$3 CPM is far more expensive that generic Facebook adverts (known for being very cheap in terms of CPM), and it's a fairly typical price for digital advertising. Obviously it depends on the industry, the audience, etc. etc. but $3 is fairly common.
The reason it feels like such a terrible deal here is that you aren't paying $3 CPM to reach a new audience, you are paying $3 CPM to reach your audience. Sure, Facebook can argue "it's the most targeted audience possible, they're Mavericks fans!" but the counter to that is "of course they are, it's my brand that put this audience together".
Brands use Facebook because it's far more user-friendly than trying to collect your fans together on your own website, and therefore it's a better solution - easier for your fans means more will do it, so you have more people to market to. However the comparison is that they're people who have chosen to subscribe to you, and therefore the pricing comparison is not to digital advertising, but to writing to fans on a website, or a blog, or through email newsletters. This is why it feels like, and arguably is, a rip off.
As to the argument that it's needed from a user's point of view and that Facebook happens to be able to monetise to help their users (e.g. jeffwidman's comment: http://news.ycombinator.com/item?id=4785852) I'm not really sure. It's probably a valid point. I'm not a Facebook user myself (but my marketing work occasionally covers Facebook), my personal feeling is that if I follow a brand it's because I want to see their updates. All of their updates. In my head, it's the same as signing up to a newsletter, or subscribing to an RSS feed, just through a convenient third party. But as I don't do it myself, I'm happy to consider myself wrong, or in the minority, maybe if I was an active user following many brands that I care about I would find that getting 100% of their messages would ruin my Facebook experience.
One note: the $3 I noted in the article actually isn't CPM, it's Cost-Per-Reach, or Cost Per Unique Impression. This is an important distinction because most digital/display advertising functions on a CPM basis, where one person might see an ad multiple times. On Facebook, when a Page promotes a post, that post is only displayed to that user once.
Brands have a tendency to abuse the trust of someone opting-in, whether that's on Twitter, Facebook, Email, etc. When this happens, most people aren't aware enough to understand the cause and effect - instead of blaming the brand for being spammy, they get frustrated with Facebook.
The News Feed Algorithm and Sponsored Stories are Facebook's way of ensuring a better user experience. By pushing brands to pay a small price for distribution, Facebook gets brands to think about what they're publishing and to take advantage of the targeting options that Facebook makes available, so that their content reaches the right people.
Make brands pay so that they think about what theyre publishing? Ridiculous. Ive got 3 million fans on facebook and my reach has gone from 8 million per week to 2 million. Posting the same type of content ive always posted. Its not a question of posting better things in order to maintain the reach i had before. Ive been doing this for three years and the switch that fb turned off two months ago is just a nasty way of saying thank you to the content generators that gave them billions of pageviews during the past years.
A sponsored post can stick around for a while. But in any case, if a user doesn't come they don't charge. It's exceedingly unlikely that 100% of your followers will see a post, but you don't pay for that.
One thing to note, when you said "my personal feeling is that if I follow a brand it's because I want to see their updates", the tricky think about facebook is that you don't "follow" a brand like you do on Twitter, you just "like" them. In my opinion, it's a small but important distinction. Just because you enjoy a certain brand doesn't mean you actually want to know every little thing they're doing.
Exactly. At first I was all "I'll like every FB page of things I like in RL". But then I was getting annoyed at some of the crap that these pages were putting into my feed so I "unliked" pretty much everything. I wish there was a way to "like" something so that it is reflected in your interests and what not, but NOT get their updates. Maybe there is and I haven't seen it.
When you click to remove a post from your newsfeed, facebook prompts you with "unsubscribe from this page's updates" — there's also a tab in the top right of these stories (and of people's updates) that allows you to set the frequency you receive news from them.
Yeah, great point here. Facebook really emphasized this difference awhile back when they started allowing users to "Like" a Page, but then choose to hide it from their News Feed.
