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They've actually pulled a bait and switch on small business. First the pages were free and great, then they started to reduce the number of people who'd see yo

by ENGNR 13y ago

They've actually pulled a bait and switch on small business. First the pages were free and great, then they started to reduce the number of people who'd see your posts (fair enough, not everyone can see every little thing) Then they reduced the % of people seeing posts to 3% and less, and really focussed on getting those page owners to buy ads to maintain their previous view numbers. Maybe page owners are paying for now, potentially reliant on traffic, but I don't think they're going to be happy paying forever when free alternatives will crop up again. The traffic quality is reported as being low (many mis-clicks on mobile). If the profit isn't there then business won't be able to afford to pay in the long run. Maybe I don't want to see posts for 'Jim's oil change' every three seconds, but good content is getting cut away also making FB far more boring.

Silhouette 13y ago
I don't know if I'd call it a bait and switch, because you never really knew exactly what you were getting with Facebook anyway. The kind of auction system they use is practically designed to avoid transparency (and they're obviously not alone in that among on-line ad platforms). It always comes down to the numbers, though. If we're advertising a small business on Facebook, and it generates more in revenues from sales than it costs in customer acquisition, it's still a net win. Is it the best place we could have invested those advertising funds? Maybe, maybe not, but it certainly becomes less attractive as their cost-per-whatever figures go up, and no matter how much they fudge the presentation, we still know how much we paid overall and how much revenue we got in return. In any case, every time this comes up there are plenty of posters who have small businesses and make the above argument, but generate revenues in the 100-200% bracket, i.e., they're at least breaking even and maybe doubling their investment, but no-one's buying the private jet and yacht any time soon. It doesn't take anything shady-sounding like a bait and switch for Facebook to lose all of that business, it just takes increasing cost-per-whatever a bit more until the return on investment is no longer a safe bet. At that point, they lose to other options with either generally better returns (so you don't care about the odd few percent, because you know you're still comfortably winning overall) or a more predictable model (so you can still run it on tighter margins).
- rahimnathwani 13y ago
  Small nitpick: "generates more in revenues from sales than it costs in customer acquisition, it's still a net win" This statement ignores the marginal cost of sales. In your oil change example I have to deduct the cost of the oil from my revenue, before I compare it with customer acquisition cost. (Of course, attribution of new customers to particular sources is not always easy, either, particularly if you might have gotten that customer even if you had ceased to advertise.)
- mrtron 13y ago
  I think the details matter here. The bait and switch being referred to is in regards to engaging with followers, not the ad platform directly. Businesses grew their followers on Facebook over the years with the intention of growing a user-base they could engage with. Now a substantially lower number of your followers see content you post due to algorithm changes. The way to increase your reach to your followers is by paying for ads to basically recapture the engagement you were once getting free. It would be like if Twitter started charging businesses to display tweets to their own followers.
  - Theodores 13y ago
    Or if Google started to only show you in organic search results 3% of the time.
    - dchuk 13y ago
