Gaining an-edge-the-brand-impact-of-facebook-s-edge rank-algorithm-change-groupm-next-m80-research

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Gaining an-edge-the-brand-impact-of-facebook-s-edge rank-algorithm-change-groupm-next-m80-research

  1. 1. Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm ChangeAuthors: Chris Copeland, CEO, GroupM Next Nate Lee, Ph.D., Analytics Manager, GroupM Next Brandon Fischer, Partner, Director, Predictive Insights, GroupM Next November 2012
  2. 2. A lot has been made of the economics of Facebook in the wake of this summer’s IPO. At times it hasappeared that the only thing more difficult than keeping 1 billion users happy is keeping investorsand the Street satisfied. This is why every move made by the social network is scrutinized, not onlyfor impact, but also for any alternate meaning to the business’s long-term health.One such move that has received much speculation is the shift in organic post reach for brands totheir follower base. After encouraging brands to amass followers at scale, Facebook implementedsignificant changes to its EdgeRank algorithm earlier this fall.At the core of the change was a stated desire by the social network to improve consumerexperience, acknowledging the impact to brands would be that the reach of an individual postwould diminish, but that post engagement should improve. The questions raised from this movehave been about the overall impact of these two implications and the alternative options availableto ensure continued success for brands in a channel that has grown in importance, owing to thelarge fan bases established to date.Analyses conducted across the Facebook pages of 25 brands by the GroupM Next PredictiveInsights team in conjunction with M80, a GroupM-owned social media and community activationagency, reveals results that are consistent with the original expectations set by Facebook, yet withunderlying challenges and potential opportunities.Taking A Close Look At The Impact Of ChangesTo The EdgeRank AlgorithmConsistent with Facebook-accepted norms, prior to the EdgeRank algorithm change, thebrands studied had an average reach of roughly 16%. (For this analysis, reach is defined asthe percentage of fans who see a brand’s post.) Following the change, the percentage drops by 38%. The upside for brands is Percent Of Facebook Users That See An Organic Post that with a decrease in exposure By A Brand They Like comes increased engagement Organic Reach of Facebook Posts (Before & After EdgeRank Algorithm Change) 18% by users their posts reach, with 16% 15.56% 14% brands experiencing a 96% lift in 12% 10% 9.62% 38% engagement with individual posts 8% 6% Drop following the change. 4% 2% 0% Before After Percent of Users That See Organic Post©2012 GroupM Next Average Post Engagement Through Stories Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change (Before & After Facebook EdgeRank Algorithm Change) November 2012 essions 1 ment 2.0%
  3. 3. ©2012 GroupM Next Percent Of Facebook Users That See An Organic Post By A Brand They Like Organic Reach of Facebook Posts On the surface there appears (Before & After EdgeRank Algorithm Change) Average Post Engagement Through Stories 18% little amiss with the promise by 16% 15.56% (Before & After Facebook EdgeRank Algorithm Change) 14% Facebook and the subsequent 12% Percentage of Post Impressions That Result in Engagement 10% 9.62% 38% delivery — that is until you 2.0% 1.49% 8% 6% Drop examine the implications of scale 1.5% 4% 2% that come with operating on a site 1.0% 0.76% 0% Before 96% Afterhaving more than a billion users 0.5% Lift Percent of Users That See Organic Post and brands with millions of fans. 0.0% Before After ©2012 GroupM Next When put into this context, the Average Post Engagement dramatic lift in engagement simply ©2012 GroupM Next Average Post Engagement Throughoffset the decline a brand cannot Stories (Before & After Facebook EdgeRank Algorithm Change) exposure. experiences in post Percentage of Post Impressions Percent Change In Reach Of Organic Post That Result in EngagementFor brands, this new reality presents a challenge. Obviously there are paid solutions now available on By Post Type On 2.0% Facebook 1.49%Facebook, which many experts haveAlgorithm Change) motivation behind this shift more so than improved (After EdgeRank suggested is the 1.5% 0.76% 30% 96% Percent Change in Reachconsumer experience. The data studied by GroupM Next suggests that, as a result of the change, brands 20% 1.0% 10%now have developing insights which can help to further shape their organic strategy without becoming 0% 0.5% Lift -10%solely paid dependent. -20% 0.0% -30% Before After -40% Average Post Engagement -50%The biggest loss-60% brands following the EdgeRank change, however, is around reach. In studying for -70% ©2012 GroupM Nextbrands’ post types of photos, status updates, links, videos, and shares, it was determined that not all -80% Statustypes have a negative Photo Updatereturn%compared to reach Visibility Change -40.46% 19.48% Percent Change In Reach -68.19% -31.92% -59.06% Of Organic Post By Post Type On Facebookbefore the change. While ©2012 GroupM Next (After EdgeRank Algorithm Change)most types see declines, 30% Percent Change in Reach 20%reach of status updates 10% 0% Percent Change In Engagement Through Storiesincreases, signifying one -10% By Post Type On Facebook -20%option brands now have to (After Facebook EdgeRank Algorithm Change) -30% -40%increase reach to users. 