How Facebook’s Big Algorithm Change Will Affect Marketers and Publisher

With thanks to Contentedly 

June 29th, 2016
The day many marketers and publishers have dreaded has arrived: Facebook is changing its algorithm to send less traffic to content sites.

In a blog post this morning, the social giant announced it will increasingly prioritize posts shared by friends and family over those from publishers, brands, and other pages.

“The growth and competition in the publisher ecosystem is really, really strong,” Adam Mosseri, Facebook’s vice president of product management, told The New York Times. “We’re worried that a lot of people using Facebook are not able to connect to friends and family as well because of that.”

The move doesn’t come as a total shock. Research by SocialFlow earlier this month found that the reach of publisher stories had already dropped by 42 percent.

Facebook doesn’t announce its algorithm changes unless they’re going to have a big impact, and this one will. After all, 40 percent of publisher traffic comes from Facebook, according to recent research from analytics company Parse.ly.

I spend my life obsessing over Facebook’s impact on marketing and media. As this news broke this morning, seven big thoughts came to mind:

1. Some are saying this won’t affect publishers that much. It will.

As you may have seen on Twitter, there’s an easy way to downplay the algorithm change. If the posts of “friends and family” will get top ranking in the News Feed, then publishers just need to get those folks to share their stories.

But if you’re a publisher with a massive Facebook presence like BuzzFeed or Vox, a big reason people share your stories on Facebook in the first place is because they see them in their News Feed after you post. In other words, publishers’ Facebook posts are the seed that grows into a giant tree of traffic. (BuzzFeed’s Pound technology does a great job of showing how this works.) Fewer seeds means much, much less traffic.

2. Publishers will have to follow marketers and pay for traffic.

When Facebook slashed brand reach on Facebook three years ago, marketers went through the seven stages of algorithm grief:

1. Shock

2. Denial

3. Anger

4. Bargaining

5. Depression

6. Testing

7. Buying a ton of Facebook ads

As publishers stare at their declining reach, Facebook’s dashboard will offer a helpful suggestion: “Pay $100 to reach 18,000–24,000 people with this post.” Over time, they’ll probably have to bite the bullet and open their wallets.

3. Ad costs are going to go up.

The cost of promoting content on Facebook has steadily risen as more people spend money to promote ads on the social network.
As publishers reach that seventh stage of grief, they’re going to buy more Facebook ads to promote posts. That increase in demand will likely raise supply-side costs. So expect the cost per engagement of your Facebook ads to go up.

4. The Instant Articles explosion will slow.

One of Facebook’s fastest growing features over the past year has been Instant Articles, the product that lets brands and publishers post articles directly to Facebook. They’ve been a hit because they generally get prioritized higher in the News Feed than links that drive back to publisher sites, and they command a similar CPM.

Instant Articles will likely take the same hit as all other publisher posts, but my bet is that this algorithm change will make a lot of publishers more skeptical about giving up control of their content directly to Facebook. Don’t be surprised if a significant number of publishers pull back their Instant Article usage and refocus on driving readers to their owned sites.

5. Everyone might want to slow their roll on video too.

Most publishers have been reorganizing their strategies to focus on video. Mashable, for instance, laid off about 30 staffers this spring in a “strategic shift towards video.” A big reason that marketers have been so eager to jump on the video bandwagon is the massive view numbers they get from autoplay video in the Facebook feed (even if those view counts were ridiculously inflated.) Marketers have been jumping on the video bandwagon as well.

In many ways, Facebook created the illusion that its feed provided an infinite amount of attention for video. We were trapped in a fantasy of Mark Zuckerberg as Oprah, screaming, “You get a view! And you get a view! And you get a view!” But now the holiday special might be over, meaning that everyone needs to think hard about how they get real value out of their video investments.

6. This could hurt native advertising.

Last week, I wrote about Facebook’s new rule, which requires publishers to tag a brand in their Facebook posts when they share branded content, like The Onion did here when sharing a native ad it made for Firehouse Subs:
In turn, the brand gets access to all of the posts insights, including how much the publisher spent to buy cheap Facebook traffic, which, as I explained last week, could get some folks in hot water:

If a publisher can create branded content cheaply and bundle it with inexpensive clicks from Facebook ads, it can make a pretty sweet margin on a native ad campaign.

Facebook may now ruin that.

As I noted earlier, Facebook’s new tag will allow brands to access all of the insights on a Facebook post or ad that they’re tagged in. As a result, brands will be able to see how much traffic to native ads comes from Facebook ads rather than organic website traffic. That could break the illusion that marketers are buying access to a publisher’s sacred audience. Instead, they’re just getting Facebook users who may or may not be regular readers of that publication.

Facebook’s tagging requirement will also allow savvy marketers to calculate just how big a margin publishers are taking on these campaigns—and potentially walk away feeling like they’ve just been ripped off.

The upside to this change was that publishers could now share branded content from their official pages to drive more organic traffic. But with this algorithm change, publishers will have to rely on buying Facebook traffic to native ads more and more. Which means these potential issues will only become a bigger deal.

This news also creates problems for publishers like BuzzFeed, which make tons of money by using Facebook to get high view counts on videos it makes for brands. (See: “Dear Kitten.”) If video takes a hit, those publishers will have their work cut out for them.

7. The Facebook echo chamber will only grow.

Chalk up a win for the Facebook echo chamber. Facebook wants to show us more content from our like-minded friends and family, which, as researchers have shown, makes us more narrow-minded.

But publishers offer—at least sometimes—a reprieve from that echo chamber. Sure, The New York Times and CNN might lean left like I do, but they’re a lot more balanced than my Sarah Lawrence classmates, who are still sharing crackpot theories about how Bernie can win the election. This change could further polarize societies that can’t afford to become much more polarized.

This brings up the big question we should all probably ask once we stop freaking out about how we’re going to hit our July traffic goals. Facebook is a media force unlike anything we’ve ever seen. It controls not just the viability of individual media and marketing businesses, but also the primary way many people across the world get their news and stay informed. It has incredible power, whether it wants to or not.

Today, Facebook told us that it wants to keep things all in the family. But what if it’s just creating warring tribes?