The Facebook Newsfeed Changes

A few weeks ago, Facebook announced that it is changing the way its newsfeed works to deprioritize publisher content and, instead, to prioritize "bringing people closer together." Facebook said outright "[b]ecause space in News Feed is limited, showing more posts from friends and family and updates that spark conversation means we’ll show less public content, including videos and other posts from publishers or businesses." Given that Facebook is the largest source of referral traffic for many publishers, this has a significant impact for the industry. This will also potentially decrease the amount of time that consumers spend on Facebook, impacting their own revenue, but that's beyond the scope of this Lift Letter.

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The most obvious impact, of course, is that lower prioritization of publisher content in the newsfeed means less traffic to publishers, which means fewer ad impressions. This naturally means publishers make less money, which will be especially acute for those publishers that have above-average rates of Facebook referrals. It has often been said that Facebook traffic is rented, and while Facebook may be a quick way to significantly scale an audience, the publisher never truly owns that audience until they have a direct relationship - and the rent can change at any time. It creates a precarious situation for those publishers that lack direct relationships with their audience. Facebook - much like Google, in changing its search algorithms (especially the Panda update) - has been fickle with the content it rewards, and this may be the most extreme example. This is a particularly notable course correction from the Mark Zuckerberg's 2014 sentiment that Facebook's "goal is to build the perfect personalized newspaper for every person in the world."

This change has several practical implications for publishers. First, it means some will simply go out of business. Those that have high costs and relied on a certain level of Facebook traffic may not be able to survive. For the rest of the publishing community, they will follow some combination of making do with lower levels of traffic and pursuing alternative means to create more direct relationships with the readers. An interesting aside is that Facebook was substantially not bot traffic, meaning it should be expected that the average percentage of non-human traffic will increase on publishers that had meaningful Facebook referrals (just the rate, not the incidence of bot traffic)

Apple News is expected to be a meaningful new source of investment for the relevant subset of publishers, though monetization options are currently limited (there are rumors of a DoubleClick integration eventually, but TBD). Apple News is a news tool that often uses push notifications to engage traffic for meaningful news events.  That said, much like Facebook, Apple News is a rented audience that engages through a third party and it alone makes decisions about the content to push. Further, lifestyle publishers should not expect to see any significant engagement via Apple News. LittleThings, for example, sees less than 5% of its traffic from Apple News, compared to an average of 87% of traffic from Facebook for lifestyle publishers in general. Publishers may increase their focus on their own app, platforms like Snap, or paid promotion on Facebook. Buzzfeed, shortly after this change was announced, began promoting its own app on Facebook to create a more direct relationship with their readers. Historically news app usage has been relatively low compared to Facebook, but it is not unreasonable that this might change.  

For brands advertising on Facebook, organic reach has long been quite low. A cynical observer could note the similarities between how Facebook encouraged brands to connect with the consumers for free via Pages, then switched to a paid model - and how Facebook encouraged publishers to develop their audiences on the platform and may effectively switch to a similar paid model. While content that drives engagement, including branded content, may continue to see some level of organic reach - it's very likely that the vast majority of publishers will see their organic reach drop. For publishers buying engagement for their branded content, the net effect is that the cost will likely increase - but by exactly how much remains to be seen. 

At around the same time as this newsfeed announcement, Facebook has also stated that it will relatively increase prioritization of "trustworthy" news. We've previously discussed the challenges around so-called "fake news" and Facebook is now relying on surveys of users to identify trusted sources, rather than expert analysis, machine learning, etc. This may be questionable and may reinforce certain thought bubbles depending on the precise implementation. Further, as news moves from an estimated 5% to 4% of the news feed, the implementation decisions will be more important than ever. 

By continuing to have a direct relationship with every publisher we work with, and by not employing a self-service model that could miss the important vetting process to ensure quality, trustworthy publishers, TripleLift hopefully remains on the right side of as many changes as possible. Further, as we are committed to helping publishers monetize across every channel in a user-centric fashion, the fact that the newsfeed changes may increase the distribution across channels in which users consume content plays directly to our stated mission.