There are more rumors about Facebook than there are about Oprah’s sexual preference. You’ve heard a few of them. Facebook will charge a membership fee. Facebook will charge to look at profiles. Facebook will charge for messaging. Facebook is secretly dating Gayle King.
All of these have been denied by the company and pooh-poohed by experts, who contend the value of Facebook is its massive audience, something that nickel-and-diming customers might significantly diminish.
But there’s one rumor about Facebook and charging currently making the rounds that seems more logical. It’s that Facebook, in an effort to increase revenue on advertising, will begin limiting the reach businesses have on the service without paying for the privilege.
In other words, all those who tried to build up their “likes” via promotional gimmicks and outreach are allegedly going to have to set aside some budget to reach the total audience they have amassed.
Facebook claims its reach is 12.5% of desktop browsing time, 20% on mobile.
The Valleywag site, which chronicles Silicon Valley, was the first to explore this new possibility. Valleywag cites an anonymous source (always a red flag, but bear with us) that claims the social media site will cut down on the “organic” page reach, ie the people who voluntarily signed up to "like" or follow a page. Brands would only be able to reach one to two percent of those followers without forking over some cash, as some major corporations have hundreds of thousands of followers. Valleywag has been on the story for some time, having previously written that Facebook was considering limiting audience reach to 15%-20%. The new “limited likes” numbers being floated are somewhat Draconian.
If the rumors are true – and they are only rumors at this point -- that’s a huge problem for brands with sizable investment in amassing that audience. Where once they could blanket an opted-in audience m at the push of a button to influence perceptions and behavior, they now will reach a fraction of those potential eyeballs without paying.
Media companies that have used Facebook to drive traffic will also be affected, as their stories linking back to the home site will now be seen only by a fraction of their audience.
Having to pay for reach would likely have little effect on multinational corporate brands. Those truly damaged would be small companies, local restaurants, bands, and upstart content web sites. Beyond their typically small budgets, these companies are usually "liked" by true believers who want to obtain the information being pushed. Now, a good portion of that audience may have to seek it out on their own, an iffy proposition at best.
Facebook may be doing this despite booking an impressive $2.3 billion in advertising revenue for the 2013 fourth quarter. But the imperative to grow each quarter, thanks to its status as a public company, is driving the new tactic. Brands may have no choice but to play along — Facebook claims its reach is 12.5% of desktop browsing time, 20% on mobile.
So far, there’s been no official comment from Facebook, which may be simply putting out feelers to see how the market reacts, and whether anyone would be willing to play ball. The biggest issue confronting any potential implementation of an unpopular advertising tactic would be the alternatives available — if a company decides that the Facebook audience isn't worth the potential expenditures, there’s always Twitter, YouTube, and that old standby, email, to reach fans with marketing messages.
In other words, brands don’t have to “like” the new Facebook advertising tactics. And it will be their choice as to whether they live with it if it comes to pass.