As I sit comfortably on my couch browsing through Facebook, I notice that my newsfeed had changed considerably. The posts by brand pages' that I have liked don't necessarily appear on my timeline and one of the brand pages, which 17 of my friends 'like' repeatedly, appears with the 'Like' button. When I look closely it states 'Sponsored'. The platform's newsfeed is changing fast with more and more ads appearing.
Facebook rolled out its ad products in late 2007. These included Pages and Social Ads (which appear either within a user's newsfeed as sponsored content or in the ad space along the left panel of the site). The platform, in its initial years, was fairly open providing organic reach to its advertisers but as the user base became strong, especially in India, Facebook tweaked its advertising and monetisation strategy, tightening the rope around the organic reach of brand posts.
India with 125 million active users' (as of June 2015), is Facebook's second biggest user base in the world, after the US. Facebook claims to have 2.5 million advertisers globally, however in terms of advertising it has struggled in India. The company does not reveal its India specific earnings, or what the country specific ARPU (average revenue per user) is. According to the earnings posted by Facebook on NASDAQ, its Asia Pacific ARPU was only $1.25 in Q2 2015 compared to the US and Canada which contributed $8.63.
As a result, there is a major push by the social media giant to lure advertisers and brands into using its platform. Facebook recently announced a new ad product 'TRP (target rating points) Buying' where marketers can buy and measure Facebook video ads using target rating point (TRP) as the metric. The system will work in partnership with Nielsen's Digital Ad Ratings division, which will verify how well the social site's video ads perform in addition to TV spots. It even launched a missed call ad unit specifically designed for India in July 2014. When users see an ad on Facebook, they can click and place a missed call from their mobile device. In return, they get info like cricket scores, celebrity messages or a message from the advertiser. So, how are brands adapted to its changing policies and algorithms?
In India, Facebook usage by brands picked up in early 2008 when the latter started using the platform's 'Pages' to build a loyal fan base. The omnipresent 'Like' button was then called 'Become a fan'. Globally, there were a plethora of successful brand pages engaging with their fan base and Indian brands started following suit. "The focus then," says Rajiv Dingra, founder and CEO, WAT Consult, "was to build a community of consumers and engage with them." Brands concentrated on contests which were experimental and created engagement among consumers. Organic reach was at its peak and there was a mad rush from brands to garner the maximum number of likes which they wore as badge of honour.
Telecom players were spending money on Facebook and creating interesting campaigns. Virgin Mobile's 'Indian Panga League' launched during the IPL 3 was one such. The campaign engaged the youth with new pangas and hatke takes on the game. Executed by WAT Consult, over 100 unique films of 15 seconds were created and promoted on Facebook. The mobile brand garnered over 3,000 fans on Facebook.
Another popular campaign was Intel's 'Mueseum of Me' an interactive film that generated personal museum exhibits of the user by connecting to Facebook. It was done by visualising elements such as your Facebook friends, photos and likes; it revealed who you are as a reflection of your social graph. The experience attracted over 10 million people globally.
By 2011, there were a large number of brands with a Facebook presence and the space was becoming increasingly cluttered. Industry experts started lamenting the 'Likes' theory, urging brands to actively engage with their fan base. "Social was being used for engagement and not to drive reach. Hence, the content created was far more edgy and brands were experimenting with it. I do not think there was a share feature at that time. The Facebook layout was different too," recalls Nimesh Shah, head, Windchimes Communications.
In 2012, Edgerank (the algorithm used by Facebook) revealed that only 15-16 per cent of a brand's fan base (who interact with the brand most) gets to see the posts uploaded by the page. If one wants to reach the fans beyond this number then they need to pay for it through Facebook's newly introduced product 'Sponsored'.
During 2012-2013, there was a major focus on creating campaigns around Facebook Apps and promoting their posts in the user newsfeed. By this time, organic reach started declining and Facebook lured advertisers with the Sponsored stories feature that allowed ads to appear on a user's newsfeed. So if a friend of yours likes, say, Flipkart, his or her face now starts showing up next to an ad for that brand's semi-personalised post in your newsfeed. The in-stream sponsorships provided a model for mobile advertising, which became a huge priority at Facebook in 2012.
Therefore, a large part of brand's budget on Facebook shifted from page management and user acquisition (likes) to post promotion or creating Sponsored stories. At that time, big brands across categories were pumping money into Facebook campaigns. Examples include sportswear brand Reebok India's 'Flex a Move' flash mob campaign that was specially created in 2012 by Isobar for its 1.5 million Facebook community.
