Forrester, the respected market research company, has a history of releasing reports that cast Facebook in a bad light in the eyes of advertisers. Last year it suggested Facebook was “failing marketers” by “abandoning” its promise of social marketing. Now Forrester is truly hitting Facebook where it hurts: it is advising advertisers to stop using Facebook if they want to build social relationships with their customers.
The release of the “Social Relationship Strategies That Work” report follows Facebook’s announcement on Friday that is going to reduce the organic reach of brands’ “promotional” page posts even further from January. Facebook says the idea is to “increase the relevance and quality” of the stories people see in their News Feeds by downplaying spammy posts. But it also essentially devalues posts that brands push out from their Pages, meaning advertisers will have to buy up Facebook ads to guarantee reaching their fans. Advertisers have been annoyed by this for some time because at one time Facebook encouraged advertisers to buy ad campaigns that increased their likes and followers, in hopes of extending their reach.
Forrester’s Nate Elliott says Facebook’s move to continue to chop down the organic reach of brands’ Facebook posts and the fact that marketers continue to be dissatisfied with the performance of their Facebook Pages point to the fact that brands “don’t actually have social relationships with their customers.” He adds that it is time for marketers — who have been wasting “significant financial, technological, and human resources on social networks that don’t deliver value” (which also includes Twitter, in this report) — to explore new techniques such as using smaller social networks (which are less cluttered than Facebook and Twitter because they currently have fewer users and advertisers clogging up the News Feed and by adding social relationship tools to their own websites.
Facebook did not immediately return a request for comment.
Ad agency Ogilvy reported in February that brands’ Facebook posts were only likely to reach around 2% of users and a Facebook sales presentation leaked to AdAge in March warned marketers “we expect organic distribution of an individual page’s posts to gradually decline over time. Separate research from social media analytics firm Socialbakers provided to Digiday found that not only is organic reach declining but Facebook is actually biased against brands in favour of other types of publishers: The study, conducted from January to September, found brands were only able to reach an average of 25% of their fan bases each month organically, while celebrities reached 54% of fans and news media companies got 58% over the same time period.
So it seems little wonder only 55% of 395 marketers Forrester surveyed in October last year said they were satisfied with the results of their Facebook page, as cited in the most recent report (although it’s a shame Forrester did not update its survey to ask marketers how they feel about Facebook now, one year on.)
Elliott goes on to predict that in the next two years “social marketers will finally stop obsessing over Facebook” if they follow Forrester’s advice. He’s not saying advertisers will stop spending on Facebook, but that they will spend with it like a display ad platform similar to Google, rather than seeing it as a social medium.
He adds: “Let’s be clear: We’re not predicting the demise of Facebook. After all, the site offers about one-third of all the display ad impressions online. But Facebook’s decade of dominance in social marketing is ending … Facebook will become nothing but a repository for display ads.”
In a further blow to Facebook’s prowess as a social marketing platform, Elliott insists that “marketers will use Facebook and Twitter ads as email companions.
“In the next few years, Facebook and Twitter ad spending won’t appear in the social line of marketers’ budgets; it will more commonly appear in the customer relationship management line, next to loyalty programs and email marketing.”
In response to the report, Jerry Daykin, global digital director at the media agency Carat, a unit of Dentsu Aegis, told Business Insider while Forrester is “right in some ways” because the kind of relationships that brands can have with consumers on Facebook have “always been over-exaggerated by specialists with something to sell”, so has the amount of money brands invest in it. Social media marketing always grabs the headlines, but actually represents a tiny amount of media investment compared with TV and traditional display. “Marketers understand what makes their brands grow and big brand marketers understand that means speaking to millions of people, not thousands of fans,” Daykin says.
He adds: “Facebook’s shift to offering a paid platform for brands provides that scale and I actually see a lot of brands massively increasingly their investment into the platform now it offers that to them. [Carat client and Daykin’s former employer] Mondelez’s ‘Storytelling at Scale’ [marketing] approach realised this a couple of years ago and it has seen them rapidly accelerate their Facebook spend and forge a global partnership with them.
“[Facebook] is now the single biggest reach platform in the world, offers great cost efficiencies, capped reach and frequency and we’re seeing strong ROIs [return on investment] greater than TV where we’ve adopted this scale approach. Now we’re looking at bringing different targeted creative to different consumers and maximizing the video potential of the platform.”
Essentially Daykin thinks the Forrester report is short-sighted: yes Facebook is not offering brands deep and meaningful one-to-one social marketing relationships with customers (read: free), but the advertising opportunity is enormous if a marketer is willing to spend.
Facebook also has a huge advertising business: it wouldn’t be growing at such a huge rate — up 64% year on year to $US2.96 billion in the latest quarter — if its advertisers did not consider it useful.
The company also has 25 times more advertisers than Twitter and its executives will be quick to point out the hundreds of case studies on its website from satisfied customers. Indeed, last year, Facebook repeatedly cited a Cadbury Creme Egg case study at conferences, whereby the chocolate brand claimed its Facebook activity drove the same purchase consideration as TV but for a third of the price.