Poor Facebook…We Knew Thee Well.

While it’s been slowly building for about a year, it seems that Facebook’s march to social irrelevance has started to accelerate over the last month. To fully get the context of this change we have to go back about a year to late 2013. Facebook’s algorithm had just been upgraded yet again and not for the better. The problem that this adjustment created was that the world’s largest (and some would say most powerful) social network ‘bold’ move changed the very essence of what it is — a community gathering place.

This new version is one where you literally pay to play.

Basically, Facebook killed what made it special — the ability to connect with your friends and family without limit. In the biz, this is known as Organic Reach. To give you an example, I am EIC of a film site up here in Canada. I managed to eek out a small yet meaningful fan base for my Facebook page over the last few years. I used to post articles directly from WordPress to my Facebook page and almost all my followers would see the article show up in their newsfeed. It was a great way to drive to traffic to my fledgling site.

When the change was implemented, I saw my organic reach plummet from 95% to 6%. So a now a fraction of my fans were seeing the articles I was posting. Facebook’s new positioning is that if I want my fans to see my stuff, I need to pay, (hence the change in its algorithm). My response was to shut my Facebook Page down as I don’t have the kind of budget required to play in paid media space (which Facebook is now positioned in).

And I am not the only who is doing this.

Think of the new Facebook as AM radio. Originally, you would jump into get the news you want or connect with friends — whatever your need — and then you get out. Facebook has now added the commercials.

One by one brand managers started to wrap their heads around the fact the infrastructure that they invested in (at Facebook’s urging btw) was now going to cost a lot more to participate in. Like having to create line items in media buy budget more, This is a problem as budgets for media buys tend to be over the top and wholly disproportionate to the other side of the marketing services buffet; it’s just the way it is.

And if social now has to compete with TV from the same pool of money, it will lose every time. While social now might cost more to implement, marketing budgets are not increasing in conjunction to compensate. In fact, in many areas, budgets are still flat from the underflated days of the recession.

As the realization of just how much has shifted has begin to settle in, brands (including the majority of the ones I worked with over the last year) have begun to alter the way they approached social media. And there is nothing the local and regional brand managers and their agencies can do about it because the directive is coming from high atop the Global Headquarters Mountain of each brand.

While you might be thinking ‘so what?’ social media is huge every brand should get there. Sure I agree with the sentiment that social is a very powerful tool in our arsenal, however it’s not the only tool we use (and quite frankly, the majority of the time, it’s not the most effective one). So when we are putting a strategy together, we have ourselves a huge stumbling block for implementing social strategy that will very soon rear its ugly head shortly as budget cycles flip and begin anew.

Folks at Facebook and the media companies that are driving this change are going to be the hardest hit as budgets will shift away en masse to more effective (and quite frankly better measured) tactics.

The problem is that this move was made too soon.

While the good folks at Facebook would like you to think that brands have been clamouring for this change, it was in fact agencies that pushed for it — more specifically media agencies are the ones that pushed and cajoled the network to shift from what made it great into a bonafide paid media channel. Which leads back to the stated problem. It’s too soon. Social Media holds a very fragile place in agencyland. No one knows what to make of it except that we have to be there. Budgets are put in place because it solves the ‘social media problem’. No one is saying ‘we have to be on Facebook’, they are saying ‘we have to be doing social’.

Bottom Line — Facebook took a huge risk. They are betting the farm that they have the power to move P&L’s. They don’t. Not even close. They got bad intel. And that’s the ballgame.

Furthermore, I actually believe that this is not only the official jumping of the shark of Facebook, but the final nail in the coffin for the media industry which has been on life support for so long as they have bet the farm on this grand manoeuvre.

And herein lies the problem with taking a big risk without a net.