• by Augustine Fou , May 23, 2014

OMMA Social in NYC kicked off with a question about the decline of Facebook's organic reach -- down to the single digits, according to a report from Social@Ogilvy -- and whether Facebook reach was worth paying for. Some conspiracy theorists even went as far as to demonize Facebook for trying to make money by dialing down organic reach in order to force brands to pay for the same reach. The panelists debated whether that was the case.

Facebook Organic Reach Down to Single Digits, But So What?

What emerged was a unanimous and refreshing view from all of the panelists that in their recent experience, their clients, the brand advertisers, had matured beyond the good old days of getting a “free ride” on organic reach, buying likes to build up numbers of fans and focusing on reach and frequency. Now, they are focusing much more on engagement and the resulting business impact. In fact, some of them even spurned larger reach as “ineffective” if no fans took any action.

Neither they or their clients were particularly phased by the dramatically lower organic reach. None were going to abandon Facebook as part of their marketing mix. If anything, they were ready to increase their use.

Mass Medium With New Capabilities: Hyper-targetng, Micro-targeting, Nano-targeting

It was said that Facebook now reaches the equivalent of five Super Bowls of users per day. But that’s the catchy headline that means Facebook has reached “scale” and already has the same, if not greater, reach than any TV network or TV program. But beyond just reach, it also has new capabilities that simply were not possible before, in one-way channels like TV and print.

The sheer amount of user content and interactions that has occurred on the platform for years, combined with demographic, geographic and relationship information about the users, means that Facebook has the ability to target audiences with incredible levels of detail. The ability to target in this way, combined with truly gargantuan total user numbers, suggests that even an extremely fine-grained segment will still have enough users in it to matter to advertisers.

Further, with the advent of video ads on Facebook, advertisers can now reach a purported 90 million to 100 million unique users with the video ad each day. Not only is that competitive to a Super Bowl ad and other TV ads, it is also better. It is better because the advertisers will know 1) there was a human user whose activity on the site led to that ad impression (they saw it, vs a TV ad where you don’t know); 2) there was activity or a response mechanism -- the user clicked on the ad; and 3) there may even be conversion to a sale or at least a desired performance metric.

Implications for Agencies and Constituents

With the rise of Facebook, an at-scale medium with feedback loops similar to direct-response, advertisers now have a new tool at their disposal. Because Facebook is increasingly selling direct to the brands, the media agencies that formerly handled the placement of such dollars are at risk of being disintermediated. In addition, the self-serve interfaces provided by Facebook, Twitter, YouTube, LinkedIn, etc. mean that marketing managers can increasingly just log in and manage and optimize their campaigns themselves -- again, without the overhead of an intermediary trying to make a margin.

Finally, in a brilliant example from Mondelez’s Laura Henderson, the corporate team set up a real-time video production studio that all the brands could “subscribe” to. The studio would produce short, branded videos in response to news items that were trending at any given time — to inject the brand into conversations or topics of interest. This kind of real-time native content generation is not something traditional agency holding companies have a reputation for, nor are they even set up to do. Increasingly, brands are taking this in-house or finding small specialists to help them.

How To Take Advantage Of Native “Ads” On Social?

Based on all the input from the panel, it is clear that they and the brand advertisers have moved on from just thinking about tonnage of ads on Facebook and “organic reach,” which they used to enjoy for free. They are now actively trying to create content and commentary that their fans would find valuable enough to share or at least engage with. But it is also clear that most brands are relative “newbies” to this kind of “native ads,” for the very reason that they are not actually “ads” — nor should be.

In order to be allowed to “inject” themselves into the conversations real people are having on Facebook, they need to provide something that is timely, useful and entertaining. “If native means authentic and useful, then keep it; if it means ads pretending to be content, then don’t.” Tania Yuki, CEO of Shareablee has not only the in-depth research to support how brands should increase organic engagement on Facebook (not just views), but also very sound, practical advice:

1. brands should post more frequently, not less, to grow monthly reach
2. brands should pay for promoted posts to reach less active fans, but not overly rely on paying for reach,
3. brands should focus on engagement quality — actually sharing something is more valuable to the brand than a user just clicking like. Did the user engage with brand content more than once?

So Social Is The Future Of Native

Instead of thinking of social with the same mind-set as ads -- how many can we show to how many target users -- brand advertisers can better leverage it to achieve the promise of “native advertising.” The most “native” of #nativeadvertising is when users talk about you and share and recommend you to their friends -- more so when the brand is talking about itself (an ad) and injecting it into their conversations. So it is not about the quantity of ads, whether organic or paid, it is about whether the users want to engage with you and further engage their friends. The key to this is to make sure your “native ads” don’t elicit the following responses from your audience -- #WTF, #TMI, #MEGO, #404, or #IDC.