service.
Why continue to follow them at all?
How about letting people see the ads from corporations/business they choose to follow, but prevent them from sharing those ads with their own friends? If you are interested in Nike shoes, more power to you, but I really, really don't want to hear about it.
like = show me everything this page posts is a broken paradigm.
IMO, they just let people make friends with pages in addition to likes. Have a big old "unfriend" button next to every page post to encourage a small friend list.
I think Facebook are looking at their median users liked pages. The ratio of "your daughter's karate school" to "random brand that posted a funny picture" is totally out of kilter. Posting everything to their timeline would drown out the people. They also have very little confidence in letting people control their own experience. In fairness, their median user is far less sophisticated than Twitter's.
Also, Facebook is very ambient. I am a very lightweight FB user. But, if I log in it doesn't feel like some app I registered on and abandoned. It's full of stuff from people I know. The baseline experience for a thoughtless user like me is pretty good.
But I agree in general, there are pages that people want to hear from. These are not likely to be the pages that appear in their timeline. The paradigm sucks.
I don't do that business any more, but I really feel for these small business people who, in most cases, are struggling to get by, and who need support, not abuse from a faceless, greedy corporation.
I've also come to accept and even appreciate that access to users is something worth paying for. Getting users is hard. Damn hard. Sometimes that access is a rev share and sometimes it's an advertising fee. That's fine. A mere 15 years ago you couldn't pay that fee to access a user pool that large if you wanted to.
Having a higher-than-ideal concentration of referral channels is not in and of itself a bad thing if you truly understand those channels. For example, a business that derives the majority of its customer referrals from paid search doesn't necessarily have a valid reason to diversify if it has the ROI equation down and understands and manages the associated risks.
The real problem with social media channels like Facebook is that many folks have been treating them (and investing in them) as if they were "owned media" when they never have been and never will be. These people are just figuring out that these channels fall under the categories of "earned media" and "paid media" now that Facebook et. al. are turning the screws. The true tragedy of this is that many of these unsophisticated marketers will have little to nothing to show for their social investments when all is said and done. They've been spending gobs of time and money building up their social profiles and will now have to pay even more in perpetuity to use them going forward.
What kind of sector/business are you thinking about?
From what I can tell, a sizable number of the folks who have been running around treating Facebook Pages as owned media probably don't even know what "owned media" is.
There's a very simple formula, and that is to humanise your business. Put a face/person to it so to speak. Then, the people who 'like' the business page, will get decent, curated content that they like (otherwise, they wouldn't 'like' the page). Rinse, repeat several times a week and you do get a very good following and interaction.
Sadly, the article (in my experience) is right, organic is no longer a thing -- you really have to 'boost' a post for it to be seen by a good number of people (or just get really lucky). This was not the case about a year ago -- you'd get a decent amount of 'reach' and interactions with said post. It just simply doesn't happen now for the majority of pages as Facebook is trying to goad people into paying for each post.
"Fairness" aside, be thankful in this instance that you are getting advance notice. I wouldn't assume that you will always be as lucky in the future.
Apart from direct return traffic I'm having trouble thinking what source could quality as being entirely controlled by a business.
If you want to reach people reliably, build a funnel that you control. Facebook/google/service X can all be valuable components of this funnel, but none of them should be the foundation.
What she should do now is get as many email addresses as possible from her existing customers and likers of her page, and have an e-zine or followup. This could be in conjunction with a blog. All stuff that is in her control and cannot so easily be pulled away.
Sure if it is sell, sell, sell people will hit the unsubscribe button.
If it is useful information, building a relationship with the reader, maybe the occasional reference to a sold product. Then this may work.
I get why facebook does it and I really can't blame them, but as a user I'm disappointed that I can't fiddle with the knobs and say "I really actually seriously like this business and want to see every update of theirs".
Until now, Facebook has operated this game on a standard F2P/freemium model, where skilled players can win with enough time commitment, and others can pay for shortcuts. But it turns out it's very hard to make F2P profitable, so now they want to move to a subscription/recurring revenue model. Sounds pretty familiar.
