Facebook reduces organic reach

It all started with Facebook's update on the 3rd of December 2013, but some people only realised now after US startup Eat24 wrote an open letter to facebook. Increasing competition for a user's attention, a slow growth of facebook's userbase and time spent on site and a big growth company usage was the perfect recipe for a definite newsfeed algorithm update.

For some time Facebook was trying to juggle the ratios of updates of pages people liked, with lifetime events from your friends and their friends. The challenge was proving difficult not only because people keep building connections, but also because they will like more pages with time.

average of weekly unique post impressions by company decreasing

source: social bakers

I guess in hindsight the answer from companies was obvisous... increase number of posts to get the same ammount of exposure.

average of weekly posts by company increasing

source: social bakers

This generated even more noise! Facebook's next action was more extreme: Penalise organic posts in general.

If on oneside this solution puts pressure into companies to move to paid ads, on the other side it removes the value proposition of paying to build them. We are only left to wait to see this feature slowly being dropped by users during the year.
I don't have access to percentual distribution of companies building likes vs companies paying for display ads/promoted posts, but I do know by experience that the latter tends to be more expensive (CPC/CPM) and have lower conversion rates. This ultimately means the action should create a positive impact to Facebook's earnings (to be released later this month). It also means their should be an increase in overall customers using the ads platform, hence an opportunity to improve it (that started to be rolled out in the begining of March and should be completed by the 11th).

new campaign structure description with Campaigns Adsets and Ads

You might also want to read:

  1. Why Is Facebook Page Reach Decreasing?
  2. Edgerank Checker
  3. Facebook's update to Newsfeed - December 2013