Friday, October 26, 2012

Facebook: UnLike

A number of people have asked me today to weigh in on this article from Dangerous Minds that went 'viral' this week in the Social Media sphere, so I'll try. Richard Metzger is undeniably angered and frustrated by what Facebook has done by forcing the sponsored posts business model: 

“I despise it.” Hear that beleaguered holders of Facebook stock? That kind of talk would make my blood run cold. How many companies can you name that you actively despise?
For online publishers who depend on “page views” to sell advertising against—and who have invested considerable time and effort courting Facebook fans—the company’s new policies are particularly galling: Imagine losing 85% of your inventory and then being asked to pay a daily king’s ransom—more than it’s even worth to you—to get it back!
Netflix was only trying to soak you for another $6 a month, not starve you to death!
First, for the $2000 Dangerous Minds spent on promoting this article, I believe they certainly got their money's worth considering the reach this has had already and is still going strong. Obviously they can't afford that cost on a daily basis however, but in this instance it worked quite fine actually.

Second, Facebook is 'free' for the majority of us, and one side of me says that nothing is ever free and therefore these changes should have been expected someday - maybe just not to such exorbitant rates. (I won't get into Big Data in this article and its value.) As mentioned in the article, the pricing scale needs to be adjusted and fast. Small businesses shouldn't be paying the same as Ford or Nike when deciding to promote posts on Facebook. And Facebook, not exactly hurting for cash presently or anytime soon, should be content with the hundreds, or thousands of dollars smaller businesses will throw their way yearly with a different cost structure, like the one mentioned by Metzger: 
But make no mistake about it. Had Facebook debuted the Promote “option” with a more reasonable rate card that would apply to frequently updated blogs and media outlets—something akin to “book rate” at the post office—we’d have been willing to pay between $7 to $10 a post. Facebook WOULD have made around $2500 to $3000 a month from Dangerous Minds, every month. That’s around $30,000 a year, but apparently the price of a new car is not enough for Facebook to want to cultivate Dangerous Minds as a customer! 
It believe it is true, though, that pulling this 'bait n' switch' on your customers as Zuckerberg has done without sufficient notice or properly disseminated information, is a huge, mind-boggling blunder that is already having unwanted ramifications on a company whose IPO tanked spectacularly. When you have Google+ hot on your tail, what Facebook has done is simply not smart.

Finally, although I have empathy for those small businesses who are now screwed by this new sponsored post deal, I also want to state that even just 8 years ago these same businesses were paying for ads in newspapers, magazines and possibly radio without much complaint as it was simply part of the cost of doing business. The fact that brand page promotion has been mostly free all this time is frankly a miracle. (Again, leaving Big Data out of the equation.)

So, is what Facebook is doing wrong? Partly. Should it be surprising? Not for a publicly traded corporation in a capitalist world. Should small/er business like Dangerous Minds jump ship? No. They might creatively try to provide content that gets spread around without needing to pay simply because their fans love it, and them. There's always a solution, isn't there? 

1 comment:

  1. Well articulated response, and thanks for posting the original article which I had not seen. I feel for the small business/blogger who has to come up with exhorbitant fees to reach a larger audience. I have no problem with them accessing those who have actively 'liked' them. However, as a private, personal user I find the sponsored posts invasive on my newsfeed, like marketing phone calls during my dinner hour (or any time, for that matter). For the phone calls my solution was call display, which has enabled me to ignore almost all calls to my land line. I would get rid of it but for my Luddite husband who is having trouble switching to mobile ;-). I have not been as successful cleaning up my fb newsfeed but am continuing to play with my settings. For now, 'ignore' and 'skip' seems to be the only solution as I scroll along.