facebook organic reach declining

Stop Blaming Facebook Organic Reach Decline Is Inevitable

January 24, 2015
Josh Light

I’m obsessed with economics. I majored in it and I listen to super nerdy podcasts about it all the time.

Economics can be used to explain a whole array of things that have nothing to do with money like: how abortion reduces crime rates, why seat belts may kill more people than they save, or even why organic reach is declining on Facebook (what this article is about).

This article is going to illustrate why organic reach is declining on Facebook, from an economics perspective, and it will explain why every successful social networks will eventually follow Facebook’s route.

What Is The Facebook Problem?

Many businesses have spent years obtaining Facebook likes to help them get more exposure for their products or services. Over the years, their Facebook posts have systematically become less visible to their Fans. Initially, businesses could expect their status updates to reach around 16% of their Fans. Now, however, their updates are typically seen by less than 1% of their Fans. Just check out this graph from EdgeRankChecker:

organic reach per fan

For businesses this means less of a return per Facebook post, and it’s happening at an increasing rate.

Why Is This Happening

Models are used, in economics, to explain the real world:

economics models

Models are helpful because they can be used to illustrate a complex problem in simpler terms. If we were to model the Facebook problem it would look something like this:

facebook organic reach decliningOn the x-axis we have connections. On the y-axis we have time. One line illustrates “your time”, and the other line illustrates “your connections”. In this model, as time goes on your connections increase.

“Your time” appears as a flat line because this model assumes users spend some fixed amount of time on a social network. Obviously, in real-life, this line would likely curve upwards or downwards. For the sake of simplicity we’ve made this line flat.

The blue area represents the early days of any social network. During this time, users have less connections relative to the amount of time they spend on a social network. For example, if this model were mimicking Facebook then during the blue area phase you’d see all the status updates from your Facebook friends because you spend more time on Facebook relative to the amount of people you’re connected to.

The red area represents the latter days of any social network. During this phase, users have more connections relative to the amount of time they spend on a social network. Let’s use Facebook as an example again. During the red area phase you have more connections than the amount of time you spend on Facebook. This means that you’ll miss status updates from some of your friends.

If a social network is popular then more people are going to join it. As more people join it the amount of connections between each individual increases. This increase in connections reduces the visibility of each connections status updates because we only have so much time during the day.

For example, let’s say your 80 year old grandma has finally gotten tech savvy enough to join Facebook.

grandma

Over time Facebook is going to start recommending her grandchildren, and she’s going to send them friend requests. Next she’ll start receiving invites to “like” pages her grandchildren are supporting (also considered connections). Then her children are going to send her requests. Finally, distant cousins are going to reach out. Eventually grandma is connected to so many relatives and Pages that she is missing updates from a few people. She has officially entered the red area of our model.

Why Is The Red Area Bad?

The red area is bad for any Facebook user because it demeans their experience on Facebook by showing content from distant friends over people they actually care about.

By addressing the red area dilemma, a social network can create a competitive advantage over other social networks. Users using social networks who address this issue will have a more enjoyable time when viewing their newsfeed…this translates into more advertising revenue for the social network.

This is why Facebook has decided to implement an algorithm that determines which connections are important, and which are not.

Why Facebook’s Not The Bad Guy

Even if Facebook decided not to implement their algorithm, organic reach will still decline because of the ever increasing connections each Facebook user has. Facebook’s director of product management for News Feed said that the total number of Pages liked by the typical Facebook user grew more than 50% in 2013. That’s an insane amount of new connections.

More connections means less exposure for each connection because the amount of time each user has is fixed (think of our model).

Why It’s Connections Not Content

The organic reach decline shown in EdgeRankChecker’s above graph, and the statement from Facebook’s director of product management, are inversely related. When one goes up, the other goes down.

This may mean that the increase in connections is the cause of organic reach decline.

Additionally, people aren’t really posting that much more now relative to when they first started using Facebook, but the data shows us that they’re certainly creating a lot more connections overtime. This tells me that connections is the culprit, not an increase in content.

Why Twitter Doesn’t Do This

Twitter mostly shows it’s newsfeed in chronological order, but Twitter doesn’t have the ability for a personal Twitter account to massively invite all of their followers to follow their business Twitter account.

Facebook, on the other hand, gives each Fan Page the ability to mass invite all of their personal Facebook friends to like their business Fan Page. I usually end up liking Facebook Fan Pages my friends invite me to even if I’m not really interested in what they’re doing. I do this because I want to show support to my friends. I imagine other people do this too.

I imagine that each Twitter user isn’t as far in the red area as each Facebook user because of this. Additionally, there are a lot more Facebook users relative to Twitter users so this likely has an impact too.

But…I believe the inevitable result of any successful social network is going to be a decline in organic reach caused by an algorithmic change initiated by the social network. Social networks that don’t do this will lose ad revenue, and social networks that do this will increase ad revenue. Obviously, the ad revenue social networks should win in the long-run.

I hope this article made sense. Please feel free to comment below. Would love to hear your thoughts on the matter. 

(Photo Credit: Flickr via Owen W Brown)

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