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The Raising Cost of Content Distribution on Facebook. What's next?

May 19, 2015 / by StackAdapt

cost_of_content_distribution

 

In 2008, brands may have questioned the value of social media networks in helping them achieve their marketing objectives. However, over the last five years, billions of dollars have been paid to Facebook ($3.85 billion just in the last quarter to be exact). With total users approaching 1.4 billion, it is no surprise that virtually every publisher and marketer now treats Facebook as a mandatory part of their content strategy. But what many content marketers don't realize is the extent to which this channel has evolved in the last few years, due to the wide adoption of Facebook among brands. So what are the realities of Facebook as a channel to distribute content?

 

Organic Reach Is Decreasing.

 

The average Facebook user doubled the number of friends from 130 to 250 in the last five years (DMRMashable). The number of brands that use Facebook as part of their marketing strategy also grew from 43% in 2009 to 88% in 2014 (Marketing Land). "There is now far more content being made than there is time to absorb it. On average, there are 1,500 stories that could appear in a person’s News Feed each time they log onto Facebook. For people with lots of friends and Page likes, as many as 15,000 potential stories could appear any time they log on." (Facebook). There were 4.75 billion pieces of content shared daily as of May 2013, which is a 94% increase from August 2012. (Facebook)

 

This overwhelming amount of content creates stiff competition between brands trying to organically reach the audience they spent so much money building. The unfortunate reality is that there isn't much that can be done to increase the reach. Even though the time spent on Facebook has increased from seven hours per month to 26 in the last five years (NielsenDMR), there are simply not enough hours in the day for users to see all of the content that is published by brands. Facebook understands that they can't just blindly follow the dollars because this could ultimately lead to user fatigue from the sponsored messages and decrease their engagement, further reducing the organic reach. 

 

Organic_Reach_Facebook

 

Summary as to why organic reach is decreasing:

  1. People continuously add more friends on Facebook
  2. People follow more brands and pages
  3. More content is being created online 
  4. Facebook focuses on content relevancy
  5. Organic reach of every post continues to decline 

 

 

Pricing Consequences 

 

As a result of the competition between brands to get their content seen, prices on Facebook have steadily been increasing over the last several years. 700% year over year is significant:

 

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Rising prices put pressure on advertisers who leverage Facebook for content amplification because the ROI from content is difficult to track. As a result, more buying on the platform is shifting to performance advertisers like game and app developers, and e-commerce. 

 

Solution: Avoid 'Distributed Media' Approach in favour of Programmatic Native Advertising 

 

Brands that invest in content to reach their audience now look outside closed social media platforms to distribute their content and drive users to their sites and content hubs. Native Advertising is seeing wide adoption across marketers to address the ever-growing competitiveness on Facebook. The channel is expected to grow at 25-30% for the next three years as it offers tremendous opportunity for marketers to:

  1. Efficiently distribute content across the entire web to achieve short-term, campaign-specific goals of generating awareness and purchase intent. 
  2. Strategically invest in building an audience on brand-owned properties to move away from dependence on platforms like Facebook.

The current low competition that will eventually put upward pressure on the pricing offers early innovators an opportunity to reach audiences with content, while being mindful of costs and performance. 

 

Topics: Featured

Written by StackAdapt

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