How much will you need to pay Facebook?

Facebook wants you to pay.

paybook

This probably doesn’t come as much of a surprise to anyone who uses Facebook for marketing, but recent reports indicate that Facebook has throttled the organic, non-paid reach of brand Pages again.  It’s a SHIFT tradition that we like to dig into the numbers ourselves and see if we can determine what’s actually happening. To that end, we’ve examined the Facebook Pages of 313 Fortune 500 brands to see how engaged their audiences are. This report is based on the belief that engagement is correlated to reach (and in fact has a causal relationship); the less reach you have, by default, the fewer people who will engage with you. Engagement isn’t just a function of reach, but without reach, engagement can’t happen.

We analyzed the 7-day engagement rate of each page (number of people who interacted with the Page) and used math to determine how much of the total audience (all Likes) was engaged with the brand Page. Unsurprisingly, the numbers look like a power law curve: a few brands doing exceptionally well, and a lot of brands suffering with very poor engagement. A few highlights:

  • Mega-retailer Walmart engaged 53,692 people, which sounds great until you realize they have 34.5 million Likes, meaning they are engaging 0.16% of their audience.
  • One of largest brands, Disney, engaged 726,543 people, a mere 1.56% of their total audience of 46.6 million Likes.
  • One of the big winners in engagement was healthcare firm Aetna, engaging 6,025 of their 16,930 Likes, or about 36%.

Of all the 313 Fortune 500 companies, here’s what their Facebook Page engagement rates look like:

Screenshot_3_24_14__7_07_AM

With engagement rates at the world’s largest companies as poor as it is, it’s logical to wonder how to increase your own engagement rates. Facebook has made it abundantly clear that the free lunch of unpaid social media marketing using their service has come to an end; this “strategy pivot” is punishing brand Pages repeatedly until they pay to reach their audiences. After all, consumers can’t engage with what they can’t see. With some reports of unpaid organic reach dropping below 1%, we set out to find out just how much Facebook wants you to pay.

Facebook’s recommended budget per Promoted Post appears to be (at the time this post was written) a linear relationship with the number of Likes you have. The more Likes your page has, the more you’ll have to pay per post, costing about a penny per two Likes to reach your entire audience. We put together a simple calculator you can try to see what Facebook expects you to spend on a daily basis and how much you should allocate for the rest of the year:


(click here for a larger version of the calculator and a link you can share)

Note: due to exceptionally high demand, the calculator was returning blank results. We’ve fixed it!

If the numbers are a little shocking, we understand. To help combat the sticker shock, here are a few suggestions to help maintain engagement without completely breaking the bank.

First, stop chasing Likes. Every 2 Likes you get is essentially a penny more you have to pay per post. Let people Like your page if they truly do like your brand, but stop asking them for Likes, and certainly stop paying Facebook for more Likes unless you’re prepared to pay again to advertise to that audience. Based on the algorithm above, every Facebook Like will cost you $1.82 in Promoted Post payments (at one sponsored post a day) to ensure that your new Like can consistently see what you’re publishing.

Second, you don’t have to necessarily pay to promote every single post. If you can’t afford to sponsor a post a day, consider sponsoring one every couple of days, paying only for the posts that are likely to generate the down-funnel activities you are trying to achieve. For example, you may not want to pay to promote a daily blog post, but you might want to invest in a post promoting an eBook or app download.

Third, supplement your Facebook marketing with other forms of digital marketing. Put a roundup of your blog posts in your weekly email newsletter. Share your best stuff on other social networks to ensure that it gets seen. Hop on new networks as you have time and resources to do so; newer networks are focused on audience building rather than immediate monetization.

Fourth, make some room in your marketing budget for Facebook if it’s still important to you. The bottom line is that the free ride is over on Facebook. If you want to play, you have to pay, so allocate budget accordingly. If you use our calculator, you’ll see what Facebook expects you to pay per day for the rest of this year.

The surest sign that social media has achieved maturity is that the free ride has come to an end. Expect more social networks to follow Facebook’s path. If you’ve been overly reliant on Facebook for your business, it’s urgent that you diversify as quickly as possible to other networks and other digital marketing tools.

Found this useful? Share it and tag it with #PayBook!

Christopher S. Penn
Vice President, Marketing Technology

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Posted on March 24, 2014 in Advertising, Facebook, Marketing, Social Media

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About the Author

Christopher S. Penn is an authority on digital marketing and marketing technology. A recognized thought leader, author, and speaker, he has shaped three key fields in the marketing industry: Google Analytics adoption, data-driven marketing and PR, and email marketing. Known for his high-octane, here’s how to get it done approach, his expertise benefits companies such as Citrix Systems, McDonald’s, GoDaddy, McKesson, and many others. His latest work, Leading Innovation, teaches organizations how to implement and scale innovative practices to direct change. Christopher is a highly-sought keynote speaker thanks to his energetic, informative talks. In 2015, he delivered insightful, innovative talks on all aspects of marketing and analytics at over 30 events to critical acclaim. He is a founding member of IBM’s Watson Analytics Predictioneers, co-founder of the groundbreaking PodCamp Conference, and co-host of the Marketing Over Coffee marketing podcast. Christopher is a Google Analytics Certified Professional and a Google AdWords Certified Professional. He is the author of over two dozen marketing books including bestsellers such as Marketing White Belt: Basics for the Digital Marketer, Marketing Red Belt: Connecting With Your Creative Mind, and Marketing Blue Belt: From Data Zero to Marketing Hero.
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