Mark Schaefer and I recently had the unique opportunity to analyze a significant dataset from AgoraPulse on the organic reach of around 8,000 Facebook pages. Mark has done a far more exhaustive look at this dataset on his blog today (see "Coming Clean on Facebook Reach"), but the bottom line of our analysis is simple: yes, there has been a decline in the organic reach of brand pages on Facebook, and yes--that decline has been precipitous in many cases.
Some categories of brand pages seemed to do well--sports-related pages, for example, tended to reach 30-40% of their audience organically--while others performed quite poorly, reaching low single digit percentages of their audience organically. On this week's episode of The Marketing Companion, we took a deeper dive into some of that data, and if you manage a Facebook page or pages for your brand, it's really required listening (which you can do right at the bottom of this post).
There is one aspect of our discussion, though, that I want to highlight here: the "beta" of organic reach. Yes, it is troublesome that 6% of the industry categories we analyzed saw their reach stay the same or even grow, while 70% saw their reach decline by 30% or more over the past year. That in itself makes investing a great deal of time on generating organic Facebook reach a dubious proposition for the average brand. But it's the volatility of brand reach that is the most sinister aspect of these numbers.
Consider that, by industry category, organic reach ranged from a little over 3% to north of 40%. That's a pretty wide swing, no? Look at it this way: if I buy ads on a radio station, or print ads in the newspaper, there are very good estimates within pretty reasonable tolerances as to how many people I would reach. Are those estimates exact? No, but they are pretty good, don't deviate too far from reality, and you can have confidence that if you buy an ad designed to reach 100,000 people, you are going to reach 100,000 people within a defined and acceptable margin of error. Of course, it's on you to make the message compelling, but that's true on Facebook as well, no?
In any case, your reach isn't defined by how compelling your content is. Your reach is defined by math. If a cable network with an audience of one million told you that your ad could be seen by 30,000 of those people or 400,000 of those people, depending on, you know, how engaging your content or your brand are, there would be no cable TV.
But that's exactly how Facebook seems to work. On Facebook, your reach isn't determined by math. It's determined by multiple factors, some of which are beyond your control--like your industry category. The organic reach for Appliance pages in the AgoraPulse data was under 4%. You can have the greatest brand page strategy in the world, but there is probably a finite cap on the percentage of people that want a relationship with their dryer (even if it's HOT.) Again, think about the cable TV analogy--would you buy advertising on a medium that told you your reach would be 80% lower than another advertiser's reach because you make toasters, and not Harleys? HELL, no.
Earlier I mentioned the term "beta," which is an investment term for a measure of risk. Betting on a total market index has a beta of 1--it's the index. A volatile stock that deviates wildly from that index has a higher beta--it is capable of great returns, when it swings well above the market, but also great despair when it goes south. To me, investing your time and resources in organic Facebook reach is investing in a very high-beta stock. There is a place for high-beta stocks in a portfolio. It isn't a very big place, unless you are more of a gambler than an investor.
If "beta" is a measure of risk, you might be wondering if there is an "alpha," and yes, that is also a relevant term here. When an investment is actively managed, the ability of the investment manager to beat the index is measured as "alpha." In other words, if an actively managed fund produces higher returns than the returns a rising market would have generated anyway, that manager has generated "alpha." Investors love chasing alpha. Trouble is, no one beats the market over time consistently, so chasing alpha is fraught with peril. Chasing alpha in a rigged game is even more fraught with peril, and Facebook's continual algorithm tweaks are most assuredly a rigged game.
If you are actively managing a brand page for one of the industry categories with inherently poor Facebook reach, you are really chasing alpha, and chasing it in a "market" with an extraordinarily high beta. I'm not sure I could invest much in that market, but maybe your stomach is stronger.
In any case, clearly there are some industry categories--and some individual brands--that "beat the market" in terms of organic reach. In looking at them, I think there is a very simple rule of thumb for investing your time and energy seeking alpha with Facebook organic reach: if your brand has a flag planted outside of Facebook, you have the chance to generate "alpha" on Facebook. If your brand is the kind of brand that gets talked about around water coolers, holds rallies in Sturgis, or owns a color (see the photo above), you probably have a good chance of importing that affection into Facebook.
But if you don't have that flag planted in the offline world, Facebook could be a terrible place to plant your first one.
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