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Facebook, Inc. (FB) Exec Explains Decline in Organic Reach

June 5, 2014 4:50 PM EDT Send to a Friend

The following was posted to Facebook, Inc. (Nasdaq: FB) business blog by Ads product Marketing team lead, Brian Boland, earlier during Thursday's trading session:

Over the past few months, I’ve read articles and answered questions from many people who are concerned about declines in organic reach for their Facebook Pages. Organic reach refers to how many people you can reach for free on Facebook by posting to your Page. My colleagues and I at Facebook understand that this has been a pain point for many businesses, and we’re committed to helping you understand what’s driving this change so your business can succeed on Facebook. To that end, today I’d like to answer some questions we’ve been hearing.
Why is organic reach declining?
There are two main reasons.
The first reason involves a simple fact: More and more content is being created and shared every day. You’ve probably felt this change yourself. Just a few years ago, sharing important moments and experiences, articles you’ve read, and photos and videos of your loved ones was a relatively labor-intensive process. Today, thanks to devices like smartphones, many people can share this content with just a few swipes of the finger or taps of a button.
There is now far more content being made than there is time to absorb it. On average, there are 1,500 stories that could appear in a person’s News Feed each time they log onto Facebook. For people with lots of friends and Page likes, as many as 15,000 potential stories could appear any time they log on.
As a result, competition in News Feed — the place on Facebook where people view content from their family and friends, as well as businesses — is increasing, and it’s becoming harder for any story to gain exposure in News Feed. In addition to the growth in content, people are also liking more Pages. Facebook’s director of product management for News Feed told TechCrunch this April the total number of Pages liked by the typical Facebook user grew more than 50% last year. With each new Page like, competition in News Feed increases even further.
The second reason involves how News Feed works. Rather than showing people all possible content, News Feed is designed to show each person on Facebook the content that’s most relevant to them. Of the 1,500+ stories a person might see whenever they log onto Facebook, News Feed displays approximately 300. To choose which stories to show, News Feed ranks each possible story (from more to less important) by looking at thousands of factors relative to each person.
Over the past year, we’ve made some key changes to improve how News Feed chooses content:
As a result of these changes, News Feed is becoming more engaging, even as the amount of content being shared on Facebook continues to grow.
Why not just show everything — every piece of content from every friend and Page — and let people decide what they want to see?
Several other online feed platforms display all content in real time. But the real-time approach has limitations. People only have so much time to consume stories, and people often miss content that isn’t toward the top when they log on. This means they often do not see the content that’s most valuable to them.
In our tests, we’ve always found that the News Feed ranking system offers people a better, more engaging experience on Facebook. Additionally, given the amount of content in the average News Feed, using a real-time system for content would actually cause Pages’ organic reach to decrease further.
Is organic reach dropping because Facebook is trying to make more money?
No. Our goal is always to provide the best experience for the people that use Facebook. We believe that delivering the best experiences for people also benefits the businesses that use Facebook. If people are more active and engaged with stories that appear in News Feed, they are also more likely to be active and engaged with content from businesses.
Is Facebook the only marketing platform that’s seen declines in organic reach?
Many large marketing platforms have seen declines in organic reach. Online search engines, for instance, provided a great deal of free traffic to businesses and websites when they initially launched. People and businesses flocked to these platforms, and as the services grew there was more competition to rank highly in search results. Because the search engines had to work much harder to surface the most relevant and useful content, businesses eventually saw diminished organic reach.
While many platforms experience a change in organic reach, some are more transparent about these changes than others. Facebook has always valued clear, detailed, actionable reports that help businesses see what’s happening with their content. And over time we will continue to expand and improve our already strong reporting tools.
Ok, there’s more content now. But what’s the value of having more people like my Page? I paid good money for my fans on Facebook, and now I can’t reach as many of them.
Fans absolutely have value.
  • Fans make your ads more effective. When an ad has social context — in other words, when a person sees their friend likes your business — your ads drive, on average, 50% more recall and 35% higher online sales lift.
  • Fans also make the ads you run on Facebook more efficient in our ads auction. Ads with social context are a signal of positive quality of the ad, and lead to better auction prices.
  • You can use insights about your fans — like where they live, and their likes and interests — to inform decisions about reaching your current and prospective customers
  • Fans can give your business credibility
Fans may represent your best customers, but it’s important to note that they don’t represent all of your customers or potential customers. For example, if your auto dealership has 5,000 fans, those fans represent only a fraction of the people that matter to your business. Fans can help you achieve your business objectives on Facebook, but having fans should not be thought of as an end unto itself.
So, how should I use Facebook for my business?
Organic content still has value on Facebook, and Pages that publish great content — content that teaches people something, entertains them, makes them think, or in some other way adds value to their lives — can still reach people in News Feed. However, anticipating organic reach can be unpredictable, and having a piece of content “go viral” rarely corresponds to a business’s core goals. Your business will see much greater value if you use Facebook to achieve specific business objectives, like driving in-store sales or boosting app downloads.
Like TV, search, newspapers, radio and virtually every other marketing platform, Facebook is far more effective when businesses use paid media to help meet their goals. Your business won’t always appear on the first page of a search result unless you’re paying to be part of that space. Similarly, paid media on Facebook allows businesses to reach broader audiences more predictably, and with much greater accuracy than organic content.
Can businesses succeed on Facebook with decreased organic reach?
Of course. Here are some businesses — big and small — that have seen strong results by using Facebook to reach beyond their fans:
  • Rice Creek Family Dentistry wanted to grow its client base to support a second location and increase appointments among existing patients. The practice now runs ads in News Feed linking patients to an easy-to-use appointment app.
  • Karaoke Heroes, a superhero-themed karaoke bar, uses its Page regularly to interact with customers, while also using Facebook Ads to show people when their friends have attended events at the bar
  • Cadbury saw business results that rivaled TV for efficiency by focusing on reaching 16-24-year-olds in News Feed
  • Salesforce initially viewed Facebook as a way to engage with existing customers, until using Facebook Ads to drive high-quality and cost-effective leads, cutting its cost-per-lead goal by more than 50%
You can visit our Success Stories section to see many more businesses that are growing with Facebook.
How do I know things won’t keep changing?
We'll always innovate on behalf of the people who use Facebook. And we must be more transparent with and helpful to the businesses that market on Facebook. We’re working hard to improve our communications about upcoming product changes. For example, in April we let you know about how right column ads will be changing to increase engagement and to make it easier for businesses to create these ads. We're committed to helping your business grow and making sure you get the most from your investment in Facebook.
Please let us know what you think and if you have more questions in the comments. Sincere thanks for working with us.




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