This is the root of my concern with where Facebook and Google are heading.
In the email world, you invested in building your house list, and it was likely your most valuable marketing asset.
You...
-- Controlled it
-- Could associate whatever data with it you had access to
-- You could (pending deliverability) communicate with them as frequently as you wanted for a fixed/variable rate depending on what your send costs were. For most ESPs (email service providers) there is typically a fixed platform fee, and a variable volume fee
-- Most importantly, your costs to message to your acquired audience was relatively fixed which helped balance the variable cost of acquiring them
With Facebook, they abused the trust marketers put into them. From day one the conversation was about building your brand's presence on Facebook with the "understanding" you would more or less be able to communicate with your audience freely once you invested in building the list.
I put "understanding" in quotes because there was of course nothing ever spelled out...but that was literally how it worked at the time, so it became understood to be how it worked.
The reality of what Facebook has done and where they are going has changed that relationship...
-- They want you to invest a variable (and likely ever increasing) cost to build your list within Facebook
-- They own the majority of the data on that list and their targeting tools are essentially you renting that information from them
-- They own your list, and want to charge you a variable cost via a black box algorithm to reach said list at the scale/frequency you desire
It is this last part that is the biggest issue. Email was a space where marketers had control over their ability to reach their opt-in audience, not the platform or network. But fixed-price models are not always as profitable as variable priced models run through a black box.
My broader fear is that Google has come to the same conclusion, and Inbox (and the tabs before that) is the first manifestation that Google is working on a serious monetization play for email beyond the horrid Gmail placements in AdSense and whatever targeting data they may be able to indirectly monetize.
He who owns the ability to reach that contact list has a company by the balls. End of story. Once you have that, why charge them a fixed rate when you can maximize profit by tweaking whatever variables you want whenever it suits you with regards to the costs (ie. the auction model)?
It remains to be seen if Google is going down that path, but it is clear Facebook already has. There is still hope for off-site ads with them for advertisers who know how to measure it from a conversion standpoint, and more importantly, a cross-channel attribution perspective. Social tends to be more of an awareness/upper-funnel driver when you can see the birds-eye attribution picture, with some exceptions like mobile app installs that see success from a direct response standpoint.
Smart marketers will likely focus on owning their audience data to market to them as much on their terms and a predictable cost structure as possible. Their continued ability to do so may be largely out of their control however if the companies who own the ability to reach their "list" have visions of being more than a basic fixed-price conduit.
With Facebook, they abused the trust marketers put into them. From day one the conversation was about building your brand's presence on Facebook with the "understanding" you would more or less be able to communicate with your audience freely once you invested in building the list.
Bullshit. There was never this "understanding", just an assumption by people who were too blinded by greed to do a little simple math. There is only so much attention to go around and only so many items that can be put into a persons feed before it loses any value to that person. You were only able to communicate freely to this audience because there were so few using the channel. Once it was shown to actually be effective you were competing with everyone else for that small slice of attention. Welcome to the market pal, hope you brought your wallet! If a marketer complains because everything they post each day isn't pinned to the top of people's news feeds for free then it seems to me that FB is doing it's job. I would much rather have my feed curated for things that are relevant for me than for every piece of marketing some store I once liked four years ago wants to send me.
The harsh words here are unnecessary and don't do anything for your argument.
There were actually plenty of people using the channel when advertisers still had the ability to reach their entire fanbase. There was a long period of time when this was simply the way it worked. Thus, I think it is reasonable for companies to be forgiven for thinking that they would continue to be able to reach this audience in the same manner once they invested in acquiring them.
Now, I have always thought email had more value just because of what you can do with it, but if you tell me to invest in your ad platform to drive people to signup for me to contact them on a page on your platform, and let me reach them for free after the initial investment, I think it is perfectly reasonable to feel extremely cheated when you change the terms of the deal to suddenly double-dip. There is a reason a large part of the ad industry has erupted at FB over this and why anyone spending serious money on social these days is driving all that traffic offsite to places they control, and/or using their own audience data through a DSP with FB simply serving as a "dumb" placement.
There is only so much attention to go around and only so many items that can be put into a persons feed before it loses any value to that person.
True, but it's reasonable to expect that users might've simply dialed down the noise by "un-liking" whatever pages with which they no longer wanted to be engaged.
So, I don't think it was at all unreasonable for a company to assume that it would have to compete on interest and thus ensure that its content was more compelling/engaging. That versus simply being forced to pay, else reach only 1% of the people they worked so hard to gain as "fans".
Further, if FB's direction should have been obvious to companies, as you say, then FB should certainly have known. So, while encouraging pages/likes/etc., why not telegraph to the businesses that their reach would eventually be so heavily gated behind a paywall?
You're being far too "forgiving" of FB and far too harsh on the companies that were, effectively, on the receiving end of a bait-and-switch.
