There has been a lot written and said lately about Facebook’s dramatically declining reach for businesses and how Facebook is struggling to maintain a high quality news feed. What hasn’t been covered as thoroughly is that this could cause the complete collapse of business use of Facebook as a communication tool. I think Facebook could prevent this from happening if they take a couple of lessons from email, but will they?
The core way that Facebook generates value doesn’t match the way that it generates revenue. Since its founding in 2004, Facebook’s primary value generation mechanism has been to connect people with their friends and family. This is why people set up accounts, it’s why people log in daily, and it’s why people still had doubts about Facebook’s ability to generate revenue when it IPO’d in 2012 after more than 8 years of doing business.
Shortly after Facebook’s IPO (in the same month), they rolled out a new advertising option that allowed businesses to pay to promote individual posts. A few months later in 2013, they rolled out an option to pay to promote a business page to get more likes.
This was the gold rush time for business owners who were on Facebook. All of a sudden, businesses had a way to grow the number of likes on their page (which has always been a significant challenge) and then they could communicate with those people on a regular basis free of charge.
If you own a business, aside from in person interaction there are only 3 ways that you can reliably get in touch with an existing or potential customer: a phone call, a text message (which is very difficult to use), or an email. Of the three options, email has been the only scalable way that businesses could use to get in touch with people on a regular basis, and the average open rate of those group emails has been around 20%. Facebook was allowing businesses to post messages that could easily reach 20% of page fans. Bingo! A new business communication option became a reality.
Facebook became interesting to business owners because it became the only other platform besides email that they could use to regularly stay in touch with a group of interested people. Since word of mouth has always been the primary way that small businesses get new business, a new opportunity to generate touch points was suddenly worthy of attention. Small business owners started setting up accounts and posting regular status updates to their walls. And it worked. So people starting using Facebook’s tool to buy more likes and to sponsor more stories. Both resulted in a bigger audience that an individual business owner could communicate with on a regular basis.
Facebook was well on its way to becoming the 3rd most important way for a business to communicate a message to a person, after the phone and email. Then Facebook decided to change it all. Since late 2013 Facebook started aggressively changing its algorithm to show posts from businesses to a much smaller percentage of the people who like a given business page. Although nobody can say how far Facebook will go with this change, they have very rapidly taken organic reach down to mid-single digit percentages for many businesses with no signs of stopping. This is fundamentally shifting the platform from an engagement and advertising tool to an advertising only tool as far as businesses are concerned.
Why This Could Cause A Complete Collapse Of Regular Facebook Business Use
If Facebook decides to push the ability to reach your own audience down to 1%-2%, small businesses won’t just post a little less frequently, they will stop posting in Facebook altogether. Just as it is a challenge for typical small business owners to set aside the time to write and send an email newsletter, it is challenging for owners to post Facebook updates on a regular basis. If they get their message in front of people, it’s worth it. But, if they don’t, they aren’t going to do it just for fun.
Personal users of Facebook log into Facebook daily to see what is happening with their friends and family, regardless of whether they have something to post. Small business owners do not log into their Facebook business pages daily just to see what is going on. They only log in if they have something to post or if they are checking on the interactions with one of their posts. Take away the desire to create those business posts and you lose the business eyeballs completely.
This doesn’t mean that Facebook will be totally useless to small businesses. It just means that if Facebook continues down this road, the only real value to a small business will be as a tool to advertise. And that does have value. Being able to target ads to friends of people who like your page brings social proof into the equation that can be very valuable to the small businesses who rely primarily on word of mouth to drive business.
But, an advertising platform is different than a communication platform. And, without the business eyeballs, it will be much more challenging for Facebook to get those owners to advertise.
The Problem Won’t Fix Itself
Some might say that there will be a self-regulating effect, where lower engagement rates will cause businesses to post less, which will allow more room in a typical person’s newsfeed to then boost engagement rates again until a happy medium is reached. That would be true except for the fact that the average number of posts that a person could see on a given day is going up dramatically from personal connections as well. The challenges that Facebook faces on the personal feed side to ensure that the content stays relevant makes it unlikely that this problem will just sort itself out.
What Facebook Should Do About the Problem
Facebook should reverse course and change their focus back to being an engagement platform for businesses rather than just an advertising platform. Facebook has said that they want to tap into the small business market, so there is no question about their intentions. But if they want to do that, they cannot just be an advertising tool for small businesses. In order to get and retain mass adoption they need to empower small businesses to communicate with their fans free of charge as well.
So how can they do that if there are just too many posts showing up in users feeds?
They need to take a cue from the way that email works and give users and companies better control over what shows up in their feeds and who they communicate with.
With email, in theory, you control who is allowed to email you on a mass scale by opting in or out of various lists, and businesses control who is on the list that they are mailing. By allowing users to control their inbox, email has persisted (despite many challenges) as one of the most important communication mechanisms in the world.
Facebook does the opposite. Facebook controls what you see in your feed. Users can decide who they want to give a chance to be in their feed by liking a person or business, but then Facebook decides which posts make it into your feed and which get filtered out. On the business side, although you can technically get rid of people who like your page (through a ridiculous interface that allows you to see 14 fans at a time and either make the fans admins of the page or arbitrarily remove them), Facebook doesn’t give any way to know who is actually engaging with your content and who is not. Considering the fact that Facebook penalizes your reach if your posts don’t engage a lot of people (which they do), this is pretty absurd. In email it would be the equivalent of lowering the deliverability of your email depending upon the open rate of your emails, but not allowing you to see who is opening your emails in order to trim your list.
What about segmentation? As far as advertising goes, Facebook has invested a lot of effort in allowing businesses to do some specific targeting of ads to be sure they only get in front of the best audience. But what about if I want to target a particular group of my followers when I post something as a business? No, sorry, that isn’t possible. With email I can have a list of my current customers and everyone else so that if I just want to get a simple communication out to my customers about a logistical issue I can do that. If Facebook enabled similar functionality, maybe they could keep personal users and businesses both happy.
Add into this equation the fact that everything in Facebook is geared toward liking things (very little emphasis is put on unliking people or businesses) and it is no wonder that Facebook is struggling with news feed clutter. Every day I get suggestions of new people to follow, new products to try, and new posts to read. How about balancing it out a little by encouraging me to unfollow pages I don’t interact with, or making it easier to unfollow a page that I feel is spamming me? If I see a sponsored post in my feed there is a large Call To Action saying “Like Page”; if I see a post I don’t like from someone I already follow, I have to click on a very subtle arrow in the upper right of the post to bring up a menu and then find and click on the option to unlike the page. Based on comments that I see regularly in Facebook from people saying “how did you get on my page – go away”, I’d be willing to bet that a huge number of Facebook users don’t even know how to unlike a page once they’ve started following it. Go try to figure out how to unlike the businesses that you have liked in Facebook – if you haven’t looked for it before it will probably take you a couple of minutes just to find the list of businesses.
At the end of the day it is challenging for Facebook to optimize for personal user experience, while still making money from the businesses that pay Facebook’s bills. The ads are going to be present no matter what; Facebook needs them to have a business. Given that the ads will be present regardless, I would argue that the personal user experience will be better if businesses are also enabled to use Facebook as a communication tool. It would finally help align Facebook’s revenue generation with the way that it generates value for its users.
I still have hope that Facebook will reverse course with the dramatic changes that are jeopardizing the platform’s use as a communication tool for small businesses, but for now the jury is still out on where this is all headed.
What do you think Facebook will do?
image credit: Giovanni Saccone