This allows me, as a Facebook user, to complete my profile and declare that I like something, even if the marketing that the associated Page is doing isn't something I want to see.
This ensures that profile information remains accurate, which is critical for ad targeting - people don't start unliking things they actually like, just to avoid annoying marketing. The interest graph remains intact even when brands make poor marketing decisions.
Do people associate liking things with "completing their profiles"?
Maybe I've been on the other side for too long, but I equate liking a page with opting into their facebook marketing content, and I unlike if I want to opt out.
Yes, that's how FB poses it, as part of your profile. For instance, "What music do you like?" You type in some groups, and that counts as liking them. Suddenly, you get to see news about each concert, blu-ray, etc. they're doing, right in your feed. Not a great experience.
I'm not sure why anyone would assume a very casual social "hey I like X" is equivalent to "subscribe".
People make that assumption because facebook is filled with social people rather than anti-social people who worry that someone they 'like' might actually talk to them.
In normal social circles there an expectation that the you want to hear about things you 'like'. For instance if in real life I have a friend who 'likes' classical music then when I hear something about classical music I will talk to them about it.
Also like is not like subscribe because the idea behind subscribing is that you receive everything. For instance if I 'subscribed' to a magazine I would be rather upset if they only sent me every 7th issue, or only sent me issues when the newspaper had not arrived.
> Just because you enjoy a certain brand doesn't mean you actually want to know every little thing they're doing.
Twitter is more obvious semantically, but heavy Likers of brands on Facebook already understand the implication, and increasingly so will everyone else, regardless of the terminology. For me it's basically to the point where I only Like things that are owned or run by people that I actually know.
I never liked anything on facebook (via a 'like' button) but I do have several likes.
Before the facebook feed , before even the facebook wall, the personal information field of your profile was a text blob. Over time facebook parsed this information and matched it to pages, giving me likes.
Now i get updates from films in my feed because 7 years ago I added them to a text field called 'movies/tv'
Doesn't bother me because I hardly use facebook anymore. But it is interesting to think how it has changed.
No, you're paying $3 CPM to reach Facebook's audience. They own the platform. You're just visiting. And nobody rides free. The price for the users is to be spammed and data mined. The price for advertisers is to pay cash.
So what? Those other marketing channels, like TV, newspaper advertisements, and so on, aren't free. And neither is Facebook.
I'm sure that Mark Cuban's hockey team drives a lot of viewers to watch TV. Does that mean Mark should get to advertise for free on television? That's not how the networks see it. [edit: this is a really bad example]
It's funny that we've gone from being outraged about spam and all-pervasive advertising, to being outraged that spammers have to actually pay to send the stuff.
That's a pretty insightful comment. I think it really gets to the heart of the issue-- Mark brings a lot of value to the TV networks, but not that much to Facebook. And Facebook knows it.
Brands need a Facebook presence more than Facebook needs a brand to drive and keep a user on Facebook is why brands will never get kickbacks for maintaining their Facebook page.
Fact Check: The fans on the Facebook pages were driven there by the page owner, likely through other marketing channels such as TV. It should be a mutually beneficial relationship, though Facebook is trying to take advantage of that relationship now. Companies and people are mobile on the internet. They can drive people wherever they want. Mark Cuban's action is a huge signal. As I said in another reply somewhere, Facebook is essentially providing a newsletter service with pages (plus some other stuff). Oh, and Facebook also has ads on these pages.. Something better will come that doesn't abuse the relationship.
I disagree with the whole idea that the "Like-gate" is a problem. Fans of Facebook pages are not necessarily fans. They are people who have happened to click "like" on the page at some point. There are various reasons why people do so:
* perhaps they want to add their interests and likes to their profile, to show their friends what sort of music they listen to.
* perhaps they want to increase the like count of an issue they care about at a "single click worth".
* or perhaps they actually want to receive updates on the topic.
None of these automatically mean that they want to receive updates on the topic so much, that it should be among the top-10 news items of the day compared to their friends' posts. A "like" is much more effortless and not comparable to signing up for an email newsletter.
