The Facebook news feed is highly coveted real estate with finite space, so something had to give -- and it's brand posts.
The social network wants to keep its 757 million daily users active while cranking up its ad business, so brand posts with no spending behind them are getting the squeeze. The posts are less interesting to users and don't drive any revenue for Facebook, and since late 2012, there has been less and less room for them. An analysis by Social@Ogilvy of 106 country-level brand pages found the average reach of organic brand posts had plummeted from 12.1% in October 2013 to 6.2% in February.
A Facebook engineer explained the competitive environment last summer when he cited internal research showing that 1,500 pieces of content are eligible to appear every time a daily user logs into the network. Each day, an average of 300 "stories" are then prioritized by news-feed algorithms to appear to that user.
That's 80% of eligible content taken out of the picture. Brand posts are being weeded out along with boring status updates from acquaintances. Here's why organic reach is declining at Facebook:
People have more friends
A Pew Research Center study conducted last summer showed adult American Facebook users had an average of 338 Facebook friends. That's up from the 229 friends reported in an earlier Pew study with data from the fall of 2010. More friends means more status updates eligible for feeds.
People are following more brands
Facebook users who are active on a monthly basis "liked" an average of 40 pages in 2013, social-marketing company Socialbakers reported in September. That produced about 1,440 updates from a mix of brands, publishers and public figures per month. For comparison, in 2009, the average number of page likes was just 4.5, yielding 22.5 monthly updates.
Fan counts for the biggest brands continue to creep upward too. Coca-Cola's grew 32% this month over last year, while Red Bull's grew 18%; Starbucks's grew 7%; and Oreo's grew 11%, according to Brand Networks. The result: Brands are competing with one another for the slice of space that remains to them in news feed.
Facebookers are reading more news
Facebook acknowledged in December that it had tweaked its news-feed algorithms to surface more links to articles from media organizations, especially to users on mobile devices. That has helped yield a massive spike in referral traffic to publishers like Buzzfeed and The Atlantic. It's part of Facebook's plan to make its content more appealing to users but leaves less room for brands.
People are seeing ads the brands are paying for
Facebook CEO Mark Zuckerberg boasted during the company's last earnings call that click-through rates had remained stable even as news-feed ad volume grew in the second half of 2013. Mr. Zuckerberg said in July that about 5% of news-feed posts were ads, but didn't update the number on the call.
Facebook only began placing ads in user news feeds in January 2012. The observable decline in the exposure of organic brand content began later that year.