Facebook Algorithm Change a Business Play

Is anyone really surprised that Facebook announced Wednesday that their news feed will focus more on content related to friends and family? Not just pictures of babies (sorry, lots of pictures of babies) and your friends on vacation (Aruba is beautiful this time of year, all 12 of you I’ve seen there so far in June) while you’re stuck behind a desk this summer either. The social networking company says they’ll also begin prioritizing any key indicator or action your connections take over organic posts from brands.

Facebook’s mission is to rank the things that matter most to you first — Facebook calls them values. They plan to rank these values in terms of friends and family posts and photos first, friends and family shares second and brands the user likes third. That means much less visibility for organic posts from news sources and other brand content.

What this means to me is Facebook is closing the door slightly more to force brands to pay up. Friends and family members don’t pay to boost their pregnancy announcements or random musings. By prioritizing those, Facebook is telling brands, “if you want to get in the feed, you’re going to have to open your wallet.”

I don’t know where Facebook’s Q2 revenue is going to come in. They generated $5.38b in Q1 2016, beating Wall Street’s expectations, and most of that came from advertising revenue. If Q2 revenue was strong, this could be a way to generate additional revenue and show growth in Q3. (The timing of the announcement makes me believe this is the case.) While unlikely, perhaps revenue was not as strong in Q2, so this is a way for Facebook to bounce back.

One argument, however, is that consumers may want more news in their feed — the numbers say they do. A study by the Pew Research Center and Knight Foundation found about 44 percent of American adults get their news from their Facebook feed. This change means a lesser chance for learning about stories that are pre-tipping-point for becoming a national debate, unless your friends are in the region of origin to share.

While this is certainly going to be an issue, great content will ultimately win. Facebook will put a bigger emphasis on shared content. It will be up to them to assign a value to sharing content such as a cat quiz versus a cover story in The New York Times Magazine. On top of  this, video and Instant Article content will also appear ahead of everything else — it all lives on Facebook’s servers.

While brands often complain about these type of changes, the truth is that Facebook has every right to manage the algorithm as they’d like, as long as it’s done within certain fair guidelines. It’s the same as how Google manages to surface certain websites and other content in search, or how Twitter presents Tweets in their feed. The problem is, these companies are too big and important to ignore. Their targeting is too good. This can handcuff some businesses.

As Ben Thompson wrote earlier this year:

Every now and then someone, usually a set of publishers, tries to defy the search engine’s influence, only to come crawling back within weeks once traffic craters. The reality is that most people find most web pages through Google, which means Google calls the shots — and sells the most expensive advertising of all.

Most people find their apps and news content through the Facebook feed. I don’t think brands will start crawling back. I don’t think so because they’ll never have left in the first place.

Sign up for my bi-weekly newsletter where I’ll share what I’ve written about or read from around the web related to mobile, digital, emerging media and more. The newsletter is sent 8 p.m. ET on Sunday nights and appears on ScottStanchak.com 10 a.m. ET on Monday.

Continue Reading