Facebook has a new algorithm.  Can advertisers still be relevant under the restriction of “meaningful engagement”?

Facebook made the news again this month with an announcement of a new update to their news feed algorithm to enable better placement of “meaningful content” in the feeds of its over two billion users.  Now content from friends and family will take precedence over content from publishers and brands.  According to the New York Times:

“(This) shift goes beyond previous changes by prioritizing posts that have generated substantive interactions. A long comment on a family member’s photo, for instance, might be highlighted in the News Feed above a video that has fewer comments or interactions between people.”

The news is hardly a surprising change.  A good company pivots and innovates.  A good company addresses problems.  A good company becomes more valuable to its users.   

Facebook has such personal meanings to all of us who use it – but it is just a company.  It has become a defining system of a generation, has changed how people interact with each other, and how media is distributed, but it is just a company.  

Let’s review Facebook’s company history to have context for this new announcement:

2004: Facebook launches, first at Harvard, then other universities.

2006: Anyone over the age of 13 can now join Facebook.  The news feed launches, showing all friend updates in live on a homepage feed.

2008: Sheryl Sandberg joins the team.  Chat is introduced. Growing smartphone adoption results in more Facebook users.

2010: Likes and location features are now available on Facebook.  

2011: Political uprisings in Egypt were organized through Facebook and Twitter, showing social networking’s potential for political influence.

2012: Facebook files for an IPO, and unveils advertising options.  Facebook acquires Instagram and reaches 1 billion users.

2013: Facebook launches its search feature.

2014: Facebook acquires Oculus – a virtual reality headset company, and WhatsApp, one of the largest global mobile-messaging platforms.

2015: Facebook’s founder announces a philanthropic initiative, contributing 99% of his wealth to go to funding world-changing causes.

2016: An upset election caused the FBI to open an investigation of Russian interference with the U.S. election through Facebook targeted advertising. “Fake news” became a household phrase.

2017: Facebook cracks down on “Fake news” with an update that prevents pages from advertising fake news articles.  Facebook hands over advertisers content to the FBI and Congress, and is asked to testify about how foreign organizations may have used the social networking site to influence the 2016 election.  They announced updates to algorithm to discourage engagement baiting.

2018: Facebook announces an update to their news feed algorithm to focus on meaningful interactions.  This is at least the 26th publicly announced algorithm change.

Facebook’s appeal is its ability to show the user what the user wants.  The algorithm of Facebook determines content that shows up in the news feed based on the probability of a user liking, commenting, or sharing it.  This algorithm often resulted in news feeds becoming echo chambers for a viewer’s own political beliefs, disconnecting individuals from broader and varied discourse – perhaps resulting in broader political divisions in America.

Facebook’s updates have come under criticism and scrutiny in the past, but over the past year, even Facebook’s own red-book-toting employees began to speak out against Facebook’s role in current events. A social experiment lead by the site involved altering news feeds to control emotions of the users, who were not informed that they were being studied.  Academics took a deep dive to understand how social networking sites affect the mental well-being of its users, and Facebook confirmed that social media use has potential to be harmful on user’s mental health, but gave one caveat:

 

Actively interacting with people was positively correlated with well-being and mental health.  

 

With this knowledge, and power of influence, Facebook had the power to make a decision for or against the mental well-being of the over 2 billion people who use the site.  And as a good company should, they took the high road.  Focus re-shifted towards meaningingful interactions between real people, or to use Facebook lingo – “friends”.  When under such harsh public criticism for mental health and political impact – Facebook’s decision to refocus on what is meaningful for its core users was indubitably a wise decision that will enable the company to stay relevant.  

Now brands who advertise on the site are left on the sidelines wondering how these updates will affect their advertising effectiveness and spend.  Facebook’s effort to put the consumer at the heart of their product will ensure brands have an engaged potential audience to reach, but will these new changes prevent brands from ever reaching them?  Facebook has to make its audience happy, but balancing that with the happiness of its shareholders will be the challenge this new algorithm has to withstand.

Here are some predictions of how this algorithm may affect brands and advertisers:

1. Brands will still have a chance to deliver meaningful, engaging, organic content.

Striving to get people to engage on posts is still a viable path forward for brands. Interaction will take precedence over content consumption.  This may be beneficial for brands who can generate meaningful content that attracts engagement.

2. CPMs for Newsfeed placements are likely to increase.

This move made the Facebook ecosystem much more competitive for less ad space.

3. This is the end of engagement baiting.

Petitions to “please COMMENT and SHARE” or “TAG A FRIEND” on posts have worked to game Facebook’s algorithm in the past, but will fall by the wayside under the lens of “meaningful engagement.” Facebook shared their perspective on this in their newsroom.

4. Influencers will become even more important.

Individual influencers who have been able to grow organic and loyal followers may now become a critical connection between brands and audiences.  Influencers will always put their audience first, and brands will be taking chances on influencers behavior, which could be risky.

5. For news and media brands, your audience will vote on your quality.

For brands who promote content, your users will now be given the chance to speak directly to Facebook about what they judge to be high quality.  

6. Facebook follows are back on the table.  

This could mean advertisers may need to refocus on Facebook Follows, as it is a user’s way of indicating interest in following a brand’s posts.  Liking a page shows some affiliation with a brand, but unless users actively designate that they want to follow a brand, brands may not have much access to organic newsfeed placements.

7. Awareness and conversion ads?  

It is too soon to tell how Facebook awareness and conversion ads will be affected by this update. Ads that run on the Audience Network may not see any change in CPM or performance.

Facebook has delivered constant disruption from its inception in a Harvard dorm room in 2004.  In 2016 we witnessed its role in a disruptive election, and in 2017, its ability to disrupt human happiness and mental well-being.  Facebook’s survival as a company is dependent on maintaining its value to its users, perhaps even at the expense of its advertising revenues.  These timely announcements hopefully set the brand back on track to delivering the interpersonal, meaningful content that made it successful.  Advertisers and brands must now rise to the new bar being set by the social network giant: to create meaningful interactions.

But striving for meaningful interactions with the audience and potential consumers has been a goal of advertisers and brands long before this Facebook announcement.

Sources:

http://www.businessinsider.com/facebook-history-photos-2016-9/#even-with-his-contributions-to-the-chan-zuckerberg-initiative-zuckerberg-is-keeping-his-iron-grip-on-facebook-33

http://mashable.com/2017/09/08/facebook-elect-trump-russia-election/#fg..JgBoYmqi

https://www.nytimes.com/2018/01/11/technology/facebook-news-feed.html

https://www.theguardian.com/media/2017/dec/20/facebook-twitter-mental-health-sean-parker

This piece was co-authored by Vina Rathbone, Consumer Insights Analyst at Drake Cooper.