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Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change Authors: Chris Copeland, CEO, GroupM

Gaining an Edge:

The Brand Impact of Facebook’s EdgeRank Algorithm Change

Authors: Chris Copeland, CEO, GroupM Next Nate Lee, Ph.D., Analytics Manager, GroupM Next Brandon Fischer, Partner, Director, Predictive Insights, GroupM Next

November 2012

A lot has been made of the economics of Facebook in the wake of this summer’s IPO. At times it has appeared that the only thing more difficult than keeping 1 billion users happy is keeping investors and the Street satisfied. This is why every move made by the social network is scrutinized, not only for 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 to their follower base. After encouraging brands to amass followers at scale, Facebook implemented significant changes to its EdgeRank algorithm earlier this fall.

At the core of the change was a stated desire by the social network to improve consumer experience, acknowledging the impact to brands would be that the reach of an individual post would diminish, but that post engagement should improve. The questions raised from this move have been about the overall impact of these two implications and the alternative options available to ensure continued success for brands in a channel that has grown in importance, owing to the large fan bases established to date.

Analyses conducted across the Facebook pages of 25 brands by the GroupM Next Predictive Insights team in conjunction with M80, a GroupM-owned social media and community activation agency, reveals results that are consistent with the original expectations set by Facebook, yet with underlying challenges and potential opportunities.

A lot has been made of the economics of Facebook in the wake of this summer’s

Taking A Close Look At The Impact Of Changes To The EdgeRank Algorithm

Consistent with Facebook-accepted norms, prior to the EdgeRank algorithm change, the brands studied had an average reach of roughly 16%. (For this analysis, reach is defined as the 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 By A Brand They Like (Before &
Percent Of Facebook Users That See An Organic Post
By A Brand They Like
(Before & After EdgeRank Algorithm Change)
18%
15.56%
16%
14%
12%
9.62%
38%
10%
8%
Drop
6%
4%
2%
0%
Before
After
Percent of Users That See Organic Post
Organic Reach of Facebook Posts

that with a decrease in exposure comes increased engagement by users their posts reach, with brands experiencing a 96% lift in engagement with individual posts following the change.

©2012 GroupM Next

A lot has been made of the economics of Facebook in the wake of this summer’s
A lot has been made of the economics of Facebook in the wake of this summer’s

Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change

November 2012

Average Post Engagement Through Stories (Before & After Facebook EdgeRank Algorithm Change) 2.0% 1.49% 1.5% 96%
Average Post Engagement Through Stories
(Before & After Facebook EdgeRank Algorithm Change)
2.0%
1.49%
1.5%
96%
1.0%
0.76%
Lift
0.5%
0.0%
Before
After
Average Post Engagement
Percentage of Post Impressions
That Result in Engagement

©2012 GroupM Next

On the surface there appears little amiss with the promise by Facebook and the subsequent delivery — that is until you examine the implications of scale that come with operating on a site having more than a billion users and brands with millions of fans. When put into this context, the

dramatic lift in engagement simply cannot offset the decline a brand experiences in post exposure.

For brands, this new reality presents a challenge. Obviously there are paid solutions now available on Facebook, which many experts have suggested is the motivation behind this shift more so than improved

consumer experience. The data studied by GroupM Next suggests that, as a result of the change, brands now have developing insights which can help to further shape their organic strategy without becoming solely paid dependent.

The biggest loss for brands following the EdgeRank change, however, is around reach. In studying

brands’ post types of photos, status updates, links, videos, and shares, it was determined that not all types have a negative

return compared to reach before the change. While most types see declines, reach of status updates increases, signifying one option brands now have to increase reach to users.

Percent Change In Reach Of Organic Post By Post Type On Facebook (After EdgeRank Algorithm Change)
Percent Change In Reach Of Organic Post
By Post Type On Facebook
(After EdgeRank Algorithm Change)
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%
Status
Photo
Update
% Visibility Change
-40.46%
19.48%
-68.19%
-31.92%
-59.06%
Percent Change in Reach

©2012 GroupM Next

Average Post Engagement Through Stories (Before & After Facebook EdgeRank Algorithm Change) 2.0% 1.49% 1.5% 96%
Average Post Engagement Through Stories (Before & After Facebook EdgeRank Algorithm Change) 2.0% 1.49% 1.5% 96%

Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change

November 2012

For brands to further maximize the potential of organic reach now requires better engagement by users through stories and broader consumption metrics. Stories are active forms of participation that take place whenever a user likes, comments or shares a brand’s content. Consumption includes more passive user activities and occurs whenever a user views a video or photo, or clicks on a page post.

When examining what connects with users at a story level, brands can take heart in having multiple options for engagement success in the new Facebook environment. Most types of posts (i.e. photos, status updates, links and videos) produce more stories per impression after the change to the Facebook algorithm. Shares, on the other hand, decline in engagement per impression.

Percent Change In Engagement Through Stories By Post Type On Facebook (After Facebook EdgeRank Algorithm Change)
Percent Change In Engagement Through Stories
By Post Type On Facebook
(After Facebook EdgeRank Algorithm Change)
150%
100%
50%
0%
-50%
-100%
-150%
Status
Photo
Update
% Engagement Change
73.52%
56.76%
101.20%
57.10%
-124.98%
Percentage Change
in Engagement (Stories)

©2012 GroupM Next

The latter result means that if brands are looking for higher levels of

engagement, they must

consider the types of

posts they create because

some posts do not

generate the engagement

that others do.

