Many thousands of agents, managers and brokers use Facebook to great benefit in their commercial real estate careers. As with other social networking platforms, Facebook helps maintain the year-round business networking that professionals need. The cost in dollars is zero to set up a presence such as a page dedicated to your business, and millions of professionals have taken to the site to take advantage of the free networking.
As the site closes in on its tenth birthday, having passed major business milestones such as its 2012 initial public offering, subtle changes in how Facebook works are underway, all aimed at bolstering the company’s bottom line. Facebook makes its money not as a social networking platform, but as a delivery vehicle for highly targeted online advertising. Increasingly, that revenue is going to come from Facebook users — wether they know it or not.
Reducing The (Free) Reach, Accentuating The Paid
Facebook’s business plan includes directly monetizing the value it provides. For a commercial real estate professional, that value is in the reach the professional enjoys. When a property broker (just to take one example of a CRE pro) creates a page dedicated to her practice and posts material on that page, the basic expectation is that everybody who has “liked” that page, e.g. her followers, will see that content in their own newsfeed. She reaches her followers with her sharing of content.
That was the basic expectation with Facebook for years, but much evidence has come in that the company has radically changed the reach it allows. The unpaid reach (the industry calls it “organic” reach) is, according to many analysts on the sharp decline:
So far, it looks like brands are suffering pretty hard from the update. Ignite Social Media has put out a report after analyzing 689 posts across 21 brand pages of a variety of sizes and industries, finding that since December 1st, organic reach and organic reach percentage have each declined by 44% on average. Some, it says, have seen declines of up to 88%. One page out of the bunch saw an increase (5.6%).
“As reach declined, the raw number of engaged users plunged as well, falling on average by 35%,” writes Jim Tobin on the Ignite blog. “Some pages saw engaged users fall as much as 76%. Only one page in the data set had an increase in the number of engaged users, coming in at 0.7%.”
“Facebook once said that brand posts reach approximately 16% of their fans,” he writes. “That number is no longer achievable for many brands, and our analysis shows that roughly 2.5% is now more likely for standard posts on large pages. So, a year ago a brand could expect to reach 16 out of 100 fans and now that brand is lucky if they get 3 out of 100. Chilling news for brand pages who have invested resources to ‘build’ a large following of fans.”
Owners of business and brand pages on Facebook now face an altered playing field. In order to keep up the levels of reach that make involvement with Facebook worthwhile, Facebook offers paid promotion as a means of extending that reach. The ins and outs of paying for reach on Facebook is a topic for another post – but for now, because users aren’t told about the decline in reach, it’s important to understand that Facebook is increasingly switching to a pay-to-play networking model.