Five fallout’s from Facebook’s news feed update

image: courtesy of techcrunch

I’ve written several times in the past on the Facebook news feed/ edgerank ( like this one and this one and this one) hence was very interested in the latest major update to Facebook’s news feed (fronted by Facebook’s owner; Mark Zuckerberg)

Mark Zuckerberg is 1/ a good person 2/ trying to cement Facebook’s long term future

1/ Zuckerberg is well known for his philanthropy, feeling he has a responsibility to the world and to ensure Facebook is good for people’s well-being (more on the fact Facebook isn’t always doing that at present in point 2 below).

Facebook wants to maximise the time spent on Facebook/ make it more valuable. Zuckerberg is taking the gamble that this in reality will also mean people spend less time on Facebook and some measures of engagement (particularly around Brands) will go down.

2/ During 2017 Facebook started to become synonymous with fake news, abuse, click bait, harmful filter bubbles and being used as a political weapon to impact elections.

Zuckerberg knows that he needs to stamp this out and bring the ‘warm fuzzy feeling’ back to Facebook and in making some significant changes to its news feed/ edge rank he is making a real statement of intent.

This will cost Facebook revenue/ profit though (the extent of which is still unknown) and the markets know this e.g. The market reaction to the change was a personal net worth reduction for Zuckerberg of £2.4 billion.

For Brands I think the five fallout’s will be:

1/ A further drop in organic reach (which for many brands is already in single %digits) and it being more difficult to reach target consumers (as there are simply less opportunities to do so)

2/ An increase in advertising costs per impression/ engagement

3/ This update will heavily hit media company revenues as their content becomes more difficult to surface due to the algorithm becoming tuned to favour much more community and friend content Vs clickbait and outrage

4A/ Brands will focus more on creating real meaningful relationships and engaging in communities rather than simple content marketing articles (as is still often the case for many Brands)

4B/ Following on from the above, genuine (non-link bait-esque) editorial and innovative creative will be rewarded with great engagement due to the very nature of fewer brands gaining traction on Facebook (though the editorial will need to be backed with larger promotional budgets)

5/ Be prepared for this algorithm (though its impact will be felt to a lesser degree due to the very nature of the platform) to be rolled out to Instagram

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