Businesses 'held to ransom' by Facebook's paid Promoted Posts

AUSTRALIAN business owners have accused Facebook of holding them to ransom by effectively forcing them to pay to communicate with their followers. 

Businesses have reported a dramatic decline in the number of people viewing their posts since the US social media giant last month began pushing its paid promoted posts service, in which users pay up to $400 to have each status update appear prominently in their audience's newsfeed.

Chris Cassella, managing director of Science Alert, said Facebook informed him recently that unless he signed up for the service, there was only a very small chance his posts would reach all of his two million fans.

"Facebook said in their marketing press release that there was a 15 per cent chance my audience would see my posts show up in their newsfeed,'' Mr Cassella said. "It's ugly. It is an ugly business tactic.''

Mr Cassella has spent thousands of dollars on the service but has decided to stop.

"I did a calculation and found that if I was to reach all of my audience on all of my posts, it would cost Science Alert over $9 million a year,'' he said. "I told Facebook that I couldn't give them money for them to hold me hostage.''

Melbourne woman Hayley Deerfield, who runs vintage fashion business Deerfield Vintage via Facebook, said she had to increase her marketing budget from $100 to $350 a month to ensure her posts got through to her 5200 followers.

"In most cases, only 10 per cent of my followers actually see the post,'' she said.

"Choosing to promote a post is extremely expensive when I'm making two to three posts a day. This is totally unaffordable.''

Facebook said it had changed the newsfeed, but had not done so on order to charge to promote posts.

However Karalee Evans, APAC digital strategist at communications agency Text 100, said a sudden drop in audience reach at exactly the same time promoted posts were introduced was "no coincidence''.

"It seems like Facebook is double dipping,'' she said. "From a brand's perspective it's unfair to be charged to reach a community of people that are already there.''

However, Shai Roitman, general manager of Melbourne fashion website MIISHKA, said it was up to business owners to communicate more effectively with their audiences.

"I don't mind spending money on ads because I'm grateful for what Facebook has done for us. I get why this has happened,'' he said.

Facebook issued a statement when asked about the change.

"There's a lot of misinformation going round about changes to news feed. To be clear - we did not change news feed so we could charge to promote posts. This meme is totally false," Facebook said in the statement.

"News feed is built to show relevant content. A few times a year we perform quality checks on the news feed algorithm to ensure high-quality and relevant posts. Based on a recent quality check, we made an adjustment to the news feed algorithm to respond to the negative feedback signals of spam and people hiding posts. Current signals show the adjustment has been successful - median reach of Pages has remained the same, while spam complaints and stories hidden by users have fallen significantly.”

In essence, Facebook altered their algorithm to ensure that "liked'' pages were not disappearing - but this fails to account for the dramatic drop off in audience reach.

The controversy comes less than a year after Facebook admitted its existing advertising around the site wasn't working.

heraldsun.com.au 13 Nov 2012

Corporations are allowed to give false information without any repercussions.

They are part of the 'untouchables', i.e. above any laws.