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Culture: You’ve got it all wrong and we NEED to talk about it!

Culture: You’ve got it all wrong and we NEED to talk about it!

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Will Facebook’s New Algorithm Impact Your Online Advertising?

By now, you’ve probably already read the stories about Facebook changing its business model for content. To clarify, Facebook, with more than 2 billion monthly users, is changing its News Feed algorithm to focus more on personal content, emphasizing shared posts between friends and family, while demoting news. This change will come largely at the expense of content provided by businesses and brands.

So, how will this affect online advertisers in the automotive retail space? Before I answer, I’d like to give you my understanding of why this change happened.

Quality Beats Quantity

Put simply, it’s been quite a year of public challenges for the social networking platform. According to post-election analyses, the platform was inundated in 2016 with false news stories and videos planted to sway opinion. In the past, Facebook relied on users to report and flag bogus content. Clearly, that process was flawed and unreliable.

In its search to make Facebook more meaningful, the company also learned that passive content, such as watching videos or looking at stuff to buy or reading too much global news, has a negative impact on people. Whereas, active content, such as exchanging stories and photos with family members, creates a positive effect.

As a result, Facebook chose to demote organic content and messaging in its News Feed and return to their roots of keeping families and friends connected.

From a business perspective, I suspect Facebook’s change could also represent more of a head ‘em off at the pass strategy. The social media platform would rather self-regulate than be regulated by government fiat.

There you have it, my abbreviated explanation of why Facebook is changing its News Feed algorithm.

Bad News Begets Good News

So, what does this new direction mean to your online advertising commitments? For starters, go ahead and exhale. It’s not as bad as you think, especially if your ad budget already includes paid Facebook ads. Organic media content, on the other hand, will suffer because of the new algorithm. Such content will decrease.

The good news, as I see it, is Facebook’s new business model creates an opportunity for dealers who wish to continue with – or embark on -- paid online advertising. Yes, we will have more battles for paid content and ad rates will go up in the long run.

Okay, where’s the good news in all of this?

Facebook is the second largest social engagement platform available, surpassed in activity only by Google. Although second, Facebook advertising is still huge: companies spent more than $9 billion on Facebook ads in the second quarter of 2017 alone.

Yet, auto dealers typically only spend about 5% of their ad budget on Facebook. An average dealer, for instance, could be spending $40,000 in Google Adwords and only $2,000 in Facebook advertising each month.

That’s in spite of nearly all social media marketers worldwide believing Facebook produces the best ROI (study cited by eMarketer.com). And therein lies the opportunity.

Don’t be Late to the Party

Mark Zuckerberg said, “I expect the time people spend on Facebook and some measures of engagement will go down. But I also expect the time you do spend on Facebook will be more valuable.”

The word “valuable” is the key, in my opinion. That’s why I think this algorithm change will ultimately drive more eyeballs to Facebook; people will appreciate the meaningful interactions they’re engaged in. There will be fewer distractions from organic content. Dealers who are out there working the platform first and best will reap most of the rewards.

Here at Client Command, we’re strictly on the paid side of the advertising continuum, so the new Facebook algorithm won’t have any immediate impact on our clients. As always, we will be tracking metrics, such as cost per engagement and cost per visitor, to make sure your cost per lead has not gone up substantially.

With free exposure going away, it’s time to separate the professionals from the pretenders.

 

 

Kelly Kleinman

I've run a few dozen FB campaigns, a few with wild success (for the client), and agree it's the best social media platform for items in a certain price range. Impulse items with really low COGs for example.  If I'm a dealer I'm thinking branding more than sales for FB just based on my experience.  

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