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  1. Peter Cunningham 3 Jul 2015

    Facebook have taken a leaf from Google’s book of painting the reason for why they do something as being in the user’s interest when conveniently it helps to massively scale their monetisation.

    Google uses quality scores to show ads more prominently based on how likely they are to be clicked – the justification being that users are voting with their clicks as to what ads are appropriate. But of course it means Google is likely to earn more from each ad shown – in fact its a smart way to maximise CPM via CPC pricing. They don’t show ads that won’t get clicks because they earn nothing. That is how you build a billion dollar business. But of course, no such objections exist when they plaster Google’s own shopping and comparison products all over the SERPs!

    I recently saw Facebook explain that the average user could potentially see 21k posts every time they log into Facebook, but will interact with 5-7. So to make the Facebook experience as relevant and enjoyable as possible they throttle posts from brands and friends you interact with less frequently. Of course they are happy to plaster paid for posts all over your time line.

    Interestingly, they seem to realise that too many ads will kill the experience so they are taking a video based ad approach and are looking to charge premium prices (that only the big advertisers can afford!) and milk those advertisers ruthlessly with auto-play (even if they only charge after 10 seconds) and suggested paid for videos under each video.

    Twitter is still trying to work out the right way to do the same.

    From a user’s POV, this means networks like Facebook are increasingly becoming like a broadcasting network where I only get to see the ads that the big budget advertisers can pay for. I lose the serendipity of seeing messages from old friends that I don’t interact with a lot or who are not that active on the network – one of the best things was seeing them surface occasionally! Now I have less chance to see them. I also am less likely to see ads from smaller local businesses who can’t pay the same rates as Red Bull or Nike.

    From an advertisers POV, after having spent a lot of time and money building up a Facebook or Twitter following only to have the gates closed and then be asked to pay premium prices to speak to their own fans, the levels of frustration are high. But surely they should have known this was coming when they saw the IPO valuations of the networks.

    The visual networks like Pinterest and Instagram will work better for visual products like fashion and interior design. But not everything is visual. Take home insurance for example – pictures of cartoon bulldogs on Instagram will not make you want to take out a policy. You will need to read something.

    The main thing advertisers need to do is go back to basic word or mouth principles about how you make messages and offers go viral and also to think about the very ‘social’ nature of social networks. The one thing the networks can’t stop is ‘me communicating with my friends and family’. If they do that then they kill the very essence of the network.

    This means that if a brand can engage, whether by images for visual products or video/text for less visual products, customers, fans and followers to share messages/offers via social then the networks are still a hugely powerful tool. At Buyapowa we combine 3 concepts of smart rewards, gamification and communal targets to allow our clients to scale customer get customer.

    It is no longer viable to build up a large audience of fans with competitors and then post kitten pictures (why you ever did that unless you sell pet food is beyond me), but provided brands stop thinking of social networks as ‘just another ad network buy’ then all is not lost.

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