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Online Sellers May Soon Be Paying to Reach Facebook Fans

Plenty of warm paeans from the New York Times and elsewhere complimented Facebook’s moves to cut down on unpaid ads appearing in the news feeds of its userbase. And while Facebook users may rejoice, it means fewer potential shoppers may see online sellers’ posts.

After conducting user surveys, it looks like Facebook chose to utilize that feedback to change what’s appearing in news feeds and prompt advertisers to pay up if they want that desirable placement.

Bigger brands who wish to be in news feeds will likely adjust their budgets and proceed as usual. But small and medium sized businesses may find it more difficult to come up with the budget to reach their fans. In fact, the move, announced here, could be considered akin to Google Shopping going from free to paid with Product Listing Ads.

EcommerceBytes.com spoke with social media analytics firm SumAll about Facebook’s latest news. According to SumAll, what may be news to businesses is how limited their reach may have been on Facebook.

“What’s not being discussed is how, with the amount Facebook has been shrinking the reach of posts, in order to push people to ads, that nothing has really changed,” SumAll said. “All that’s changed is the perception of it – most businesses did not know that their newsfeed posts were not being seen by the majority of their audience.”

Businesses seeing a lot of “likes” for their presences on Facebook may be seeing a mirage. SumAll blamed click farms for diluting that metric – while businesses see a great number of likes, they really aren’t getting the impressions they might expect. SumAll provided context with a sample of 50,000 of their users and what they are seeing with those metrics:

  • The average click-through rate (CTR) increased from roughly 1% to 8% between January 2012 and September 2014.
  • Average daily page views per account declined from 98 views per day in January 2014 to just 64 views per day in September – a 35% decrease.
  • Average daily impressions per account declined from 40,000 impressions per day in January 2014 to 20,000 impressions per day in September – a 50% decrease.

“Organic reach, impressions, and page views are declining,” SumAll said, noting that in less than a year’s time, “generating any forms of action or engagement has become four or five times more expensive.”

In the example of SumAll’s customer The Loop Loft, their click-through rate (CTR) for paid content slipped from 3.34 percent in January 2014 to a September mark of only 0.34 percent in September. When SumAll compared average performance for that same period of time to January – September 2013, they found these concerning numbers:

  • Cost-per-action (Likes, comments, conversions, event responses, etc.) climbed from $0.05 to $0.24 – a 380% increase.
  • Cost-per-new site user (derived using Facebook and Google Analytics data) is up from $0.20 to $1.16 – a 480% increase.
  • CPM is up 70.4% and cost per thousand people reached is up 104.7%

For current and prospective advertisers feeling Facebook’s push, they may be tempted to stiffen their backs and wait for terms that they will truly “like.”

David A Utter on LinkedinDavid A Utter on Twitter
David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.