Comments
This is the root of my concern with where Facebook and Google are heading.
In the email world, you invested in building your house list, and it was likely your most valuable marketing asset.
You...
-- Controlled it
-- Could associate whatever data with it you had access to
-- You could (pending deliverability) communicate with them as frequently as you wanted for a fixed/variable rate depending on what your send costs were. For most ESPs (email service providers) there is typically a fixed platform fee, and a variable volume fee
-- Most importantly, your costs to message to your acquired audience was relatively fixed which helped balance the variable cost of acquiring them
With Facebook, they abused the trust marketers put into them. From day one the conversation was about building your brand's presence on Facebook with the "understanding" you would more or less be able to communicate with your audience freely once you invested in building the list.
I put "understanding" in quotes because there was of course nothing ever spelled out...but that was literally how it worked at the time, so it became understood to be how it worked.
The reality of what Facebook has done and where they are going has changed that relationship...
-- They want you to invest a variable (and likely ever increasing) cost to build your list within Facebook
-- They own the majority of the data on that list and their targeting tools are essentially you renting that information from them
-- They own your list, and want to charge you a variable cost via a black box algorithm to reach said list at the scale/frequency you desire
It is this last part that is the biggest issue. Email was a space where marketers had control over their ability to reach their opt-in audience, not the platform or network. But fixed-price models are not always as profitable as variable priced models run through a black box.
My broader fear is that Google has come to the same conclusion, and Inbox (and the tabs before that) is the first manifestation that Google is working on a serious monetization play for email beyond the horrid Gmail placements in AdSense and whatever targeting data they may be able to indirectly monetize.
He who owns the ability to reach that contact list has a company by the balls. End of story. Once you have that, why charge them a fixed rate when you can maximize profit by tweaking whatever variables you want whenever it suits you with regards to the costs (ie. the auction model)?
It remains to be seen if Google is going down that path, but it is clear Facebook already has. There is still hope for off-site ads with them for advertisers who know how to measure it from a conversion standpoint, and more importantly, a cross-channel attribution perspective. Social tends to be more of an awareness/upper-funnel driver when you can see the birds-eye attribution picture, with some exceptions like mobile app installs that see success from a direct response standpoint.
Smart marketers will likely focus on owning their audience data to market to them as much on their terms and a predictable cost structure as possible. Their continued ability to do so may be largely out of their control however if the companies who own the ability to reach their "list" have visions of being more than a basic fixed-price conduit.
With Facebook, they abused the trust marketers put into them. From day one the conversation was about building your brand's presence on Facebook with the "understanding" you would more or less be able to communicate with your audience freely once you invested in building the list.
Bullshit. There was never this "understanding", just an assumption by people who were too blinded by greed to do a little simple math. There is only so much attention to go around and only so many items that can be put into a persons feed before it loses any value to that person. You were only able to communicate freely to this audience because there were so few using the channel. Once it was shown to actually be effective you were competing with everyone else for that small slice of attention. Welcome to the market pal, hope you brought your wallet! If a marketer complains because everything they post each day isn't pinned to the top of people's news feeds for free then it seems to me that FB is doing it's job. I would much rather have my feed curated for things that are relevant for me than for every piece of marketing some store I once liked four years ago wants to send me.
The harsh words here are unnecessary and don't do anything for your argument.
There were actually plenty of people using the channel when advertisers still had the ability to reach their entire fanbase. There was a long period of time when this was simply the way it worked. Thus, I think it is reasonable for companies to be forgiven for thinking that they would continue to be able to reach this audience in the same manner once they invested in acquiring them.
Now, I have always thought email had more value just because of what you can do with it, but if you tell me to invest in your ad platform to drive people to signup for me to contact them on a page on your platform, and let me reach them for free after the initial investment, I think it is perfectly reasonable to feel extremely cheated when you change the terms of the deal to suddenly double-dip. There is a reason a large part of the ad industry has erupted at FB over this and why anyone spending serious money on social these days is driving all that traffic offsite to places they control, and/or using their own audience data through a DSP with FB simply serving as a "dumb" placement.
True, but it's reasonable to expect that users might've simply dialed down the noise by "un-liking" whatever pages with which they no longer wanted to be engaged.
So, I don't think it was at all unreasonable for a company to assume that it would have to compete on interest and thus ensure that its content was more compelling/engaging. That versus simply being forced to pay, else reach only 1% of the people they worked so hard to gain as "fans".
Further, if FB's direction should have been obvious to companies, as you say, then FB should certainly have known. So, while encouraging pages/likes/etc., why not telegraph to the businesses that their reach would eventually be so heavily gated behind a paywall?
You're being far too "forgiving" of FB and far too harsh on the companies that were, effectively, on the receiving end of a bait-and-switch.