      Well Google has basically done that by filling up the search results with additional pieces like ads, images, news, maps, local results, etc. Organic results practically don't exist anymore above the fold.
      - GenerocUsername 13y ago
        Yeah, I can never find what im looking for on google /s
  - Silhouette 13y ago
dchuk 13y ago
Facebook has a pattern of opening the flood gates on new features to gain massive adoption and then closing those flood gates so they can profit from them. Not necessarily an "evil" move on their part, though it is annoying. Remember when apps came out and developers could spam the crap out of their user's walls and message all their user's friends? They let that slide for a while, probably to watch how people adopted the platform, then locked it down once they themselves had locked down tons of app developers on their platform. Likewise with ads initially. You could get away with basically anything at first, running iffy ads to iffy landing pages, cloaking, buying cheap ass likes for fan pages you could then drop affiliate offers onto. They let that slide for a while until marketers became dependent on their platform, then yanked the rug out from under them and made it much harder to get away with any of that stuff.
prostoalex 13y ago
This is a natural progression in any social network as people friend more people and follow more pages. If you go from a time point when there were 3 television channels to a point where there are 500, have the original 3 channels pulled a bait-and-switch on you by promising "national audience"?
- thesis 13y ago
  What? Apples and oranges. More people watching TV means more people wanting different things. If I like something on FB, I don't want FB deciding for me if I want to see it.
  - prostoalex 13y ago
    > More people watching TV means more people wanting different things. If a social network user likes your page and your page only, he'll see 100%. As soon as another page enters the mix, your reach will drop correlated to that other page's posting frequency (local pizza shop - you'll likely still get user's eyeballs, New York Times or Reuters - your updates might get drowned in that other page's updates). A year ago an average US user was following 70 pages http://allfacebook.com/how-many-pages-does-the-average-facebook-user-like_b115098 http://allfacebook.com/how-many-pages-does-the-average-faceb... but the number was growing, no doubt inspired by ad campaigns on TV and in storefronts.
brokentone 13y ago
What free alternatives will crop up? They have the critical mass of userbase. There is no advantage for a user to go to a place that has freer promotional space, in fact, there may be a disincentive there.
- NicoJuicy 13y ago
  Free alternative, email. Userbase : 99,9% of the internet users.
  - brokentone 13y ago
    You know a small business with 99.9% of all user's email addresses??? While many businesses have email newsletters, I think people are less willing to connect there (it's more obvious it's marketing, and how can I make it stop?).
    - NicoJuicy 13y ago
      If people follow your email newsletter, they are interested. The ones that unsubscribe, no problem. Then you know that: - Newsletters aren't interesting - He is not interested
vacri 13y ago
Veritasium on youtube has a couple of videos breaking down the numbers - not only do you have to pay to get views now, but the views delivered above and beyond what you usually get are fraudulent. He showed the usage of his page beforehand, with users clustered in Western countries, generally 20-40% of whom interacted with his page in some way. After paying for more views, they were all from developing countries, a profile of users he'd never seen before with very little (0-1%) engagement with his page. It's worth checking out his videos if you want more detail on the patterns he found. It's pretty clear that it's fraudulent. https://www.youtube.com/watch?v=l9ZqXlHl65g (explores problems he sees with FB as a marketing platform) https://www.youtube.com/watch?v=oVfHeWTKjag (massive influx of unengaged developing-world pageviews)

