Sign up FAST! Login

Facebook Changes Force Retailers to Advertise More

Facebook Screwed Lots Of Retailers Business Insider


Over the past five years, retail companies big and small spent a lot of time and money over building up their visibility on Facebook. They built up "Brand Pages" on Facebook, and attracted attention to them with a constant stream of posts. They put on contests. They hired "social media marketing" firms. Some companies began selling products directly through these Facebook posts.

These online retailers did all this with the full support and encouragement of Facebook, which was eager to show the world and Facebook apps are a place where consumers want to shop.

Facebook allowed these brands to set up their pages and reach out to the Facebook users who "liked" them for free. And, by November 2013, many of them had the Facebook News Feed into a source of actual, high-margin revenues.

Then came December 2, 2013, the day Facebook made its change to the News Feed. Suddenly, all that work went for naught.

It turns out the News Feed tweak did more than just highlight "high quality" news stories. It also totally buried posts from retailers on Facebook.

A source from one retailer told us that her company's "reach" on Facebook declined 40% to 50% after the change. Another source from a different online retailer said that since Facebook's change, her company's posts are getting seen by an 80% smaller audience. 

We asked several sources close to e-commerce companies about this trend, and almost all said they'd seen the same pattern.

All the retailers we spoke to emphasized that their actual sales have not declined since Facebook made the change. But each said they've only been able to maintain sales by increasing the amount of money they spend on Facebook ads.

On some level, you have to admire what Facebook has done here. It spent years making itself a free and easy place for business to market themselves or sell actual products. Then, as soon as these businesses grew addicted to Facebook's users, Facebook began charging for access to them.

Stashed in: Facebook!, Zuck!, Social Media, Advertising, Monetization

To save this post, select a stash from drop-down menu or type in a new one:

The word that comes to mind is ruthless.

Facebook is ruthless in using what it has.

You May Also Like: