Facebook's News Feed tests could free up ad space it desperately needs
Facebook spooked media outlets this week when it confirmed a test in which it kicked all publishers and brands out of the News Feed.
But the news isn't much of a surprise. The social network has been gradually winding down the number of users reachable without paid promotion for years as its has made room for more ads. Non-publisher brands are already effectively shut out.
A report from advertising giant Ogilvy predicted in 2014 that a day would inevitably come when Facebook would no longer allow businesses to use the platform for free at all, a condition it termed "Facebook Zero."
SEE ALSO:Facebook tests removing publishers from News Feed—unless they pay"Organic reach of the content brands publish in Facebook is destined to hit zero," the researchers wrote then. "It’s only a matter of time."
Facebook has run out of places to put ads.
This more or less already happened to brands that built up a presence on Facebook. Now, it could happen to publishers too—and the reason is simple: Facebook has run out of places to put ads. There's only so many it can cram into your News Feed before it starts to hurt user experience, and that limit's just about maxed out.
This isn't a secret. The company has been warning investors for months that its growth would "meaningfully" slow this year unless it opens up considerable amounts of new space or compensates through other means.
"The optimal ad load is really a mix of art and science," Facebook chief financial officer David Wehner said in an earnings call last year, according to Adweek. "We’ve carefully tracked the impact of ads on the user experience over the last several years."
Facebook says its research shows that users usually prefer seeing posts from their friends and family to those of news outlets and brands they follow. The fewer of the latter category it promotes for free, the more it can show as ads without bombarding users. And the more it can press publishers to turn high-quality posts in paid ads.
The company's new test allows it to free up ad space in that manner while also building a separate "Explore" feed that could house its own lucrative placements, provided people actually start paying attention to it.
But it comes at the expense of the traffic flowing to publishers, many of which now rely on the site for the bulk of their distribution.
In Slovakia, one of the six markets subjected to the trial, publishers have already seen some of the most dramatic plummets in reach and engagement they've ever recorded. The country's sixty biggest media outlets have notched four times fewer interactions in the time since the test began, according to research firm CrowdTangle. One Slovakian newspaper said its traffic fell by two thirds.
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The test follows a series of algorithm tweaks over the past couple years that have prioritized user-generated content over news articles and other unpaid commercial posts, dragging down traffic for publishers across the board.
The social network's ultimate goal seems to be to filter certain types of content into separate, siloed feeds, within which it could sell even more News Feed-style ads.
It's already splintered the News Feed further with its long-form original video hub and its Craiglist-like Marketplace feed, where it recently began selling ads among the second-hand listings.
But nothing's really stopping it from going nuclear on publishers as well.
The company's also been toying with the most efficient ways to show ads in its Messenger platform for months, a concept that wasn't possible before the company broke out the tool into a separate app a few years ago.
Despite its warnings about revenue growth, there are other ways Facebook can make up for its ad load limitations. It can bring more people to the platform, make better-performing ads that can command higher rates, or find untapped potential in subsidiaries like Instagram and WhatsApp.
But nothing's really stopping it from going nuclear on publishers as well.
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