5 thoughts on the Facebook news feed update

Earlier this month Facebook announced an update to their news feed under the moniker of ‘Bringing people closer together’. In practice this means that Facebook will be increasing the visibility of posts that ‘spark conversations and meaningful interactions between people’. What does this mean for brands? Are there any other factors at play in this decision? Here are five thoughts on this update:

Organic reach for brands gets tougher

If it was already difficult to reach your audience via organic activity on Facebook, it’s about to get even tougher. The update states that Facebook will ‘…show less public content, including videos and other posts from publishers or businesses’. In truth, organic reach had already reached exceedingly low levels over the last year or two, so the impact of this is not game changing, but nevertheless brands will see a downturn.

FUBI

So should brands give up on posting content to their Facebook pages altogether? No. But, they are under more pressure to produce content that is engaging, as unless it generates meaningful engagement, it will rapidly disappear. As Susanna Dinnage, CCO of Discovery Network UK, puts it, brands should ask themselves ‘is it FUBI’? That’s to say: is it funny, useful, beautiful or inspirational? A piece of content doesn’t have to be all of these things, but must be at least one of these things, every time. Otherwise it’s ignored. Facebook’s change has simply brought this requirement for content into the algorithm more prominently. Brands take heed.

Rising ad prices

As well as reducing the organic reach of brands’ content, there are rumours of a reduction in advertising inventory. This makes sense – after all, if Facebook want to bring people closer together, they won’t want those pesky brands getting in the way, will they? Well, not quite. After all, it’s those brands that provide Facebook with revenue. A lot of revenue (up 47% YoY in their Q3’17 results). Facebook’s bean counters need not worry, and this is the clever part of the update from a business perspective: falling organic reach leads to an increase in demand for paid activity to plug the gap; increased demand alongside falling supply equals rising competition and therefore ad prices. Facebook have learned from their nemesis.

GDPR

Why might Facebook want to increase ad prices on their platform? To make more money. That’s true, but there may also be a GDPR angle to the timing of this update. Facebook have confirmed that they will simplify data control for its users ahead of the implementation of GDPR. Of course they have to do this in order to be GDPR compliant. However, when you consider that 61% of respondents to a UK study from compliance platform PORT.im said that they would not want to share their data with an organisation even if it directly benefitted them, it seems likely that a meaningful slice of Facebook’s user base will not want their data to be used as a means of targeting them with advertising. With this in mind it is to be expected that Facebook will have been looking for a way of increasing revenues from fewer ads.

Watch this space

The ad inventory and pricing trends outlined above may be a precursor to how Facebook envisage the future of advertising on the platform. It’s no secret that Facebook are becoming a major player in broadcasting, through securing the rights for screening live sporting events alongside the launch of Facebook Watch. It’s highly feasible that the news feed ads we know and love today will, in time, be replaced by increasing volumes of advertising in and around premium video content; in effect, the migration of TV advertising from the networks onto Facebook. To the GDPR point above, users might also be more willing to share their data if it’s a precursor to accessing premium content.

The full impact of the news feed update remains to be seen, but one thing is for sure: Facebook will work to provide a better experience for their users whilst meeting their obligations in the eyes of regulators and, most importantly for the platform, continue the trend of year on year revenue growth.