The changes in Facebook Timeline will destroy Organic Reach for pages

All views expressed are my own.

Facebook announced a big change last Thursday. Haven't you heard? The altruistic company wants to make the world a better place, and create the best possible personal experience. The Social Media Network will become more Social again.

The post mentions: "Facebook was built to bring people closer together and build relationships. One of the ways we do this is by connecting people to meaningful posts from their friends and family in News Feed. Over the next few months, we’ll be making updates to ranking so people have more opportunities to interact with the people they care about". 

Well isn't that great? I have read a multitude of opinions and off (and on) the record comments from Facebook and they all "say" they truly want to change the user experience to serve less distraction and more real interactions with people you care about.

Now I don't know about you, but I find it really hard to believe that Facebook would have changed anything, if they would not have calculated the possible impact on their revenue a hundred times over. Facebook saying they do not any ulterior motives whatsoever seems to me implausible. Thinking that there has not been any consideration on what this change would mean for their advertisement revenue seems odd, right? Thinking this question over and thinking of the expected 36 Billion dollar they would earn over 2017, again, I think this is highly unlikely.

Follow the money:

Do I have a reason to be cynical? I believe I'm allowed to be. Facebook may mention that they have "our" best interests at heart, but they are not a charity, they are not a non-profit, they are stock exchange listed publicly traded company that needs to make money to make their shareholders happy.  And I would be hypocritical to say that there is anything wrong with that. We all need to make a living.

In the case of Facebook, they need to sell advertisement.  And interestingly, the people who have the right be critical, their shareholders & the stock market in general do not think this will affect Facebook negatively. Actually analysts expect the stock to rally:

Quoting CNBC experts: "This has not scared (...) analysts, with one, Daniel Ives of GBH Insights, upping his price target on the stock from $210 to $225. (...) Expecting even a 20% rise in stockprice  ".

The first day of trading (on Friday) saw an initial drop of approximately 4,5%, but I think that this will change direction quickly when the initial feedback from ad-paying companies is good.

The benefit of hindsight:

So I'm cynical? Yes, maybe, but is it deserved? Most definitely. Actually if we look at historic events that are similar in effect on the timeline or algorithm change, we see some clear reasons why Facebook has reason to believe these changes will bring them even better revenue results.

In 2015, the last time Facebook made such a significant shift in their timeline order for pages and publishers, the organic reach dropped dramatically. However the stock price and the revenue grew significantly in the next few months.

So now I have argued that Facebook will not lose any advertisement income because of this, and probably can expect an even higher stock price, let's talk about what these changes will mean for you as a brand. I suggest for you to look at the video below created by Facebook to help us understand what these changes may mean from consumer perspective before we focus on the brand side of things.

In the next few paragraphs I share my view on what I think this will mean. It is all still theory, as the change is not there yet. However I have over 10 years of work experience with Facebook and I think I can safely assume a couple of things:

The good news: no effect on advertised posts(?)

You might think: ok, but how will these changes really affect Facebook ads? Well that is the beauty of this change, it will not.

The ad-slots (the amount of ads allowed on a user's timeline, that depend on the user's usage) will remain exactly the same and will most definitely not be affected. quote in the Independent: The move will not affect advertisements – users will continue to see the same ads they have before, "meaningful" or not.

So this is great news for you as a company, because you are able to still utilize all the benefits from Facebook's reach,its targeting options and the cost effectiveness to push your content to the right audience. For most of my clients this is great news. However we can expect that even more companies now would like to push their content, so I believe there is good chance that there will be an increase in price, due to more pressure on the ad-slots than before.

The bad news:

Let's look to the second part of the same quote from the Independent: "But businesses that use Facebook to connect with their customers without paying for ads will also feel the pain". 

So the bad news is, by the change, Facebook will start to show less organic posts of you as a publishers or page. Facebook is very adamant about the fact they are not stop showing this content, or use censure (other than "normal censure rules" for unlawful content).

This is important, but not really relevant if you suddenly see a drop in organic reach. So yes, your content will still be pushed to people, and instead of ending up in the top 10 posts (because you had good organic reach), it now will be shown at place 25. This will mean that we as an agency (and you as a brand) that regularly creates content strategically need to reconfigure our way of pushing content on Facebook. Because Facebook may think that this change is very minor, it is quite large if you figure that a lot of our clients still use organic reach.

Our philosophy was always, if you have a limited budget, the "viral" organic effect of your post, was a good measure to figure out which post to advertise. Because a post with a higher organic reach tended to perform better and run more efficient when boosted (in advertisement). We have some clients who have a organic reach of 15% on average, and I can only imagine what this might mean for publishers who are fully depended on organic reach. Who carefully cultivated their relationship with Facebook over the last couple of years and now see their content distribution plan significantly altered.

The end?

It might be that the adjustments are to be minor. I mean, it is true that Facebook always "rewarded" posts with a better position than organic posts, even if the publisher/page only advertised only a little bit of money. So you probably still don't have to be a big spender in the near future, but I belief this change effectively is the death of Organic Reach for pages and publishers. It will become highly unlikely to be able to succeed on Facebook without spending money to get a advertised slot.

What the true effects will be, and if Facebook stock and revenue will indeed take hit remains to be seen. I will update this posts as more information becomes available. In the meantime I would love to hear your thoughts.