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THE BIGGEST ‘BAIT N’ SWITCH’ IN HISTORY?
This has been brewing since around May. At least that’s when we first started noticing it here at Dangerous Minds and we certainly weren’t the only ones.
Spring of 2012 was when bloggers, non-profits, indie bands, George Takei, community theaters, photographers, caterers, artists, mega-churches, high schools, tee-shirt vendors, campus coffee shops, art galleries, museums, charities, food trucks, and a near infinite variety of organizations; individuals from all walks of life; and businesses, both large and small, began to detect—for it was almost imperceptible at first—that the volume was getting turned down on their Facebook reach. Each post was now being seen only by a fraction of their total “fans” who would previously have seen them.
But it wasn’t just the so-called “fan pages,” individual Facebook users were also starting to notice that they weren’t seeing much in their newsfeeds anymore from the various entities they “liked”—or even updates from their closest friends and family members. Something was amiss, but unless you had a larger “data set” to look at—or a formerly thriving online business that was now getting creamed—it probably wasn’t something that you noticed or paid that much attention to.
When we first noticed the problem, our blog had about 29,000 Facebook “likes.” Our traffic was growing 20% month over month, but our Facebook fans grew at a far faster pace. We were getting hundreds of new ‘likes” every day. Still do. As I write this, our Facebook fans now number over 53,000, not quite double what it was then, but give it another month or so and it will be.
53,000 is a more than respectable number of Facebook fans for a blog that’s only been around for a little over three years. So why is it that our pageviews—our actual inventory, what we sell to advertisers—coming from Facebook shares are off by half to two thirds when the number of new “likes” has risen so dramatically during this same time period?!?!
In a widely read—and widely shared on Facebook—NY Observer article titled “Broken on Purpose: Why Getting It Wrong Pays More Than Getting It Right,” (emailed to me by a friend, a prominent blogger, with the subject line: “Why putting a lot of energy into building a Facebook presence is a sucker’s game”) PR strategist and social media expert Ryan Holiday succinctly laid out the case against the damage Facebook had inflicted upon its most active users with its recently rolled out Promote “option”:
It’s no conspiracy. Facebook acknowledged it as recently as last week: messages now reach, on average, just 15 percent of an account’s fans. In a wonderful coincidence, Facebook has rolled out a solution for this problem: Pay them for better access.
As their advertising head, Gokul Rajaram, explained, if you want to speak to the other 80 to 85 percent of people who signed up to hear from you, “sponsoring posts is important.”
In other words, through “Sponsored Stories,” brands, agencies and artists are now charged to reach their own fans—the whole reason for having a page—because those pages have suddenly stopped working.
This is a clear conflict of interest. The worse the platform performs, the more advertisers need to use Sponsored Stories. In a way, it means that Facebook is broken, on purpose, in order to extract more money from users. In the case of Sponsored Stories, it has meantraking in nearly $1M a day.
I love how Rajaram phrases that so delicately: “Sponsoring posts is important.”
It’s perhaps the most understated stick-up line in history, worthy of a James Bond villain calmly demanding that a $365 million dollar ransom gets collected from all the Mom & Pop businesses who use Facebook. How many focus groups do you reckon it took until Facebook’s highly paid marketing and PR consultants finally arrived at such an innocuous phrase for describing information superhighwayrobbery?
DO THE MATH (!)
At Dangerous Minds, we post anywhere from 10 to 16 items per day, fewer on the weekends. To reach 100% of of our 50k+ Facebook fans they’d charge us $200 per post. That would cost us between $2000 and $3200 per day—but let’s go with the lower, easier to multiply number. We post seven days a week, that would be about $14,000 per week, $56,000 per month… a grand total of $672,000 for what we got for free before Facebook started turning the traffic spigot down in Spring of this year—wouldn’t you know it—right around the time of their badly managed IPO.
Whenever the controversy raging over Facebook’s exorbitant Promote fees gets covered in the media, I’ve noticed that the comments have been very telling. Opinion seems to be about nine to one against it. Some in the “it’s a free country” section of the peanut gallery maintain that the new Promote “option” isn’t extortion, just capitalism, baby, and furthermore that disgruntled Facebook users have the simple option to seek out other venues that are free such as Twitter and Google+
That’s true. They are right of course, in a strict free market logic, but this would be an unsophisticated viewpoint to hold if you are the CEO of a multi-billion dollar concern like Facebook. It surely doesn’t take a Harvard degree, does it, to figure out that Facebook so aggressively angering their user base by inserting themselves into the equation in this way, is perhaps—if only because of the size of the company’s market cap—the single most misguided thing a major corporation has ever deliberatelydone, bar none, in the entire history of American capitalism and the world.
What else would come even close? New Coke?
These comments, from that same NY Observer article, spell out what this all really means and lays bare why Facebook’s ham-fisted money grab is so staggeringly inept:
I run a Facebook page with 15,000 fans. That’s 15,000 people who have consciously signed up for our website updates and want it to appear in their newsfeed. Yet, we’re having exactly the same problem this article chronicles. We’re barely reaching 15-20% of our fan page and we’re sharing stuff that always used to be popular. Facebook for us was always a vehicle to drive traffic to our website (just like our email list, twitter page, etc). It’s become less and less valuable as a tool to do this due to Edgerank and Facebook wanting to charge you to reach the audience you’ve ALREADY paid to reach. It’s a betrayal. It’s just not worth it to pay $100 to reach all of our fans for one article. As a small business, I’m starting to care less and less about Facebook and I’m not alone. They need to get rid of Edgerank and get rid of Sponsored Posts.
