Facebook Slaps Marketers with Higher Ad Fees

Posted on May 20, 14 in Blog Financial

Facebook is revamping their pricing platform for business clients.

Over the past few months, the popular social networking website has been reducing the organic reach of its pages, according to a recent report in Time magazine.

It’s gonna cost you to talk to your followers

Now, even if a person “Likes” a company or organization on the social network, they’re unlikely to naturally see that page’s content in their News Feed.

The article references a recent study of more than 100 brand pages by advertising giant, Ogilvy & Mather. They found that in October of last year companies were only able to reach 12% of their followers. However, that number dropped to 6% in February of this year. According to the tech blog Valleywag, they report that Facebook is planning to reduce this level down to 1 – 2% eventually!

So that means that now you have to pay to talk to the people that follow you and those that you’d like to follow you.

In a few words: The free lunch is over

It also means that Facebook is not the free advertising tool many thought it would be.  According to Nichole Kelly, CEO of Social Media Explorer, this is all a part of their ongoing strategy to find more ways to make pages pay for advertising.

“What we’ve seen since they’ve done it is that it’s driven the cost of advertising up,” Kelly said, noting that one SME client saw its ad costs on the site rise from $20 per click to $60 per click. “The only thing I am surprised about is that they made such a dramatic decrease. To go from 16% to 1% is a little shocking.”

Many savvy marketers already know that a digital strategy has to be part of a balanced overall communication plan. The best plans allocate resources against objectives that drive organizational sales and profits across all the media options.

Social media should always have a place in a public relations plans but it remains questionable if it will serve as a useful paid tool as a part of sales promotions. With social media targeting capabilities sketchy and limited, there are many other tools that are stronger and more effective for delivering qualified leads to the institution.

With the lingering frugality of marketing budgets following the recession, the challenge for management and senior marketing leadership is the realization that these traditional, yet higher cost marketing and communication options are now more relevant than before.

During the years of budget reductions and adoption of social media advertising, much of the traditional techniques were pushed aside in favor of lower cost digital options, albeit with a higher personnel cost to manage them.

Something old, something new…as long as it works

With a true cost per click of up to $60, you owe it to yourself to take a hard look at the effectiveness of Facebook and a broader look at all advertising options. According to a study by the DMA the cost per lead/order averages in 2012:

 Direct Mail Letter           $51.40
Pay-per-click                    $52.58
Print Advertising             $60.50
Telemarketing                 $190.49
Email                               $55.24

 At the end of the day, the best marketing investment is to develop a content rich experience at your own site/company using platforms that you control and a relationship that you define. The goal should always be with an eye toward balancing your message and generating greater return on investment.

 



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