Now that Facebook actually has to make a reasonable attempt at being a profitable company to shareholders rather than just living off of private investment, it was inevitable that Facebook would eventually begin steps to monetize its Internet product and attraction. However, the way CEO Zuckerberg and company are going about the issue is really getting a number of bigger client players upset, enough that they are stepping away from Facebook altogether as any kind of a viable business marketing model.
The problem has to do with Facebook’s new “algorithm” approach to messaging in the Facebook world. In doing so, businesses and company clients continuing to use old, free methods are seeing their reach cut in half. To return to maximum impact Facebook is offering access again, but at a price. Actually, the company offers a menu of prices, but each message triggers a charge of thousands of dollars. The day of Facebook pricing and selling its database of users has finally arrived.
In fairness, the social media giant positions itself in the argument that it has spent a lot of effort and time making its messaging system work far better, hitting readers who are interested in specific items rather than just anybody. With the use of Edgerank, the actual model applied, Facebook tracks the activity and posting as well as the reading of every Facebook user and then leverages that information into marketing reach products, i.e. targeted access. The extensive tracking is described under the altruistic goal of elimination spam. Not many believe that.
In reality, Facebook’s changes are far more in line with maximizing company revenue as much as possible. Unfortunately, doing so is exposing the company’s management as amateurish in how it goes about monetizing tasks and tools that were once free. The blundering in turn is causing big brands and business to rethink their use of Facebook, especially with how aggressive the revenue push is.
Many affected companies are not dumb. While Facebook does dominate the social media environment simply because it’s so easy to use, the format is not the only social media option available for marketing. Twitter plays a close second place and a number of other platforms are starting to gain in popularity. Client companies are simply rejecting the high-pricing level outright, especially for a resources they’ve been using for years for free. The idea of being charged to maintain and increase social media “likes” and “friends” is offensive.
Social media has for the last five years been pushed as the next great frontier of marketing. However, all of that activity has been based on a model that never charged a fee for using its environment. As a result, reach was viral and powerful because everyone likes something that comes free and works. Now that a fee is being charged, an expensive one at that, the basic business question comes into play: is the return on investment worth the up-front price? So far, Facebook’s algorithm model is not considered worthy. Gain ambiguous friend statuses and likes are one thing if free, but paying for them when the model still hasn’t shown a proven model of creating new customers is quite another.