I don't see Facebook trying to make maximum money from pages with the newsfeed filtering, I see them trying to improve and spam-filter the content of the newsfeed for the benefit of the users. The "like-gate" scandal seems very similar to the SEO-community outrage every time Google changes their ranking algorithm - a community that forgets that if their pages got pushed down, someone else's probably more relevant page got pushed up.
I agree with you that the spread of fanaticism will vary per user who's liked a page. I disagree that Facebook isn't trying to see how much they can charge to let brands get access to these individuals who maybe have a slight interest - whereby these 'Likes' could have been gathered on a separate platform that wouldn't now manipulate the fluidity/friction that exists with reaching all of those users.
Agreed. Most companies seem to be oblivious to the reality that they spent money to get people to like them on Facebook and they own nothing as a result.
I believe this is called insanity!
A direct email campaign would have been cheaper (MailChimp quotes <$2500) and more effective. Despite the social media hype, we keep seeing statistics that support direct media when communicating with existing clients.
How is the relationship suppose to be beneficial to Facebook? No one signs up for Facebook to keep in touch with their favorite brands, they sign up to keep in touch with friends. Facebook allows brands to communicate to their users but their added benefit hardly helps FB at all. The only way it does help Facebook is if they monetize these relationships, which is what Facebook is attempting to do. I'm not sure there is legit proof that FB has decreased Fan Page outreach organically (the only way you could claim they're "abusing" the relationship - I don't see an issue with FB charging brands to reach more fans non-organically.
Mark Cuban isn't God, I don't think this is a "huge" signal at all. IMO, Cuban's critiques of YouTube have been similar - which I feel have also been proven wrong with time.
Brand pages are content for users, and it keeps people on Facebook instead of seeking out the brands and interaction elsewhere. There is no reason brands need to be on Facebook. If it now means being charged $3,000 to temporarily reach 1 million fans (and who knows of what quality level or fanaticism level) then they may question if it's worth it to them, and they are starting to. These brands who built up millions of likes on Facebook could just have a different system, that doesn't need to be connected to a central platform.
They are doing it the wrong way, though I don't care to help Facebook so I won't comment here as to how they should be doing it.
Also, the term organic vs. non-organic -- the posts that reach a person's feed, organically, is set by the algorithm Facebook determines; It's not so organic.
Organic in the sense of how it's used in the industry. Google's search algorithm is set by Google but when talking about the search results people tend to differ between "organic" and paid.
The difference here is that "organic" is considered Google's and Facebook's best attempt to show their user what is most relavent to them. Some speculate that both companies are modifying these results to optimize paid results but there is no smoking gun that is true.
I didn't have sympathy for Facebook when their traditional ads turned out to be worthless and the price fell through the floor. Likewise I don't have sympathy for businesses who feel entitled to free distribution on Facebook and don't like it when Facebook tries to monetize.
The bottom line is that people don't come to Facebook because of brands. Rather brands come to Facebook because that's where the people are.
The fact that at one point a business convinced a user to click a Like button does not provide anything approaching a symmetrical benefit to Facebook. Sure, Facebook is always happy to add content, but that marginal value of that content is nowhere near as important to Facebook as the distribution is to the brands. Facebook's primary asset is an engaged user base, and it's the social exchange that engages users. Meanwhile if businesses are pursuing any social media strategy, where can they get anything approaching the reach of Facebook? Even if another startup comes up with the reach, they'll be in the same monetization boat as Facebook and certainly will make decisions that piss off someone.
It's not really free distribution though. People are on the internet, and Facebook is on top of the internet; People aren't stuck on Facebook. I disagree with the importance to Facebook of having brands integrating with Facebook. A 'Like' button on a brands' website is extremely valuable to Facebook's brand, to strengthening that ecosystem, etc. - and is one mechanism the brand used to promote Facebook and getting them into their 'live newsletter.'
