There’s a big difference between how many Likes a company has on Facebook Inc (NASDAQ:FB) and how many people it can actually reach, and the gap will only get larger as competition for a limited piece of online real estate gets more intense, reports Cotton Delo for Advertising Age.
Facebook (FB) users share and Like more, but read the same amount
As Facebook Inc (NASDAQ:FB) becomes more ingrained in people’s daily online routine, they share more often, add more friends, and like more pages (the half-serious Zuckerberg’s Law says that people tend to share twice as much this year as they did last year). But even if the amount of content they could potentially see in their news feed is growing exponentially, the number of stories that Facebook serves up stays the same.
The latest Robinhood Investors Conference is in the books, and some hedge funds made an appearance at the conference. In a panel on hedge funds moderated by Maverick Capital's Lee Ainslie, Ricky Sandler of Eminence Capital, Gaurav Kapadia of XN and Glen Kacher of Light Street discussed their own hedge funds and various aspects of Read More
With that in mind it’s easy to understand recent research by [email protected] showing that organic, unpaid reach has been falling for the last six months with no sign that it will stabilize soon. Everyday Facebook Inc (NASDAQ:FB)’s algorithms filter more and more out of users’ news feeds, and unpaid branding just isn’t a high priority.
Facebook Inc (NASDAQ:FB) is trying to deliver ‘high-quality’ links (which has been largely meant websites for print media so far) that people enjoy more, cutting linkbait and clear marketing campaigns as much as possible. There is still some room for branded ads, but of course Facebook makes its paying advertising customers a priority.
Since there are more companies competing for a smaller share of the news feed, the chances of making a splash without spending money are going from bad to worse, which is good for Facebook Inc (NASDAQ:FB)’s attempt to monetize its platform.
Like farming also dilutes unpaid ad reach
Delo’s argument that unpaid advertising is getting squeezed out by paid ads and other types of content is probably true, but it also buys into the myth that every account on Facebook Inc (NASDAQ:FB) is genuine, when Like farming is also having a major impact on unpaid reach.
Like farmers (people who get paid to Like pages) have learned to hide themselves by diversifying their supposed interests, and Facebook Inc (NASDAQ:FB) page with international reach often have a disproportionate number of fake Likes. When a company makes a new post, Facebook Inc (NASDAQ:FB) will first distribute it to a small percentage of accounts that have Liked the page, and then it will continue distributing the ads with high engagement. Since fake Likes dilute engagement, they make it harder for ads to gain traction.