Also noteworthy for brands is that, before the algorithm change, roughly 2.7% of a post’s impressions resulted in some form of user consumption, while after this change, nearly 4.3% of impressions result in these forms of engagement. This difference in activity corresponds to a 59% increase in the probability a post

is engaged with by some act of consumption. The type of posts users will consume in the new envi- ronment is illustrated in the accompanying chart (right).

Percent Change In Engagement Through Consumption By Post Type On Facebook (After Facebook EdgeRank Algorithm Change)
Percent Change In Engagement Through Consumption
By Post Type On Facebook
(After Facebook EdgeRank Algorithm Change)
200%
100%
0%
-100%
-200%
-300%
-400%
Status
Photo
Update
% Engagement Change
34.93%
-13.90%
129.77%
44.03%
-291.81%
Percentage Change
in Engagement (Consumption)

©2012 GroupM Next

For brands to further maximize the potential of organic reach now requires better engagement by users
For brands to further maximize the potential of organic reach now requires better engagement by users

Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change

November 2012

  • The Truth About Engagement Post Algorithm Change While advertisers now see more forms of engagement per impression of their post, these same advertisers are also seeing fewer total impressions. Taken together, these trends mean that advertisers should not expect an increase in the aggregate volume of engagement of their posts on Facebook. This result means that brands are not gaining additional organic engagement as a result of the change and are only losing organic reach. The implications, however, are not all negative. Based on the engagement data presented in this analysis, the EdgeRank change means that the material brands post to Facebook is being better targeted by the network toward users with a high brand affinity. This is due to the fact that the EdgeRank algorithm (in part) makes posts more visible if the user is more engaged with a brand’s Facebook page. In the new Facebook environment, when an advertiser makes a post on their Facebook brand page, only serious fans will see it organically. Having the benefit of these insights, one myth worth busting is that of “engaging content.” A common refrain has been that the secret to real organic success would be found through engaging content. However, the data examined for this analysis shows that since the changes to EdgeRank, 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 that the small audience of fans reached is more likely to be predisposed to engagement, regardless of quality, and therefore individual post quality no longer requires as high a standard.

  • Where Brands Go From Here In The New Facebook Environment A lot remains unknown with Facebook and the EdgeRank algorithm. Brands must determine the proper cadence of messaging and post type based on similar models calibrated to their specific business. Brands must also determine what role paid advertising should play and which posts it should support. While paid support remains a linchpin of the overall Facebook strategy, brands need not expect it to be the only lever capable of bridging the gap in performance created by these changes.

Effect Engaging Material Has On Improving Organic Reach (Before & After Facebook EdgeRank Algorithm Change) 80%
Effect Engaging Material Has On
Improving Organic Reach
(Before & After Facebook EdgeRank
Algorithm Change)
80%
71.43%
70%
60%
50%
40%
30%
21.43%
20%
10%
0%
Before
After
Effect of Engagement on Reach
Effect of Engaging Post
on Organic Reach

©2012 GroupM Next

The Truth About Engagement Post Algorithm Change While advertisers now see more forms of engagement
The Truth About Engagement Post Algorithm Change While advertisers now see more forms of engagement

Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change

November 2012

When studying the average set of posts by the brands before and after the Facebook algorithm change, we see that opportunities exist for improved reach. If the administrators of these pages are empowered with the insights derived in this study, the brands analyzed could increase their reach by 28% through strategic application.

Projected Impact On Reach Of Optimized Posting Strategy For Brands On Facebook 18% 16% 14% 12%
Projected Impact On Reach Of Optimized Posting Strategy
For Brands On Facebook
18%
16%
14%
12%
10%
28%
8%
6%
Increase
4%
2%
0%
Before
After
Optimized
Percent of Users That See Organic Post
Projected Percent of Users that See A Brand’s Post After Optimization
Percent of Fans Exposed to Post

©2012 GroupM Next

The changes made by Facebook have been true to their stated intent, but for advertisers that’s not

entirely a good thing. What brands can do now in the new Facebook environment, and in light of deeper insights made possible as a result of the EdgeRank change, is better understand the impact post types

have and marry that data with a publishing schedule and content

creation plan. By doing so brands can overcome some, if not all, of the loss in reach while enjoying increased engagement and using

paid advertising as a supplement – rather than a full replacement.

When studying the average set of posts by the brands before and after the Facebook algorithm
When studying the average set of posts by the brands before and after the Facebook algorithm

Gaining an Edge: The Brand Impact of Facebook’s EdgeRank Algorithm Change

November 2012

GroupM Next is the forward-looking, innovation unit of GroupM, the world’s largest global media investment management
GroupM Next is the forward-looking, innovation unit of GroupM, the world’s largest global media investment management

GroupM Next is the forward-looking, innovation unit of GroupM, the world’s largest global media investment management group that is the parent company to WPP media service agencies Maxus, MEC, MediaCom and Mindshare, as well as Catalyst Online and Xaxis. Together with GroupM agencies, GroupM Next focuses on the curation and application of insight-focused solutions across 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 clients harness the right opportunities made possible in the digital technology and new media industry environments with speed and relevance. Access our work and discover our perspective at www.groupmnext.com.

Contact us with questions or comments: cindy.spellman@groupm.com

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GroupM Next 111 Westport Plaza Suite 350 Saint Louis, MO 63146 www.groupmnext.com