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April 30, 2014

For Businesses, Breaking Up with Facebook is Hard to Do

Credit: Matt Harnack / Facebook

Ever since social media burst onto the scene, the advertising world has been turned on its head. All of a sudden, businesses had the option to engage potential customers on their home turf and in a way that traditional advertising had never allowed. Hands down, one of the biggest (and easiest) ways businesses began using social media was to create a business page on Facebook and work tirelessly to get potential and existing customers to “like” their pages. Once won, new Facebook fans could be accessed easily through status updates and photo ops and all would be right with the world.

Then things started to change. Facebook, desperate for ways to monetize their colossal business model, created special advertising opportunities meant to help businesses reach more of their fans and even gain new ones. As a result, businesses felt that they were being forced to pay for ads that had previously been free. In the meantime, Facebook made more changes to its algorithm that made it increasingly difficult for paid ads to be seen by their target audience. Obviously, not everyone was happy with the changes.

Exhibit A: Web-based food ordering service, Eat24.

Facebook fail leads to epic breakup

After months of paying for Facebook ads that only a small percentage of their fans would ever see, Eat24 finally snapped and chose to delete their Facebook page. This meant losing the 70,000 fans they had earned up to that point. But they didn’t go quietly. In fact, they wrote a hilarious “breakup letter” meant to add humor to a situation that obviously angered them. A few excerpts:

“When we first met, you made us feel special. We’d tell you a super funny joke about Sriracha and you’d tell all our friends and then everyone would laugh together. But now? Now you want us to give you money if we want to talk to our friends. Now when we show you a photo of a taco wrapped with bacon, you’re all like “PROMOTE THIS POST! GET MORE FRIENDS!” instead of just liking us for who we are. That’s hella messed up.”

“Even if we could figure out your mysterious, all-knowing algorithm, it’s constantly changing, so what works today might not work tomorrow. Posting something that most of our friends see is like biting into a burrito and actually getting all seven layers…never gonna happen.”

“But the bigger picture issue is that we can’t trust you. You lied to us and said you were a social network but you’re totally not a social network. At least not anymore… Why should we have to wade through a dozen promoted posts about how to lose belly fat (are you trying to tell us something?) and requests for Candy Crush (NO! Just no.) and suggesting we like our arch nemesis’ page (seriously, WTF) before we can finally find the perfect Doge meme? It really seems like you’ve lost your way and have become nothing more than an ad platform.”

Facebook ads: Paying more for less

Eat24’s open letter to Facebook is hilarious in its own right, but it also started a nationwide conversation about Facebook ads and what they were starting to become. It also touched a nerve with businesses that were already frustrated with the performance of the ads, leading to more complaints and bad press.

And it makes sense. According to an April 4 analysis in Business Insider, no matter how large an advertiser is or how much they are willing to pay, the average Facebook ad will only be seen by about 6.5 percent of their fans as of March 2014. And that’s down from just a few years ago, when the average ad would show up on an average of 16 percent of news feeds. So, what happened?

What do recent Facebook changes really mean for business?

A recent article in TechCrunch points to increased competition, confusing algorithms and filtered feeds as part of the problem. But the main problem is this: There is only so much room on an individual’s Facebook feed on any given day, and more and more advertisers are competing to be there. Facebook’s algorithms, however complicated, must weed out certain ads so that others can appear. And therein lies the problem. When businesses pay to have their ads show up, and said ads only reach a small percentage of their fans, they start to question their participation in such a program.

On the other hand, it has been shown that Facebook tends to favor ads that get the most “likes,” comments, and shares, likely because the whole purpose of social media is to entertain and captivate. It makes sense. Create an advertisement that your fans share and comment on, and the likelihood of more people seeing it increases. Likewise, create something boring, and it might just fade away — even if you paid.

What this means for businesses who advertise on Facebook is that they need to create ads that entertain, captivate and engage their fans or run the risk of not reaching enough fans to make a meaningful impact. That might mean trying new types of advertisements, creating interactive programs, thinking outside-of-the-box or participating in giveaways big enough to lure users in.

So, what do the recent Facebook changes really mean for businesses? In a nutshell, try to be the most interesting business in the world.


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Holly Johnson writes about a variety of topics, including finance, careers and business. She blogs at ClubThrifty.com and contributes to several websites, including MBAPrograms.org.

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