Another campaign in 2012 was from Star World India for MasterChef Australia. Called the Social Buffet, the campaign was created by Grey Digital. STAR launched a Facebook App Game that requires netizens to don the chef's hat. Fans were assigned a virtual 'kitchen' and prompted to create a buffet. Social Buffet has seen over 75,000 game plays, with more than 5,000 dishes being dished out.
In 2013, a traditional advertiser like Surf Excel launched the TV Off-Life On campaign on Facebook. The campaign aimed to create dissonance about TV viewing habits in children and was launched in association with Techshastra, a digital agency, which came up with an app on Facebook to promote the idea. Unconventional advertisers like Tupperware India also came on Facebook creating - She Can You Can Facebook app which aimed at promoting women entrepreneurs.
By 2014, Facebook became a formidable force in the social media space. There was an aggressive push by the social media platform to reach out to brands and ad agencies. It can be dubbed as 'Premium' model where the advertisers need to spend money to reach their consumer base. Facebook was being accessed heavily on the mobile and the struggle for the attention span of consumers or being spotted by them in the newsfeed became a daunting task for brands.
Quality took over quantity when it came to a brand's content strategy. Meanwhile, in November 2014, Facebook officially announced trimming down 'pushed' or 'promoted' ads on user newsfeed and significantly curbing the reach of promotional creative. These creatives include posts that push people to buy a product or install an app, to enter promotions and sweepstakes with no real context and posts that reuse the same content from ads.
Starting January this year, Facebook officially started curtailing pushed or promoted posts from company pages on a user's newsfeed. Brands will now have limited ability to promote contests or campaigns, which translate into increased investment to push their message on the user's newsfeed.
"The number of posts that we are doing is going down drastically," informs Pratik Gupta, co-founder and director, new business and innovation, FoxyMoron adding that the brands are now concentrating on the quality of the posts because they come with a price tag. India is a high reach market, where brands are trying to reach 100-200 million consumers. It becomes harder to send the message across. Spending is increasing.
"Brands which used to spend Rs. 1 lakh a month in 2011 are now spending Rs. 10 lakh," informs WAT Consult's Dingra. Small businesses and brands that drive heightened ROI from Facebook like e-commerce players tend to spend more. Traditional advertisers like FMCG tend to keep Facebook as a part of their overall digital media mix, which includes Google and YouTube.
There has also been a clear shift in the way brands are spending on Facebook. Only five per cent of their Facebook budget goes in page management - the rest is for post promotion spends.
Niche brand categories will find alternatives like photo sharing app Instagram (also owned by Facebook) and video streaming app Periscope (owned by Twitter). "Visually rich brand categories like food and fashion are forming niche communities on Instagram and Periscope," points out Gaurav Nabh, head, Quasar Media.
Facebook will continue to flex its muscles trying to roll out performance-based ad formats and enhanced video capabilities posing a threat to its archrival, Google. Amidst all this, the advertisers will have to do the cherry picking on which medium can give off the best ROI.
A Note From the Editor
Earlier this year, when Facebook decided to bring in new volume and content controls for promotional posts, effectively restricting the organic reach of branded content, many marketers and digital agencies cried foul. "Pages that post promotional creative should expect their organic distribution to fall significantly over time" said Facebook at the time. Even today, there's a new blog post nearly every week about why Facebook's 'pay-to-play policy' is a bad thing.
But marketers and their digital partners have adapted to this, in that Facebook is now regarded as yet another 'spot-selling' media platform.. Over the recent past, a large portion of brands' social spend has shifted from page management and acquisition of 'likes' to the creation of sponsored/promoted posts. In fact, an aerial view indicates a ten-fold increase in the Facebook budget of some brand categories over the past few months.
And advertisers have no qualms about admitting this. Just the other day, a tiles brand reached out to our news team regarding a social media-led digital campaign - the four digit figure reflecting the paid reach of the campaign was the first thing on the list of digital impressions.
While adapting one's media plan to the changing media ecosystem is the order of the day, the big question here is: Will creativity suffer now that reach is on sale? There is more than one school of thought on this. Some fear it will; after all, there's less riding on the inherent virality of a post. Others, on the contrary, feel content marketers will now be even more particular about the quality of their posts because, well, they come with a price tag.
Other questions lurk too. Are 'creative' and 'sponsored' necessarily mutually exclusive concepts? Is it time to re-define the terms 'earned media' and 'paid media' in the context of social media?
At the end of the day, though, everyone agrees that great content has the potential to drive virality; no Facebook algorithm can stop it from finding its virtual path.
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