150% -50% in Engagement (Stories) -60% Percentage Change 100% -70% 50% -80% Status Photo 0% Update % Visibility Change -40.46% 19.48% -68.19% -31.92% -59.06% -50% -100% ©2012 GroupM Next -150% Status Photo Update % Engagement Change 73.52% 56.76% Percent Change In Engagement 101.20% 57.10% -124.98% Through Stories By Post Type On Facebook ©2012 GroupM Next (After Facebook EdgeRank Algorithm Change) 150% ngagement (Stories) ercentage Change Gaining an Edge: The Brand Impact 100% Percent Change In Engagement Through Consumption of Facebook’s EdgeRank Algorithm Change By Post Type On Facebook50% November 2012 (After Facebook EdgeRank Algorithm Change) 0% 200% 2 tion) -50%
  4. 4. By Post©2012 GroupM Next Type On Facebook (After EdgeRank Algorithm Change) 30% Percent Change in Reach 20%For brands to further maximize the potential of organic reach now requires better engagement by 10% Percent Change In Reach Of Organic Post 0%users through stories and broader consumption metrics. Stories are active forms of participation By Post Type On Facebook -10% -20% (After EdgeRank Algorithm Change)that take place whenever a user likes, comments or shares a brand’s content. Consumption includes -30% 30% Percent Change in Reachmore passive user activities and occurs whenever a user views a video or photo, or clicks on a -40% 20% -50% 10%page post. -60% 0% -70% -10% -80% -20% StatusWhen examining what connectsUpdateusers at -30% Photo with a story level, brands can take heart in having multiple -40%options Visibility Change -40.46% 19.48% -50% -31.92% % for engagement success in the new Facebook -59.06% -68.19% environment. Most types of posts (i.e. -60%photos, status updates, links and videos) produce more stories per impression after the change -70% ©2012 GroupM Next -80% Statusto the Facebook algorithm. Shares, on the other hand, decline in engagement per impression. Photo Update % Visibility Change -40.46% 19.48% The -31.92% -68.19% latter result means -59.06% Percent Change In Engagement Through Stories that if brands are looking By Post©2012 GroupM Next Type On Facebook (After Facebook EdgeRank Algorithm Change) for higher levels of 150% engagement, they must in Engagement (Stories) Percentage Change 100% Percent Change In Engagement Through Stories types of consider the 50% By Post Type On Facebook posts they create because (After Facebook EdgeRank Algorithm Change) 0% some posts do not 150% in Engagement (Stories) -50% generate the engagement Percentage Change 100% -100% 50% that others do. -150% Status 0% Photo Update -50% % Engagement Change 73.52% 56.76% 101.20% 57.10% -124.98% -100% ©2012 GroupM Next -150% Status Photo UpdateAlso noteworthy for brands is that, before the algorithm change, roughly 2.7% of a post’s impressions % Engagement Change 73.52% 56.76% 101.20% 57.10% -124.98% Percent Change In Engagement Through Consumptionresulted in some form of user consumption, while after this change, nearly 4.3% of impressions By Post Type On Facebookresult in these forms of engagement. Algorithm Change) in activity corresponds to a 59% increase (After Facebook EdgeRank This difference ©2012 GroupM Nextin the probability 200% a post in Engagement (Consumption) 100%is engaged with by some Percent Change In Engagement Through Consumption Percentage Change 0% By Post Type On Facebookact of consumption. The (After Facebook EdgeRank Algorithm Change) -100%type of posts users will 200% in Engagement (Consumption) -200%consume in the new envi- 100% Percentage Change -300%ronment is illustrated in 0% -400% Status -100%the accompanying chart Photo Update -200%(right). Engagement Change % 34.93% -13.90% 129.77% 44.03% -291.81% -300% ©2012 GroupM Next -400% Status Photo Update % Engagement Change 34.93% -13.90% 129.77% 44.03% -291.81% Effect Engaging Material Has On Improving Organic Reach ©2012 GroupM Next (Before & After Facebook EdgeRank Algorithm Change) Gaining an Edge: The Brand Impact 80% of Facebook’s EdgeRank Algorithm Change 71.43% Effect Engaging Material Has On November 2012 70% ging Post Improving Organic Reach Reach 60% (Before & After Facebook EdgeRank 3 50% Algorithm Change)