Perhaps I'm being overly meta but once you start looking for this pattern it crops up everywhere.
Any F2P game (that makes money) would make a fraction of what it actually does if they charged a flat retail price instead. Look at any F2P PC game like League of Legends, or mobile game like Clash of Clans, Candy Crush, etc. They are the top earners, but they earn even more than hit game franchises like Call of Duty.
Its the reason why F2P is becoming more prevalent.
But this is true of any industry ever, regardless of business model.
It's this kind of mismanagement of information I am subscribing to that will surely have people looking elsewhere.
Will Facebook soon filter out friend requests from people they don't see as being suitable?
Google+ had an attempt at this with giving a kind of ranking to certain circles depending on how noisy you want them to be. For me that is a much better approach as I am more involved in making such a choice. Though then comes the issue of giving the user too much work.
There are two sides to each coin I guess though in this case I do feel it is weighted more toward boosting FB's share price rather than truly looking out for their users.
If Facebook reduce the exposure your posts get to interested potential customers who have voluntarily liked your page, then those likes are worth less accordingly. You should be proportionately less willing to spend money promoting on Facebook as a result.
The only reason this sort of strategy works for Facebook is because too many people don't understand the basic economic model at work here and just throw more money at the auction hoping for the best, which is a race to the bottom that drives prices up for everyone and benefits no-one but Facebook.
Of course, Facebook do just about everything they can to obscure how much money you're actually paying and what you're really getting for it. Even with paid ads, the numbers they themselves report frequently appear contradictory unless you know exactly what they mean (and sometimes even then). Never trust these numbers. The only things that matter are how much money in total you spent on Facebook in a given period, and how much money people visiting from Facebook spent with you in turn.
The whole thing seems backwards to me. Facebook should make money from encouraging more interaction between its participants, not throttling the connection and charging for access.
I did some market research (in my country, Uruguay) on whether those kinds of businesses need a web page, Google ads, etc... and a Facebook page was MILES away their best bet in terms of ROI (much like the article says, but it's an understatement. Facebook is HUGE for small businesses).
It's a CMS which everybody knows how to use, user engagement is built-in, and there's no need to pay for admin.
My girlfriend likes nail polish, house decorations and other stuff, and she follows (and regularly buys from) several facebook pages, with posts like the ones described.
Facebook should monetize it (it's a huge untapped potential revenue source), but I think that, for these kind of businesses, some kind of "business Facebook" monthly payment or something would make a LOT more sense than the "promoted posts" model.
Maybe they don't care about 3rd world companies... the gemstone e-commerce site can afford it, but local struggling companies (and I'm talking under 1000 dollars per month in revenues) will never be able to.
FB is routinely hostile to its developers* killing off APIs and screwing around with the system. Microsoft, however, went through extreme measures to ensure backwards compatibility of applications between OS upgrades.
I suppose the difference is that Microsoft needed developers to create its network effect and grow their DOs/Windows monopoly. FB however needs users, not developers, to create its network effect and grow their monopoly.
This begs the question, why can FB be so hostile to their own users? I suppose the answer must be because their users don't leave FB the ecosystem.
*Obviously I'm using the term developer loosely here. The article isn't so much about developers as it is about business' building on FB, not unlike business' that built on MS.
The underlying idea is that focussed "minimalistic" apps are easier to use than kitchen sinks like Facebook, especially on mobile devices. On top of that mobile phones already come with some sort of "social network" build in, everyone has the telephone number of people and businesses that matter to them. So the attempt of most big web companies to provide people with a "web identity" is mostly misguided in this case. With the advent of ipv6, hopefully it will be come pointless on the web as well. The remainder of todays "Social networks" will then probably be just a very well organised and feature full address book on your personal devices.
I think that this stunt will increase Facebook's profits in the short term, mainly because of businesses that have already invested in building their pages. Longer term, however, we'll definitely see a shift to direct email marketing.
Once you have someone's email, you own that relationship and there's no gatekeeper to charge you for every interaction. As business start realizing valuing of the direct relationship, Facebook will start taking a hit, and rightfully so.
