From The Wall Street Journal:
Chrisy Bossie built a $100,000-a-year gemstone e-commerce business by sharing information about her products on her company’s Facebook page several times a week.
“Steals in the Shop! I have a TON of new 36-inch-long necklaces, most priced at $15, available in amethyst, lapis, watermelon tourmaline, turquoise…. Shop them all here,” she wrote in a recent marketing post on a Facebook page for Earthegy, the business she runs from her home in rural Kent Store, Va. She also included photos and links to the products, hoping the business’s 70,000 Facebook fans would share the posts with their own Facebook friends.
But small-business owners like Ms. Bossie will soon get less benefit from the unpaid marketing pitches they post on Facebook. That’s because, as of mid-January, the social network will intensify its efforts to filter out unpaid promotional material in user news feeds that businesses have posted as status updates.
The change will make it more difficult for entrepreneurs like Ms. Bossie, the founder of four-year-old Earthegy, to reach fans of their Facebook pages with marketing posts that aren’t paid advertising.
Businesses that post free marketing pitches or reuse content from existing ads will suffer “a significant decrease in distribution,” Facebook warned in a post earlier this month announcing the coming change.
The upshot for Ms. Bossie is that “if I do not pay to promote the post or boost it, it’s hardly reaching anyone,” she says. Now, more than half her sales come via her Facebook posts, she estimates.
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Dan Levy, Facebook’s vice president of small business, says that Facebook’s paid-advertising options have become more effective recently and that companies should view Facebook as a tool to “help them grow their businesses, not a niche social solution to getting more reach or to make a post go viral.”
He says he has “a lot of empathy” for business owners who “are feeling this evolution” in the reduction of what he describes as organic reach. But, he says, organic reach is only one of several reasons companies benefit from having a presence on Facebook. Last month, there were more than one billion visits to Facebook pages directly. “Having a presence where you can be discovered still has a ton of value,” he says. “We don’t want them to spend any dollar with us unless it’s doing something spectacular to help them grow their business.”
Facebook’s push toward paid advertising is likely to aggravate an “already tense relationship between small businesses and social platforms over audience ownership,” says Steven Jacobs of Street Fight, a Colorado-based media-and-events firm covering local digital marketing. Businesses used to own their consumer relationships through email or other in-house marketing channels, or to buy them from newspapers, television and other traditional media outlets through ads. “But Yelp and now Facebook are trying to peddle a third model, he says: “renting—in which a business can build a community but never own an audience on a platform.”
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Ms. Bossie says that she has used both “unpaid” and “paid” Facebook posts to spread the word about her business and that the unpaid promotional posts are becoming less and less effective at driving sales as other content crowds them out. She expects to pay $1,500 a month next year on Facebook advertising, up from $1,200 this year, and she plans to allocate about three-quarters of her spending to promoted posts.
Link to the rest at The Wall Street Journal (Link may expire)