On March 1st, Facebook (FB) rolled out the biggest change in several years. This isn’t just a change to the interface; it’s a fundamental change in their advertising strategy. This also changes how companies use FB to reach their target audience. This also has implications for the future of social media advertising.
Up to now, FB has tried to be an advertising platform. Companies placed ads in FB to reach their target audience. But FB performs poorly compared to Google, Bing, or Yahoo. If you show 100 ads in Google (i.e., 100 impressions), you could count on average to get two clicks (a 2% click-through, or CTR). In FB, you need to show 4,000 impressions to get two clicks. That’s a 0.00005% CTR. The CPLs (cost-per-lead) was correspondingly poor: FB CPLs were generally 10X more expensive than Google Adwords CPLs. FB doesn’t work for advertising.
The same with ecommerce. FB also tried to be an ecommerce platform, where companies build online stores in their FB pages so customers could buy products. A year ago, many of the large brands had ecommerce sites within FB. These are all gone now. The revenues don’t justify the expense. FB doesn’t work for ecommerce.
Up to now, there were fan pages in FB, which were mini-websites for companies. Companies could create a landing page, where not-yet-fans arrived and were encouraged to click Like (get a discount, a gift, a coupon, etc.). These were called “fan gates” (the fan had to enter via a gate). FB also allowed companies to create additional pages as tabs, where companies could place games, widgets, videos, photos, contests, polls, etc. A number of companies sprung up to create software for those tabs.
This was all great fun, but it didn’t produce sales for companies nor advertising revenue for FB. Companies and social media strategists tried many things but these didn’t work. FB’s IPO is coming up, which means FB has to show an actual revenue model that also works. So it was time for Plan B.
In short, FB abandoned the advertising model. FB has switched to an entirely new model.
FB noticed that people like to follow their favorite companies. Many people also interact with those companies: post messages, add photos and videos, etc. In return, a number of companies interacted with their fans: they wrote postings, they replied to people, and so on. FB’s new strategy builds on this model of interaction based on messaging.
Gone: Fan Pages and Tabs
- FB removed fan pages. Tens of thousands of fan gates, built at a cost of millions of dollars, are now irrelevant.
- Tabs: FB lowered the significance of tabs. Few people clicked on those tabs anyway. There still are tabs, but they don’t matter. This means no more polls, contests, games, etc. Buddy Media’s tools are now irrelevant. The vertical list of tabs is now a row of three boxes which looks like decoration. Most fans will not know they can click on these. (You can change the order of the boxes. Click Edit and then the pencil icon at the top of each box. You can swap its place with other boxes.)
- Photos and videos also fall off the table. Few people clicked on those.
The New FB World: Messaging
FB changed the fan page layout to match the Timeline layout. The goal is encourage companies to post messages and interact with their fans with postings. This is important: You post messages. Your messages get pushed into your fans’ news feed. They comment on your message. You encourage engagement with messages. You pay to get your message distributed. Here are the new tools for this:
- “Pin a Story”: This lets you move a message to the top of your page for seven days. After that, it goes back to messages. You can use this to feature new products, sales, events, etc.
- Highlight a Message: You can expand a message to fill the width of the screen so it stands out better.
- Private Messaging: Your fans can send private messages to you. Customer support issues can be handled quietly. To do this, go to Manage | Edit Page | Turn on “Messages:Show “Message” button
- Message Moderation: You can turn on moderation, which means a fan’s postings have to be approved by you in order to appear. This will stop negative comments. However, it will also stop the conversation when fans post and it doesn’t appear. To do this, go to Manage | Edit Page | Turn on “Post Visibility” (“Show only posts by…”)
- If you want, scroll to the bottom of your Timeline and write about your company’s beginnings. You can set this back to 1800.
- Write up to three lines of text, but not more. Data shows that two or three lines of text works best.
- Add photos or video. Data shows you’ll get 2X response.
- On average, your posting will be seen by 16% of your fans. If you have 100,000 fans, only 16,000 will actually see your posting. FB’s algorithm shows your message only to fans who interacted with you or are likely to want to see your message. It won’t annoy your other 84,000 fans.
- To reach your remaining fans, you can use “Reach Generator” (i.e., you pay to use Reach Generator.) If you have a large fan base and you have significant spend, you can pay so your message will go out to 50% of your fans weekly and 75% of your fans monthly.
Reach Generator has a downside. Many companies have paid hackers to add tens of thousands (or millions) of fake accounts in order to inflate the company’s reputation. As much as 80% of fans of the major GOP candidates are fake. If a company bought a million fake accounts, they will now have to pay to send messages to those fake accounts just to reach the few real accounts.
There is also “Facebook Premium”, which allows you place your messages as ads on the side of your fans’ page. FB promises a 10X response improvement.
Modify Your Fan Page’s Layout
About the only thing that you can do in terms of layout is the banner image at the top of the page. You can add a large image at the top of the page (see e.g., facebook.com/harley-davidson). You can also turn this off (as I did at my page facebook.com/andreas.work)
You can also add your logo, your face, or your cat.
- The banner image (also called the Cover image) should be 851×315 pixels
- The banner image is NOT allowed to have text. This means No call-to-action, offers, ads, information, nor text. I suppose FB teams in India will review banners and block the offenders. It’s interesting that they’ll block banners with text. They are pushing companies to use messaging.
- The portrait photo can be 180×180 pixels or less.
Change/Update the name of your page
By now, many companies want to rename their pages. Use the following URL to request a name change: https://www.facebook.com/help/contact_us.php?id=262629790471076
The Log Out Splash Screen
You can also pay to have a splash image appear when people log out of FB. However, most people don’t log out; they simple shut down the browser page. I doubt this will have any impact.
Rapture Day: March 31st
Companies have until March 31st to switch over. Until then, the old display is still active. At the end of March, all fan pages will be switched over.
- The change is radical. FB has abandoned pay-per-click advertising and switched to interaction based on messages. This makes sense: Social media is engagement, so the new model works with that. And FB advertising didn’t work anyway.
- Companies and social media experts are going to have to change directions (and horses). It’s no longer about polls, games, contests, and other gimmicks. It’s no longer how to get the most fans. It now becomes a matter of writing messages that engage.
- It’s a good question as to what this means for other social media companies. Their results were also equally bad. Will they continue on a ad-based model? Or switch to FB’s new strategy?
- And how will the users react? FB is going to post many more company messages in their feed.
Don’t abandon FB. Millward Brown found that Facebook was the most efficient form of media at driving desired brand perceptions and overall brand equity when compared to other online, out-of-home and television advertising. It’s just not clear on the best way to do this.
Finally, this is the perfect example for why you should not use FB as your main digital platform. FB, which is run by kids, owns your company’s presence in FB and they can do whatever they like and they won’t even notify you. You spend hundreds of thousands of dollars, hire people, etc., and then FB changes everything. Build your own website. Don’t rely on FB.