  5. 5. (After Facebook EdgeRank Algorithm Change) 150% in Engagement (Stories) Percentage Change 100%The Truth About Engagement Post Algorithm Change 50%While advertisers now see more forms of engagement per impression of their post, these same 0%advertisers are also seeing fewer total impressions. Taken together, these trends mean that -50%advertisers should not expect an increase in the aggregate volume of engagement of their posts on -100%Facebook. This result means that brands are not gaining additional organic engagement as a result -150% Statusof the change and are only losing organic reach. Photo Update % Engagement Change 73.52% 56.76% 101.20% 57.10% -1The implications, however, are not all negative. Based on the engagement data presented in this ©2012 GroupM Nextanalysis, the EdgeRank change means that the material brands post to Facebook is being bettertargeted by the network toward users with a high brand affinity. This is due to the fact that the Percent Change In Engagement Through ConsumptionEdgeRank algorithm (in part) makes posts more visible if the user is more engaged with a brand’s By Post Type On FacebookFacebook page. In the new Facebook environment, when an advertiserFacebook a post on their Change) (After makes EdgeRank AlgorithmFacebook brand page, only serious fans will see it organically. 200% in Engagement (Consumption) 100% Percentage ChangeHaving the benefit of these insights, one myth worth busting is that0% “engaging content.” ofA common refrain has been that the secret to real organic success would-100% be found through engagingcontent. However, the data examined for this analysis shows that since-200%changes to EdgeRank, the -300%engaging content is less effective at generating organic reach. Engaging content still matters but,surprisingly, not as much as it used to. This is likely due to the fact -400% the small audience of that Status Photo Updatefans reached is more likely to be predisposed to engagement, regardless of quality, and therefore % Engagement Change 34.93% -13.90% 129.77% 44.03% -2individual post quality no longer requires as high a standard. ©2012 GroupM NextWhere Brands Go From Here Effect Engaging Material Has OnIn The New Facebook Environment Improving Organic ReachA lot remains unknown with Facebook and the (Before & After Facebook EdgeRank Algorithm Change)EdgeRank algorithm. Brands must determine the 80% 71.43%proper cadence of messaging and post type based 70% Effect of Engaging Post on Organic Reachon similar models calibrated to their specific 60% 50%business. Brands must also determine what role 40%paid advertising should play and which posts it 30% 21.43% 20%should support. While paid support remains a 10%linchpin of the overall Facebook strategy, brands 0% Before Afterneed not expect it to be the only lever capable of Effect of Engagement on Reachbridging the gap in performance created by these ©2012 GroupM Nextchanges. Projected Impact On Reach Of Optimized Posting Strategy For Brands On Facebook of Fans Exposed to Post 18% 16% 14% Gaining an Edge: The Brand Impact 12%Facebook’s EdgeRank Algorithm Change of 10% November 2012 8% 4 28% 6% Increase 4%
  6. 6. on Organic Effect of Enga 40% 30% 21.43% 20%When studying the average set of posts by the brands before and after the Facebook algorithm 10%change, we see that opportunities exist for improved reach. If the administrators of these pages are 0% Before Afterempowered with the insights derived in this study, the brands analyzed could increase their reach Effect of Engagement on Reachby 28% through strategic application.©2012 GroupM Next The changes made by Facebook Projected Impact On Reach Of Optimized Posting Strategy have been true to their stated For Brands On Facebook intent, but for advertisers that’s not Percent of Fans Exposed to Post 18% 16% entirely a good thing. What brands 14% 12% can do now in the new Facebook 10% 8% 28% environment, and in light of deeper 6% Increase insights made possible as a result 4% 2% of the EdgeRank change, is better 0% Before After Optimized understand the impact post types Percent of Users That See Organic Post have and marry that data with a Projected Percent of Users that See A Brand’s Post After Optimization publishing schedule and content©2012 GroupM Next creation plan. By doing so brandscan overcome some, if not all, of the loss in reach while enjoying increased engagement and usingpaid advertising as a supplement – rather than a full replacement. Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change November 2012 5
  7. 7. GroupM Next is the forward-looking, innovation unit of GroupM, the world’s largest global media investment management groupthat is the parent company to WPP media service agencies Maxus, MEC, MediaCom and Mindshare, as well as Catalyst Onlineand Xaxis. Together with GroupM agencies, GroupM Next focuses on the curation and application of insight-focused solutionsacross online, social, mobile and addressable channels. Through thought leadership, technology, research and education,GroupM Next delivers data-driven, actionable insights and a clear path to action to help GroupM agencies and their clientsharness the right opportunities made possible in the digital technology and new media industry environments with speed andrelevance. Access our work and discover our perspective at www.groupmnext.com.Contact us with questions or comments: cindy.spellman@groupm.com GroupM Next 111 Westport Plaza Suite 350 Saint Louis, MO 63146A WPP Company www.groupmnext.com

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