Are Facebook Ads Worth it Anymore?

by SamuelWood on 07/25/2015

“Dear Facebook. When we first met, you made us feel special. We’d tell you a super funny joke and you’d tell all our friends and then everyone would laugh together. But now? Now you want us to give you money if we want to talk to our friends” — Eat24

Since December 2013 the organic reach for posts on Brand pages has fallen dramatically due to deliberate tweaks Facebook have made. This is somewhat controversial as Facebook have continuously reinforced the importance of likes on business pages and sharing frequent updates with your community.

Over the past few years business owners have worked hard to build a fanbase on Facebook and are now being told they have to pay to get their posts in front of their fans. The graph below shows just how steep the decline has been.

This decline in organic reach affects the value of a ‘like’. In theory a page like is simply one additional follower of your brand who will potentially see your updates. But If organic reach is down by 50% this means you’d have to get twice as many likes to reach the same amount of people. 

Above we can see that the average organic reach has dropped from 12% to a single figure of roughly 6%. This is a 50% decline. However, we can also see that the stock price has risen from around 45$ to approx 67$. A 48% increase.

The official statement pushed out by Facebook explaining the declining post reach states that “There is now far more content being made than there is time to absorb it. On average, there are 1,500 stories that could appear in a person’s News Feed each time they log onto Facebook”. The argument Facebook are putting forward is that the amount of content being shared exceeds the amount users can realistically consume. This excess supply of content causes issues such as: what posts to display, who to display them to and how to rank posts for relevance.

On the flip side, it is extremely interesting to see the financial benefits of this move by Facebook. By forcing business owners to pay for post reach, Facebook have carefully carved out yet another way to increase an already profitable revenue stream. This combined with Facebook’s recent announcement that like-gating is officially banned means that this will constrain organic reach even further.

What are the next steps for Business owners and Marketers?

As Matthew Barby put it: “The main takeaway here is that it’s becoming much more difficult (and expensive) to acquire new fans, and it’s becoming much more difficult (and expensive) to reach those fans.”

One reasonable solution is to alter your current customer acquisition strategy. This can be achieved by simply switching your campaign type from ‘targeting page likes’ to ‘targeting direct traffic’ to your website. By doing this you bypass the problems of organic reach. You can take this a step further by optimizing your website for email collection and then using your mailing list as an alternative platform to reach 100% of your subscribers.

Another, more drastic, approach a company called eat24 have taken is to completely abandon ship. They recently published an open breakup letter to Facebook declaring the end of their relationship. Explaining the reasons for the breakup and how they’ve fallen ‘out of love’ with the platform. Although it is extreme, this is definitely a feasible option as Facebook clearly don’t have small biz owners best interests at heart.

But that being said.

There must surely come a point where all: entrepreneuers, marketers & business owners need to ask themselves..

Is it financially viable to continue investing in Facebook for an ever diminishing ROI?