How's that supposed to work? Frankly, Facebook is a business that doesn't have your small business' interests at heart. Never has, never will. We've shouted from the roof-tops to never build solely on a third-party platform, and now non-tech businesses are going to learn that lesson. But, this is Facebook; they're not a benevolent entity, and they don't owe you or your business squat. Saying they're "double-dipping" or are a "scam" is ludicrous.
Very few companies behave this way (offer something for free then turn around one day and charge for it--drug dealers come to mind as the only business that does this). Those companies that do treat their customers to bait and switch tactics usually don't stick around for long. FB rightly so has lost the trust of their business users, so I hope this turns out badly for FB as I don't want this behaviour to become the norm for business.
Also, somewhat off-topic but
> drug dealers come to mind as the only business that does this
Drug dealers don't even do that themselves (product is too expensive and it takes while to become an addict, and even then it's not guaranteed revenue)!
I agree with you that it isn't surprising because it seems to be in FB's DNA to perform bait and switch like tactics (privacy policies come to mind as well). I wonder if that DNA spreads to their business internals (e.g. treatment of staff, inter-departmental agreements, etc)
That's right, nothing prevents current small businesses to post a last one paid facebook post telling the followers : "Subscribe to our mailing list here to get the exclusive offers"
But the key problems could be :
1 - People prefer browsing on Facebook than on their email client
2 - As a small business owner, creating posts on Facebook is easy, whereas creating nice emails that looks good isn't as easy. Getting feedback on these offers (Facebook Likes+Comments vs. nothing) is also a main problem for email marketing
They're Facebook's customers. That's a simple one. Does this situation suck? You betcha, my own mother is going to be hit hard by this, but on the other hand Facebook doesn't owe you anything, it's their platform (which I have a large dislike for).
The problem is that any platform that a business could use to reach their customers where they hang-out will basically require a social network, a utility for the regular user to give them a reason to be there. Businesses marketing to them costs money everywhere else, so it makes sense that that would be the way of earning revenue the utility would target.
Basically, they may have gathered the likes, but the reason they can is because Facebook exists and makes itself useful for non-marketing reasons, for regular users. If a business wants to market to the users on there, then it makes sense they have to pay for it, in my opinion.
As we all know it is risky to pitch too much of your businesses future on someone elses platform, especially one in which you don't pay for and have no formal business arrangement.
Check this out: https://www.youtube.com/watch?v=oVfHeWTKjag#t=3m10s
Unless something has dramatically changed since that video was created 9 months ago, the situation is pretty grim.
The businesses that sell products that need careful research before buying (cars, phones, houses, wedding dresses, etc) benefit from Facebook strictly because of its high search engine rankings. It is much easier to make a fb page that ranks well in search engines than it is to make a website that is on the first page.
As an effect is the fact that business owners believe that their customers come from fb (because that's what they see in their analytics), when they actually come from Google, via Facebook.
What's more interesting to observe is that Facebook's strategy has a fundamental in-built conflict of interest. That is the interest of selling advertising, and the interest of showing the user what they want to see. They have to toe this line very carefully because it will be so easy for them to lose users if they show them too much crap they don't want to see. But at the same time, it's always been Facebook's culture to push the envelope, and they are in desperate need to increase monetization to justify their valuation.
I don't envy the decisions facing Facebook right now.
Isn't this the same problem radio and television face?
Remember, small to mid sized advertisers make up roughly 55% of US ad spending [1], so if Facebook wants to fulfill its mission, it can't just churn and burn these little guys and hope that they come back wallets open. There are such a dazzling array of options that aren't Facebook that it isn't as if they're the only guys in town.
FB should understand that advertisers could, for the most part, care less if a giant fireball hit Facebook's offices and the company disappeared tomorrow. There are tons of perfectly serviceable replacements for, users, the people who pay for the social network, and investors looking for better opportunities.
[1]http://kantarmedia.us/press/kantar-media-reports-us-advertis...
That being said, if you're so reliant on Facebook for your advertising moreso than other channels then you need to reevaluate your marketing plan and diversify.