A fellow named Bill Downey replied to that comment. Imagine your name is Mark Zuckerberg as you read the following:
I have a similar experience, my page has over 40,000 fans and when Facebook started this the traffic to my website dropped from 30,000 a day to 5,000 a day. I tried paying for extra reach but it’s not worth it for a small site like mine. The fee they charge I can not make up thru ad revenue. It’s probably fine for McDonalds page or Coke who can afford $200 per post for the full reach. I would be all for paying if the cost to play wasn’t so steep, they need to come up with better scaling for the fees for smaller pages. They don’t care about the little guys when they can sock it to the big companies. The worst part of it though is the lying to our fans that sign up to see our content and then never do unless they fall in that 15% group. Facebook has a number of other issues that make most of its users hate it. I know I despise it and I am desperately trying to find a way to replace it for promotion.
“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!
NOT EXACTLY A MONOPOLY BUT, HEY, CLOSE ENOUGH!
Personally, as a publisher of a medium readership blog, I used to get a great deal from using Facebook—but I understood it to be a two-way reciprocal arrangementbecause I was driving traffic back to Facebook as well, and reinforcing their brand awareness with prominent widgets on our blog—but like Bill and Jonathan here, we’re actively seeking out other ways of driving traffic to the site now. With this very post—which will likely be the first and very last thing we’ll ever pay to promote on Facebook—we’re hoping to increase sign-ups to our daily newsletter (sign up at the top of this page), our Twitter feed and our Google+ page.
We simply can’t afford to pay Facebook $2000 to $3200 a day and we can’t afford to do nothing, either. Their shockingly greedy business plan offers us no alternative and we’re not alone. The Facebook management team have obviously never read the classic business motivational parable Who Moved My Cheese? They should buy a few hundred copies and spread ‘em around the office so the behavior of the mice won’t seem so confusing to them!
So we’re doing the $2000 Facebook Promote package for this very post as a one-shot deal. It promises that 1.7 million people—all of our “fans” and also their friends—will see it in their newsfeeds. Will Facebook even allow it past their human approval process for promoted posts? There’s noting in this post that violates any of their policies and guidelines, but how long, I wonder, will they allow it to spread through their millions and millions of data-streams? Will I have “free speech” on Facebook if I pay them $2000? The way I look at it, this is what I have to do to get Mark Zuckerberg’s attention to let him know that he’s killing our business.
It will be interesting to see how this experiment turns out. I hope you’ll pass this along if you find what I’ve written here to be of interest, or if it might be relevant to someone you know. If you want to send Facebook a message, please feel free to use our graphics for your Facebook avatar. I’d like to get our money’s worth! The more of you who connect with us via Twitter, Google+ and our newsletter (sign-up widget at the top of this page), the better.
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! Instead, we’re left with no options save for putting our efforts into Google+, Twitter, and our daily email newsletter.
Ironic, isn’t it, that the one time we’re willing to pay Facebook’s insane rates, is also likely to be the last time we use Promote. We’re even willing to pay them to reduce our dependence on Facebook—how else to regain what they took from us save for a stunt like this one—and so it finally seems that this relationship has gone properly toxic.
NONE DARE CALL IT ANTITRUST?
Consider this, if they’re charging a blog the size of Dangerous Minds $200 per post, what would a major metropolitan newspaper, with dozens of sections and hundreds of individual daily articles and blog posts that relies heavily on Facebook for web traffic, have to pay out to them just to get their old traffic back? It would amount to tens of millions of dollars per year. Facebook are angering not just indie bloggers, small business owners, non-profits and rock bands, but people employed by mainstream media outlets who have seen their hard-earned traffic shrink by as much as 85%. Consider how tenuous it already is to work at a newspaper—where there is about as much job security as there is in seasonal strawberry picking, if not far less—and then the rug gets pulled out from under them like this?
The medium and small blogs are already up in arms about Facebook’s extortionate Promote fees. What’s wrong with this picture from a marketing and public relations standpoint when writers for The New York Times, Washington Post, Gawker, Buzzfeed, Business Insider, Boing Boing, Laughing Squid or Huffington Post begin to “despise” Facebook, too? I wonder what Arianna Huffington and Rupert Murdoch will make of this when it’s brought to their attention? This is a very big deal.
Summing up, Facebook has taken a pee in their own pool from quite a lofty height, turning vast armies of “influentials” against the company, people who are now making plans—born of necessity—to bolt from that pool and to stop putting any effort there. Furthermore, Facebook’s greedy grab will have the knock-on effect of causing many blogs to simply throw in the towel, diminishing Facebook’s own business ecosystem and Facebook’s value to its own users to the point where only Axe Deodorant, Taco Bell and Nike will be showing up in your Facebook newsfeed, which after all, is pretty much the sole point of Facebook in the first place! They’ve deliberately broken their own product’s biggest selling point. Whose idea was that?
The Facebook Promote story is just now beginning to pick up speed and will soon reach critical mass. Have you tried posting anything to a friend’s Facebook wall in the last couple of days? Try it now and see what happens.
If Google plays their cards right, they’ll be able to kick Facebook right in the teeth when they’re already reeling from a self-inflicted wound. An online advertising campaign touting how “Google+ will never charge you, that’s a promise” would bespeaking directly to the Jonathans and Bills of the Internet. Google would simply be crazy not to try to capitalize on these head-scratching missteps every way they can. If anything can boost Google+, it’s Facebook’s management team. All Google has to do is sit back and wait.
I can sympathize with Facebook’s travails on the stock market and I can appreciate that they are providing a value—a great one, unprecedented, really—by connecting such a vast number of human beings in an electronic global village. But I can’t pay them $2000 a day and $672,000 a year for the exact same product that I was getting for free back in March!