Facebook alone didn't cover all costs of bringing users, and keeping them, on the platform. Businesses spent money too, marketing dollars, marketing space, etc..
Businesses run based on numbers. If a Facebook ad converts at a profitable ROI, then many businesses will buy the ads no matter how poorly they have been treated.
Users are different. If they feel slighted, they will disappear. Facebook is right to focus on the user experience at the expense of antagonizing advertisers.
Whether Facebook could have implemented this without pissing off so many people, now that is a different story.
> Whether Facebook could have implemented this without pissing off so many people, now that is a different story.
History seems to indicate that Facebook can NOT change a single thing without pissing off a lot of people. Every time they do a major update... the Internets go crazy. I've been guilty of that. I still hate Timeline... but I haven't left Facebook yet. :)
This isn't true. The user experience is far worse now that they've monetized the news feed. I see far more ads than I used to, often for things I am uninterested in.
The FB experience is getting worse by the day for users and advertisers.
Actually, as a user I'm annoyed by this as well. When I like a page it's usually because I'm interested in what they have to say.
I really want is control of that myself. Default me to everything and I'll "show less from this page" or unlike if they are spamming me.
Some companies and organizations are using Facebook to communicate with me and Facebook is deciding what I'll see or not see.
THAT is Cuban's real problem. You can't reach all of your audience without coughing up a fairly large amount of money because Facebook has decided not everybody wants to see your message.
We live in an attention economy, and Facebook is simply the arbiter of it. If Facebook let all fan pages reach all their fans, it'd be a sub-optimal user experience.
The fact that they have turned protecting against the tragedy of the commons into a monetization model may not make brands happy, but it makes users happy.
I simply don't get why brands view Facebook subscribers as being opted in to 100% of their constant barrage of spam. Facebook pages have never worked like an email subscription list, and that fact should be obvious to anyone with any knowledge of the platform.
Someone might follow your brand on Twitter, but if he doesn't check his feed for a while, he doesn't see your marketing-speak unless he goes looking for it. Unlike Twitter, Facebook actually tries to be intelligent and show you the stories you care about instead of defaulting to chronological order only. Since, shocker of shockers, people generally prefer to engage with their fellow human beings as compared to these quirky entities we call "brands," the stories you care about are more likely to involve an old friend getting married or your buddy's weekend pics than whatever inspirational message your social medial engagement intern shat out this hour.
Basically, Facebook is treating brands a lot like people: not all their friends see all their content in their newsfeeds, but some do, and higher engagement and closer connections make it more likely that someone will see your stuff. Brands, naturally, don't want to play by the same rules as us mere mortals and want all of their "content" displayed prominently in their subscribers' newsfeeds. In other words, it's Citizens United v. FEC all over again, except no one is actually limiting corporate speech here, just asking brands to pay rather small amounts if they want more reach and distribution than the rules allow.
To sum it all up for Mark Cuban: the mere fact that someone has liked the Mavs on Facebook does not mean that she wants to hear whatever your marketing interns come up with every couple of hours. The obnoxious guy who talks about himself all the time doesn't automatically get a free megaphone to beam his messages into the minds of everybody he's engaged with. I realize that you, Mr. Cuban, have made a career out of being precisely that guy, and that people do walk around hanging on your every word, but us normal people and normal brands have to pay for our promotion, and it's unreasonable to think otherwise.
AOL, Friendster, Myspace, now FB.. They never monetize because the model can't support itself properly or at least it won't make a trillion dollars like one might expect to with a billion users. If they really wanted to monetize they should just go the linkedin route and charge $1/month for it. If you're not willing to pay that much for FB then what's the service really worth to you?
$38 -> $22 - Need I say more? Zuckerberg reminds me of that guy Steve (Edward Norton) in the Italian job. Clever as he might be - he's just got no imagination.
I think both positions (Mark's & brendanib) are oversimplifying (and hyping) the issue. End of the day, what matters are the relationships formed between people and brands. And like all advertising, paying to get in front of people is how the game works. If you'd rather pay money to initiate those conversations, then pay for them If you want to be engaging enough to draw people into those conversations, then invest in that.
