Is Facebook Advertising Dead?

Facebook have hooked over 2 billion other users to affirmation-induced likes… that quick hit from tapping the little red notification dot… and hitting a vein of superficial clickbait content. Those same users are also enraged, yet equally hooked, by fake news, bullying trolls, and they are drawn into arguments they’ll never win with people they’ve never met.  Not to mention that you are being fed posts that you are engaging with – if for example you are right leaning politically – you are going to be “fed” right leaning posts.  Not to mention our growing skepticism to how much data are they pulling from our email, phone activity, etc.

Facebook has recognized this and recently announced they are making big changes to their algorithm to favor content from people over businesses. These efforts are the result of them paying attention to recent studies showing the unhealthy impact of social media. Some high-level executives and co-founders, like Sean Parker, have been quite vocal about not wanting to get high on their own supply.

Facebook have acknowledged that these self-imposed changes will result in people spending less time on the platform. You’d be forgiven for thinking this is a noble, altruistic gesture. The truth is, like any smart drug dealer, they’d rather keep their addicts alive than have them overdose and leave the platform completely.

The cost to marketers

Whether it’s a case of Zuckerberg developing a conscience, or if it’s just a smart business move, there can be no doubt that these changes will have a major impact on marketers.  The biggest one being the increase in cost to reach your desired audience.  Organic reach has already been declining over the past few years, and these latest changes are really the final nail in the coffin… and now, the cost to advertise on Facebook is going to increase significantly.

It all comes down to this…

Facebook’s largest inventory is their Newsfeed. As users spend less time on the platform, they have fewer opportunities to see ads. It’s simple supply and demand mathematics of an auction-based system.

In a recent article, Kunal Gupta calculated that the cost for advertisers will rise by a whopping 79% in the next year.  We think it will be much higher.  There are 6 million advertisers on Facebook. Competition will keep increasing. There are already over 100 million business Pages. Many of these Pages aren’t yet advertising, and the recent changes will force a lot of them to start paying to play for their social traffic.

Of course, the few advertisers with the deepest pockets will continue to win more of the auctions.  However, there’s another serious problem for advertisers that may have a greater cost than rising ad spend.

Compliance — the dirty word no one likes to talk about.

Unfortunately, it has become a growing problem that can’t be ignored.

It’s not just the recent crackdown on crypto ads that I’m talking about. On the face of it, Facebook doesn’t seem to particularly like info publishers. Frankly, they just don’t get our business model and instead they are chasing e-commerce and big brands.  As a result, we’re seeing more ad disapprovals and entire ad account suspensions.

What should marketers do?

Does this mean Facebook is dead for marketers?  Not exactly. It’s still an incredibly powerful platform and one you should continue to use. But you’ll definitely have to make serious plans to protect yourself too.

Here are our recommendations:

1. Test alternative strategies on Facebook Consider more content-rich landing pages or sell more traditional based products, like physical (rather than virtual) books. Run video ads.
2. Up your game on Instagram Instagram has improved a lot over the last year, especially when it comes to direct response. The user base continues to increase, and will soon exceed 1 billion, likely fueled further by more users jumping ship from Facebook. There’s even an opportunity for free organic reach. But the real, scalable opportunity is with Instagram advertising.However, most marketers tend to lump their Instagram placements together with their Facebook campaigns. That’s because Instagram is owned by Facebook and ads are run through the same platform.I suggest creating separate Ad Sets that allow you to run from an Instagram account (not your Facebook) page, get greater distribution, and make use of the different Ad Units and creative.
3. Diversify outside of Facebook Since Instagram and Messenger are both owned by Facebook, you should absolutely look into scaling up on channels not owned by the social media giant too. Bing is the forgotten Ad Platform that now has 9% of the search engine traffic worldwide. It accounts for 33% of search in the US, a quarter of search engine activity in the UK and many parts of Asia, and double digits in many other countries.
4. Invest in email Your email list will always be your biggest asset. The recent changes to Facebook are a reminder of how fickle those “social lists” can be. So, keep using Facebook and other channels for lead gen to reach those readers with messages you know will convert them to customers.
5. Google Ads – it is always a good strategy to compare your ads in both areas at the same time.

For now, Facebook is not yet dead. But we think it is time to ensure you are diversifying. There’s no doubt there’s a social backlash that is causing users to either leave the platform or spend less time on it. That’s definitely going to increase advertising cost on the platform.

As Facebook attempts to clean up its News Feed, there will be more hurdles for advertisers to run the messages and products we want on their platform.

They’ll need to ramp up their inventory outside of the Newsfeed to remain a competitive option for direct response marketers over the coming years. There’s a good chance they’ll be able to do that, and I’m certainly not suggesting you stop running Facebook Ads in the meantime.  As ad rates increase – as a business owner you need to properly track your ROI – we have the tools to help.