Earlier this month, Facebook announced major algorithm updates to users’ News Feeds. The updated News Feed algorithm will prioritize social interactions from users’ friends and family over content from businesses, brands and media companies.

 

We believe this update is, ultimately, a good thing. As the platform improves its image and functionality for users, those users will continue to use the platform and remain a captive audience for brands to target in a smarter, more authentic way. The update will force brands and media agencies to create better, more innovative content that drives business outcomes.

 

Organic Impact: Decreased Organic Reach Overall

With the algorithm update, there will be an overall decrease in organic reach for Facebook Pages. However, Pages that create highly engaging content that facilitates friend-to-friend interactions will fare better than those that don’t.

The announcement gives us some insight into the specific factors that lead the Facebook algorithm to consider a post engaging content. For instance, there are specific mentions of comments between friends and Page content shared between friends as positive factors. The announcement also touches on engagement bait posts, which will be negatively affected by the update. Facebook’s focus is now on active content rather than passive content, including a continued emphasis on live over uploaded video content, and increased newsfeed visibility for content from Facebook Groups. Where it makes sense, brands may test these specific content types in an attempt to make the most of newsfeed changes – but ultimately brands should focus on creating content that resonates with their communities to have a higher chance of reaching their audience organically with the new algorithm.

 

Paid Impact: Higher Competition and Costs

While Facebook has said that ad algorithms will not be affected by this change directly, in the past, we have seen brands increase their ad spends when organic reach has decreased, thus increasing competition and cost of Facebook ads. For promoted posts specifically, if a post results in low organic engagement, then it may be negatively affected after being boosted as well. With this update, we expect CPCs to increase, though by how much is unknown.

We predict that Relevance Score will become more important for ad performance in future months, when highly relevant ads will be rewarded with cost efficiencies. In Facebook ad reporting, Relevance Score is the rating (from 1 to 10) that estimates how well an ad is relevant to its target audience.

 

Channel Impact: More Brands Testing on Instagram

We expect to see more brands experiment with advertising on Instagram, where these News Feed changes do not apply – and where advertisers can leverage Facebook’s ad targeting. As Instagram continues to be a platform where users engage with branded content organically, it may also become a more successful environment for brands’ organic and paid efforts.

 

Influencer Impact: Higher Costs for Influencers and Ultimately Brands

Facebook’s News Feed algorithm update will negatively impact the organic reach of not only business Pages, but also influencers who operate as Facebook Pages. Recently, Facebook began pushing influencers to verify their Pages in order to provide additional features, such as the Facebook Handshake tool that allows brands to promote their Branded Content, so even micro-influencers are now operating as Pages rather than individual profiles on the platform. Like business Pages, influencers will also have to spend more money to promote their daily content, so the cost of doing business for them will increase. As a result, influencers may expect higher payments from brands for content creation to offset this cost, and brands will have to pay more to amplify influencer content.

 

Next Steps:

  • Assess existing organic content strategies based on new algorithm factors.
  • Closely monitor the impact of increased competition on ad CPCs.
  • Closely monitor how Relevance Score factors into ad costs.
  • Closely monitor the costs of influencer content creation and responses to algorithm updates from influencer relationships.
  • Look for ways to authentically interact within Groups, as Groups will still be relevant after the News Feed algorithm update.

 


Caitlin Jeansonne | Group Media Director

 

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