If Facebook becomes less valuable to me as a website operator then I have less incentive to keep any Facebook integration on my site, and if I remove that then they lose the insight into my visitors that this currently affords them.
That wouldn't bode well for their idea of selling ads based around users' off-site activity, would it?
http://www.theatlantic.com/technology/archive/2014/08/advert...
basically an anti-net neutrality approach to communication.
obvioulsy 2 sides, but still...seems manipulative ate best
but somebody has to pay the piper to pump that stock up
The way adwords worked is that they put tools out there where advertisers can try X, and see what happens. If X works, they can try to do more of it. if not they can try something else. X can be the keywords you target, the ads you write, the bids you set, the landing page you use and a whole bunch for other settings. Over time advertisers got good at this. They got more out ads, bid against each other and the price shot up. The process took years and a qanta of advertising is still getting more expensive. The intelligence is mostly on the advertising side. Adwords is a fairly dumb toolset. The skill and experience of the advertiser can make a big difference to the ROI. The average skill level is pretty high in competitive markets.
They tried a bunch of push-button methods. They would have their "expert team" set up your initial campaigns or propose changes. I tried these when they were first launch with disastrous results. They also had more automated turn key management tools. They're also not as good as a decent ad manager. It's hard to beat a person for creativity and intelligence. Who would have thought.
FB adopted this model but their platform is very different. They added a bunch of hair at a rapid clip and adapted the adwords concept in confusing and inconsistent ways. The FB platform is more of a giant pile of tools, with 9 3/5 spanners and a hammer that can be used for a drill. This might be a little unfair. The gist of search advertising is pretty straightforward. Show this result to people in this area searching for this thing. FB is a lot more complicated.
Anyway… They built up an ad platform that is enormous and opportunity loaded for a lot of kinds of marketing for which adwords doesn't work. Are you looking for pre school enrollments? Promoting a comedy club? Daily dela site? Even the traditional orange juice and washing powder companies can fool themselves into thinking they are "engaging" customers. Anyway, FB advertising works really well for all sort of things. The demand is there.
The platform grew fast and no one really understand it very well. It changes fast and its confusing with multiple ways offing everything and lots of options you didn't know exist. There are lots of black boxes of the adwords adrank variety, but too many to easily understand.
But, underlying it all it seems pretty obvious that Facebook want to make their system much "smarter" than adwords. In an ideal world, you tel it what your goals are and the system chooses who to advertise to, how, when and how. More turnkey, less control in advertisers hands. Batteries include. Pick your metaphor.
Back to the topic at hand…
I think that changing how the platform works fundamentally is allowed in the FB culture in a way that is on the extreme end of the spectrum. The way I see most software is that a software metaphor is defined by what it does. If making something a "header" in a word processor make the text big & bold that's what "header" means. If "follow" in twitter means send that person a message and show me all his future posts, that's what follow means. I will adjust my behavior accordingly. If I'm following too many people, I need to unfollow some. If twitter thinks I'm seeing too many tweets, they can't just select tweets to show me. That changes the meaning of follow. To keep the metaphor intact, they should make the unfollow button bigger, or even suggest I unfollow some people.
Facebook would just look at the problem of too many posts, many commercial posts or similar and show fewer. Maybe they internally rank your friends and liked pages based on some black box algorithm and decide how many to show. Stuff like that. They're fine with this approach even though it means the definition of friend/like/etc. radically several times.
In FBs defense they serve one of the least savvy median user of any software in existence. I don't think that's an exaggeration. FB was a lot of people's first app.
In any case, I think this is just a manifestation of that core FB characteristic. Stuff changes in unusual ways. They have problems. Eg users who like hundreds of pages that would take over their stream. EG. my noisier friends drown out the occasional posters. The "normal" way of dealing with these things is to give user tools, controls or encourage them to use them. Unlike some pages. Curate your fiends list. The FB way is to decide themselves what stuff to show.
It's possible that FB is being motivated by "how to increase revenue" for these decisions, but I doubt it. It would be short cited and it can be explained otherwise.