Facebook Inc (NASDAQ:FB) announced that starting in January, it will bring down the number of posts made by brand pages, such as pitches to port a new mobile app or access a TV show, that are shown in the news feeds of its 1.35 billion global users. The social networking site is making this aggressive decision without worrying about upsetting the market or investors.
Facebook takes confident steps
Sitting on high profits and a surging stock price, the company has taken investors by surprise by saying that it is looking forward to spending billions of dollars on projects that might not generate any profits. Facebook announced just last week that marketers will need to buy ads to have access to users through Facebook. It implies that now users will see fewer ads in their News Feeds.
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“This change is about giving people the best Facebook experience possible and being responsive to what they have told us,” said the company in a statement.
Facebook’s new policy will be executed across all advertisers irrespective of their size. However, Facebook is a dominating force in social media advertising similar to Google, implying that advertisers are left with no option but to pay for ads.
Rebecca Lieb, a digital advertising and media analyst at the Altimeter Group, said, “It’s a clear message to brands: If you want to sound like an advertiser.” Businesses that use the social networking to reach customers through Facebook pages will be disappointed with the move.
Enriching users experience
Facebook has made other changes over the past two years in terms of determining what people see in their News Feeds to cut down on the number of unpaid posts from businesses. Instead, the social networking giant clarified that users will be able to watch videos from their friends and families.
Facebook took up the promotion of its advertising product far more aggressively with pop-ups that appeared on users’ mobile phones asking them to install a new app. In the third quarter, the company reported advertising revenue of $2.86 billion, which is an increase of 64%, and said that ad prices surged by 274% compared to the previous year.
Brian Boland, a Facebook vice president who oversees the marketing of ad products, said that the latest tweaks were not intended to increase ad revenue but to make Facebook users happier, which helps everyone, including advertisers.