Facebook recently announced a handful of changes to promote ‘meaningful social interactions’ across its network. News feeds will be the first to feel the hit as algorithms will soon change to quickly push aside businesses, brands and media, in favor of friends, family and groups. While this move to meaningful is user focused, its predicted effect on ad spend could prove massive.
The End of Organic Reach?
This change was made with the user in mind; to de-clutter the endless videos and articles that are bombarding news feeds, to u-turn the current ‘engagement for the sake of engagement’ state of the scroll down. Facebook insists that by restricting organic reach to close connections, more localized conversations will be brought to the forefront, bringing communities closer together. Left unsaid was the indirect effect this will have on ad spend, something which could have massive impacts throughout the larger ad ecosystem.
Together with Google, Facebook has worked hard to dominate in the online ad world, and has made things abundantly clear that this new feature will not affect sponsored posts; this statement is too important to ignore. As the news feed algorithm changes, we expect advertising will slowly become the only way to get brand messages to target audiences on Facebook, rendering the reliance on organic traction campaigns almost insignificant; even Buzzfeed has been buying ads in preparation. This bold move should eventually see Facebook winning on two fronts: user experience and indirectly, ad spend.
Ads May Surge
This latest move will deliver a more engaging environment for the end user and will also provide a cleaner and more targeted canvas for brands to advertise. At the moment, news feed ads can get drowned in a sea of content, so it makes perfect sense that giving the Facebook-power back to the user will also deliver high value to the advertiser.
Ads that actually get interactions (installing an app or a purchase) are more valuable to Facebook; they cost more, yet also yield a higher return. With most of the noise removed from the Facebook news feed, these ad costs that drive valuable engagement (installing an app or driving a purchase) will only climb as demand increases … yet they will have the power to deliver stronger Return on Ad Spend (ROAS) than ever before.
The Need For ROAS
Projecting forward to a new world where Facebook news feeds are restricted to ‘meaningful’ posts for friends, family and those you want to engage with; the cost of ads on the platform are expected to rise. Every dollar spent on Facebook ads must be spent wisely and must yield strong return. Guesswork with untested creatives could prove an extremely costly exercise. Brands everywhere will need their ad assets optimized for ultimate performance and best possible return on ad spend.
It’s true that no one can know the exact effect of this news feed change further down the road, but what is known is that due to this projected ad-demand growth, now is a more important time than ever to test and optimize assets for maximum cut-through, and to use AI technology that can react fast to changes, obtaining constant access to industry benchmarks in the process. In the app world, a significant portion of the big players are turning to companies like Bidalgo who deliver AI media buying expertise for user acquisition, positioning themselves and their clients for optimum ad performance, ready for any sudden changes announced by Facebook and the other social power players.
Zuckerberg himself noted this news feed move as bold, insisting it essential for the longevity of the company and product. Facebook HQ envisions a platform where users can connect intimately with each other, without noise, fostering a stronger sense of community. Advertisers see the beginning of a tighter and tougher Facebook ad marketplace where every dollar counts to bring in results. As more changes are expected further into 2018, bringing Facebook Partners into your UA or ad strategy could prove a healthy step in the right direction.