More, more, more. More money, more control, more rules. Facebook’s insatiable appetite for more may eventually leave it with none. For brands, this now means less exposure, less organic growth, less content ownership, and lower levels of engagement.
In a nutshell, Facebook is free because it’s an advertising platform. You, the user, are the product. What you do, talk about, like, and visit is all recorded and nicely packaged up for advertisers. These advertisers make up the collective engine that keeps Facebook running.
They’re so valuable to Facebook…or depending on how you look at it, you’re so valuable to Facebook, that they’re willing to make $19 billion acquisitions of messaging apps with a mere $300 million in annual revenue. A big number, but a smidgeon of the acquisition price. So why pay up? Because 450 million users, 70% of whom are daily users, provide a stupid, stoopid, stupendous amount of data, all of which, Facebook is banking on, advertisers want to get their hands on.
Or, another semi-popular theory, maybe when the President of your country knows you’re not “cool” anymore, it’s just appealing to invest in remaining relevant.
Probably more about the advertising dollars. Maybe a little bit of both. Need to remain cool to have advertisers.
As it turns out, though, the advertisers powering Facebook aren’t all smiles. Quite the opposite, they feel bullied, neglected. Facebook’s greedy tendency to squeeze every last dollar out of advertisers is driving them away from the platform in “dramatic numbers,” according to an article by Adweek’s Michelle Castillo.
Now a warning shot from Forrester analyst Nate Elliott: “Brands don’t own what happens on Facebook, and as organic reach has been absolutely eviscerated, they remain aware of that.”
Brands are increasingly moving away from counting solely on social media platforms to spread their content and taking it upon themselves, in spaces they own. Their own blogs. Their own sites.
Brooks Thomas, AT&T’s director of digital and social media, still values the platform as a CRM tool but sees it as a “rented” space and is cautious about putting too much stock in Facebook.
“Brands will always have more control over owned spaces than rented ones. By and large, I view owned spaces as the farm and rented spaces as the market where you sell the crops—you can personalize your stall, but you can’t design the market,” Thomas explains.
A market where you sell crops…I wonder if that’s how Facebook sees itself.
So, what should they do? What would you do? Back off of these brands and restore some of their reach, or keep pressing them until they snap and leave?