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No hike in ad rates on Facebook after Newsfeed Rejig

16-March-2018
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No hike in ad rates on Facebook after Newsfeed Rejig

Two months ago when Facebook de-prioritised posts from businesses, news publishers and brands, digital marketers fretted over the rejig. Most digital media buyers expected ad rates on the social media platform to spike and anticipated a decline in the frequency of ads. In what came as a surprise to some, Facebook did not increase ad rates for paid posts. 

Digital media buyers found that ad rates have remained the same over the last couple of months and Facebook has not decreased ad inventory following the change. Publishers and digital media experts have found that as intended the organic reach for brands and publishers has dropped immensely and the impact of the overhaul has been limited to that aspect alone.

Speaking to exchange4media, Sahil Shah, VP Operations and Media- West and South, WATConsult, said that he has not observed any major increase in the rates for paid ads. While organic reach has been impacted heavily, Facebook has not capitalised on the loss of impressions and reach that brands and publishers are experiencing by increasing ad rates.

Social Kinnect CEO, Rohan Mehta, also found that there hasn’t been any significant hike in the Facebook auction costs post the change in the news feed algorithms. He added, “The changes in the news feed algorithm were misconceived by most, as those will lead to reduced paid advertising and lesser availability of ad space in terms of impressions. But that’s not been the case.”

“Facebook is in the business of building an audience and delivering objectives to clients using the host of services and options that they have,” said Shah. It is therefore out of character for Facebook to hike rates because that’s not the main game plan of the social media giant.

Rashmi Putcha, co-founder, and Director at LIQVD ASIA and CEO of DMTI also said that there has not been any hike in ad rates since the overhaul. She sees through Facebook’s ploy, “Facebook is now just paid media.” She feels that if Facebook does not offer the best rates in the market, it is Facebook’s loss. “Brands will eventually start looking at Facebook as any other publisher and if the costs don’t match up, brands will move out,” she added.

Mark Zuckerberg observed in his post about the overhaul- “Public content, posts from businesses, brands, and media is crowding out the personal moments that lead us to connect more with each other.” The News Feed rejig was aimed at improving social interactions which had reduced over the years. “Facebook’s simple goal is to increase time spent on the platform,” said Mehta, explaining the overhaul.

Brands are now looking at generating non-clickbait and authentic content that will be hard to differentiate from content shared by friends and family. From influencer marketing, branded content to community engagement, brands are exploring fresh avenues for digital marketing. "Organic reach has dropped to merely 2-3 per cent. We are working with Facebook to develop other engaging ways to reach out to our audiences," said the marketing head of an entertainment house who did not wish to be named.

Despite the overhaul, concerns of fake-news and brand safety and some reports about a decline in time spent on the social media platform, Facebook’s unmatched reach has made it the go-to partner for social media campaigns.

In the short-term, Facebook will continue to maintain its stronghold over advertisers and publishers even after jilting them, said digital media buyers. “There has been no knee-jerk reaction from brands yet, but there are lots of conversations about long-term planning to build their own communities and platforms,” noted Putcha.

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