I find it incredibly amusing that a statement by an experienced businessman who has decided to share some of his hard-earned earned insight into a product is being treated this way. I'm inclined take the opinion of someone who's got his mind on his money and his money on his mind more seriously than a blog post by a social media marketing firm.
er, he's responding to Mark Cuban's public statements. If Person X says A, it's not exactly unreasonable to write an article titled "Why Person X is wrong about A," even if you have a business that involves A. Like Cuban, the author of the blog post clearly has a point of view on the subject, and we can all evaluate their competing arguments.
I think I would probably talk to my mother before writing a blog post publicly disagreeing with her, but I just don't see what's so insulting about disagreeing with Mark Cuban's own public statements.
I'm curious as to why more brands don't just use 'groups' instead?
I'm in a couple of groups that are basically companies and I get all their status updates as well as the ability to turn on or off notifications for them (one I keep on because I really like the company).
When you're used to paying nothing anything more is hardly seen as a bargin. This is the core issue. It will just take time before brands get used to paying for what they once got for free.
On the other, who better to say "You just don't understand the power of the platform" than someone who sees the numbers on over 10,000 Facebook pages with more than 1Billion Facebook fans?
If Cuban said "I don't understand the platform" that's one thing, but saying "This platform doesn't work" is claiming it's not an education problem, it's a platform power problem
This is a fair point, but I think its also fair for the parent to point the potential for bias out, given that some people may have perused the article quickly without realizing that its posted to the blog of a company with a large stake in the issue at hand.
If the brand is using Facebook, Facebook is in the right. It's their platform. They can do what they want. I don't understand why brands feel so entitled.
What the author of the article fails to understand is nothing lasts forever on the internet.
Facebook can become insignificant 1 year from now just because a new service propose better features at a lower price, or just because people get bored...
People used to have email accounts at yahoo , yet , people now prefer gmail because it is easier to use and is less "spammy".
People used to have myspace accounts , and guess what, moved to facebook...
But it's also true that nothing's free on the internet. Twitter is not free , neither is facebook , and as a business they need to generate revenue.
You've missed a couple of points
1. The possibility that Facebook is 'insignificant' one year from now is astronomical. People use Facebook for so many things in their lives including staying in touch, single sign on, games, etc. Even if it somehow cut in half it's still 500m users vs the 3.5m of Myspace
2. The 3000 dollar fee is a fee to reach X number of users now, not one year for now. So if he pays the 3000 now, even if Facebook goes under, it wasn't a loss.
The reason it feels like such a terrible deal here is that you aren't paying $3 CPM to reach a new audience, you are paying $3 CPM to reach your audience. Sure, Facebook can argue "it's the most targeted audience possible, they're Mavericks fans!" but the counter to that is "of course they are, it's my brand that put this audience together".
Brands use Facebook because it's far more user-friendly than trying to collect your fans together on your own website, and therefore it's a better solution - easier for your fans means more will do it, so you have more people to market to. However the comparison is that they're people who have chosen to subscribe to you, and therefore the pricing comparison is not to digital advertising, but to writing to fans on a website, or a blog, or through email newsletters. This is why it feels like, and arguably is, a rip off.
As to the argument that it's needed from a user's point of view and that Facebook happens to be able to monetise to help their users (e.g. jeffwidman's comment: http://news.ycombinator.com/item?id=4785852) I'm not really sure. It's probably a valid point. I'm not a Facebook user myself (but my marketing work occasionally covers Facebook), my personal feeling is that if I follow a brand it's because I want to see their updates. All of their updates. In my head, it's the same as signing up to a newsletter, or subscribing to an RSS feed, just through a convenient third party. But as I don't do it myself, I'm happy to consider myself wrong, or in the minority, maybe if I was an active user following many brands that I care about I would find that getting 100% of their messages would ruin my Facebook experience.