by ENGNR 13y ago

Silhouette 13y ago

I don't know if I'd call it a bait and switch, because you never really knew exactly what you were getting with Facebook anyway. The kind of auction system they use is practically designed to avoid transparency (and they're obviously not alone in that among on-line ad platforms). It always comes down to the numbers, though. If we're advertising a small business on Facebook, and it generates more in revenues from sales than it costs in customer acquisition, it's still a net win. Is it the best place we could have invested those advertising funds? Maybe, maybe not, but it certainly becomes less attractive as their cost-per-whatever figures go up, and no matter how much they fudge the presentation, we still know how much we paid overall and how much revenue we got in return. In any case, every time this comes up there are plenty of posters who have small businesses and make the above argument, but generate revenues in the 100-200% bracket, i.e., they're at least breaking even and maybe doubling their investment, but no-one's buying the private jet and yacht any time soon. It doesn't take anything shady-sounding like a bait and switch for Facebook to lose all of that business, it just takes increasing cost-per-whatever a bit more until the return on investment is no longer a safe bet. At that point, they lose to other options with either generally better returns (so you don't care about the odd few percent, because you know you're still comfortably winning overall) or a more predictable model (so you can still run it on tighter margins).

rahimnathwani 13y ago
Small nitpick: "generates more in revenues from sales than it costs in customer acquisition, it's still a net win" This statement ignores the marginal cost of sales. In your oil change example I have to deduct the cost of the oil from my revenue, before I compare it with customer acquisition cost. (Of course, attribution of new customers to particular sources is not always easy, either, particularly if you might have gotten that customer even if you had ceased to advertise.)
mrtron 13y ago
I think the details matter here. The bait and switch being referred to is in regards to engaging with followers, not the ad platform directly. Businesses grew their followers on Facebook over the years with the intention of growing a user-base they could engage with. Now a substantially lower number of your followers see content you post due to algorithm changes. The way to increase your reach to your followers is by paying for ads to basically recapture the engagement you were once getting free. It would be like if Twitter started charging businesses to display tweets to their own followers.
- Theodores 13y ago
  Or if Google started to only show you in organic search results 3% of the time.
  - dchuk 13y ago
    Well Google has basically done that by filling up the search results with additional pieces like ads, images, news, maps, local results, etc. Organic results practically don't exist anymore above the fold.
    - GenerocUsername 13y ago
      Yeah, I can never find what im looking for on google /s
- Silhouette 13y ago

dchuk 13y ago

Facebook has a pattern of opening the flood gates on new features to gain massive adoption and then closing those flood gates so they can profit from them. Not necessarily an "evil" move on their part, though it is annoying. Remember when apps came out and developers could spam the crap out of their user's walls and message all their user's friends? They let that slide for a while, probably to watch how people adopted the platform, then locked it down once they themselves had locked down tons of app developers on their platform. Likewise with ads initially. You could get away with basically anything at first, running iffy ads to iffy landing pages, cloaking, buying cheap ass likes for fan pages you could then drop affiliate offers onto. They let that slide for a while until marketers became dependent on their platform, then yanked the rug out from under them and made it much harder to get away with any of that stuff.

prostoalex 13y ago

This is a natural progression in any social network as people friend more people and follow more pages. If you go from a time point when there were 3 television channels to a point where there are 500, have the original 3 channels pulled a bait-and-switch on you by promising "national audience"?

thesis 13y ago
What? Apples and oranges. More people watching TV means more people wanting different things. If I like something on FB, I don't want FB deciding for me if I want to see it.
- prostoalex 13y ago
  > More people watching TV means more people wanting different things. If a social network user likes your page and your page only, he'll see 100%. As soon as another page enters the mix, your reach will drop correlated to that other page's posting frequency (local pizza shop - you'll likely still get user's eyeballs, New York Times or Reuters - your updates might get drowned in that other page's updates). A year ago an average US user was following 70 pages http://allfacebook.com/how-many-pages-does-the-average-facebook-user-like_b115098 http://allfacebook.com/how-many-pages-does-the-average-faceb... but the number was growing, no doubt inspired by ad campaigns on TV and in storefronts.

brokentone 13y ago

What free alternatives will crop up? They have the critical mass of userbase. There is no advantage for a user to go to a place that has freer promotional space, in fact, there may be a disincentive there.

NicoJuicy 13y ago
Free alternative, email. Userbase : 99,9% of the internet users.
- brokentone 13y ago
  You know a small business with 99.9% of all user's email addresses??? While many businesses have email newsletters, I think people are less willing to connect there (it's more obvious it's marketing, and how can I make it stop?).
  - NicoJuicy 13y ago
    If people follow your email newsletter, they are interested. The ones that unsubscribe, no problem. Then you know that: - Newsletters aren't interesting - He is not interested

vacri 13y ago

Veritasium on youtube has a couple of videos breaking down the numbers - not only do you have to pay to get views now, but the views delivered above and beyond what you usually get are fraudulent. He showed the usage of his page beforehand, with users clustered in Western countries, generally 20-40% of whom interacted with his page in some way. After paying for more views, they were all from developing countries, a profile of users he'd never seen before with very little (0-1%) engagement with his page. It's worth checking out his videos if you want more detail on the patterns he found. It's pretty clear that it's fraudulent. https://www.youtube.com/watch?v=l9ZqXlHl65g (explores problems he sees with FB as a marketing platform) https://www.youtube.com/watch?v=oVfHeWTKjag (massive influx of unengaged developing-world pageviews)