Facebook generated more than $17bn in revenue in 2015, primarily from its ad products.

Despite this, brands active on Facebook are overly dependent on organic reach to distribute their content on the world's largest social network.

That's according to a study published by BBDO Worldwide, which found that of the 100 brands with the most engagement on Facebook, only 3% were engaging in paid promotion of 80% or more of their Facebook posts.

This is problematic according to Julian Cole, BBDO's head of communications planning, because "organic reach on Facebook is dead."

Indeed, clients of social media publishing platform provider SocialFlow saw their reach per post on Facebook drop by a whopping 42% between January and May of this year alone.

Of the brands BBDO looked at, a full 15%, including brands like Pizza Hut, Dove and Pringles, didn't use paid promotion for any of their Facebook posts.

The top 3% of brands, on the other hand, made extensive use of paid promotion.

For example, Starbucks put money behind 97% of its Facebook posts during the period between May and July, while Cadbury Dairy Milk promoted every one of its four Facebook posts during the same period.

Looking at the wrong metrics

Why are the majority of brands still relying so heavily on organic reach on Facebook?

According to BBDO's Cole, many are probably focusing on the wrong metrics, specifically those related to engagement, such as comments and likes.

But "the people who like posts, who like brand posts, like lots of things on Facebook," Cole stated.

Frequently, BBDO found, those who engage at a higher clip aren't even those the brands are targeting.

In many cases, the consumers brands are targeting haven't liked their Facebook Pages, and thus are unlikely to be reached organically.

Cole refers to these as "light buyers" and points out that they can be critical to moving the needle...

When you look at where you actually grow, it’s actually the light buyers, people who buy your product once or twice a year.

So you think of Pepsi, it’s not the person who drinks like, three glasses a day. It’s the person who drinks it once or twice a year is where you see your volume growth.

Unfortunately, because brands have been conditioned to focus on engagement metrics, many are just now learning that their campaigns on Facebook might not be reaching who they need to reach in the first place.

BBDO says that it's working with clients to help them understand this, and as this knowledge becomes more widespread, it could help Facebook grow its ad business even further.

Further reading:

Patricio Robles

Published 14 September, 2016 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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Matt Lovell, Head of Customer Insight at Jack Wills

Interesting post. From my side there are two difficulties here.

The first revolves around the continued reduction in organic reach on Facebook. If you bear in mind that this has dropped from the wondrous days in the infancy of Facebook where 100% of your audience could be hit to an estimated 16% in 2012, 6.5% in 2014 and as low as 2% now, it means that in order to achieve any reasonable levels of reach you either need to have something that is highly engaging and shareable or pay substantial amounts to reach people who have already said they have an interest in your product / brand.

With this point, as much as Facebook provide their logic that this is down to an increased volume of pages / likes / content, there is no doubt that it is also heavily designed with the view of driving more revenue from their paid ads.

The second issue is accountability of activity on Facebook. The article above talks about companies using the we the wrong metrics but given the restrictions imposed by Facebook on tracking, what are the right metrics? Post view data is largely meaningless when there is no guarantee the user in question even took in the ad let alone engaged with it which makes determining the effectiveness of any spend really tough.

Facebook may have made $17 billion last year from their ad products but how much can companies actually categorically say they drove from Facebook? For most, this number is pretty small which makes justifying ever increasing spends across the site really difficult.

about 1 year ago

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