“Organic” is Dead, Say Hello to the Age of Paid Media

“Organic” is Dead, Say Hello to the Social Advertising Age

You had enough time to build an online platform. For free.

And if you did it right, you were able to build a brand, a minimum viable audience and authority in your niche.

Things are changing, and they’re changing fast. As you’ve probably read in different sources, Facebook made the first move by killing “Organic” Reach for Pages back in December 2013, today the Internet is filled with rants from people that refuse to believe that social networks are nothing but media companies that need to generate revenue.

Now publishers and bloggers can’t seem to rely on simply posting a piece of content and expect to organically reach that sweet 16% we all came to know and love (sort of). And if you’re barely starting a Facebook Page for your business, you can expect a lot more work than it used to take.

Whether or not Facebook Reach was intentionally affected to push ads or this is just hype, some Pages are experiencing lower than average performance. It certainly crashed in a very dramatic fashion for the SocialMouths Page, as you can see in the following image. Between December 19 and 21, it went from reaching 3.3k to an almost embarrassing 429. Just like that.

Facebook drop of organic reach

Yesterday, another announcement regarding changes to the news feed was made public. Facebook will begin to show fewer text updates from Pages and more from Friends, but Pages will probably see an increase in engagement on other types of media.

What’s definitely true is that Facebook worked hard on taking advertising to the next level during 2013, and in the following months we’ll probably continue to see more changes to its ad products and also to the News Feed algorithm.

But it’s not just Facebook, other networks like Twitter and LinkedIn have also been working on improving their advertising offerings throughout the past year. Should you expect similar moves from other networks? I don’t know, but you should start rethinking your social marketing and how your business has been reaching its audience all this time.

Lets face it, besides what’s been said about all this, the Internet in general has become a lot more competitive, and standing out from the noise is a lot harder than it was just 2 years ago.

Simply putting out epic content, optimizing your post, adding hashtags and scheduling at the best times across all networks will no longer cut it in 2014.

As my friend Jen from Make Mention Media recently pointed out… the free lunch is over.

So, is it time to jump ship and finally force yourself to take Google+ seriously? And then what, milk that cow until Google introduces its own Promoted Posts or some other type of revenue model?

Now it’s time to dig out a term you haven’t been using in the past few years: Cost per Acquisition.

Facebook is simply getting serious about revenue, and perhaps it’s time you do too. Now the million dollar question is this…

Is there life after Organic Reach?

Or perhaps the question should be… Are Facebook Ads really effective?

I’ll share with you my recent experience:

Case Study #1

For the recent launch of my course Email Marketing [not so] 101, 24.55% of sales were generated through Facebook Ads.

Course sales from Facebook

Lets break it down, traffic coming from SocialMouths is the default for most traffic, this is usual. Email (21.5%) has been historically my #1 source by far, only this time I generated 2.9% more sales from Facebook ads. I didn’t expect that.

I also realize that I could have made a lot more sales by being more aggressive on my campaigns.

Case Study #2

Then I published my new course “10 Mistakes People Make on Facebook Pages and How to Fix Them“, right during the same days my Organic Reach crashed. I ran a couple of campaigns for this too.

In this case, I had 2 goals for the campaign:

  1. Email subscriber acquisition
  2. To get an initial idea of the “Acquisition Cost”

The reason I wanted to know how much it takes to acquire a subscriber is to have a starting point and work on lowering the cost from there with more effective campaigns.

40.3% of the conversions was generated through Facebook ads, and of course for obvious reasons, there was no email campaign. The rest of the conversions came from several different sources as regular traffic.

Facebook conversions chart

I ran two ads, one for Fans and one for Non-Fans that like similar pages, here are the results:

  • The CPA for Fans was $0.55
  • And for Non-Fans was $0.81

And the conversion rate on the site was:

  • 33% (Fans)
  • 22% (Non-Fans)

CPA (Cost-per-Acquisition)

Are these numbers low or high? It really doesn’t matter, as long as it makes sense with your profit margin.

It’s a little different when you’re talking about acquisition of email subscribers because there is no immediate monetary transaction, but all you have to do is calculate the lifetime value of your subscriber.

Knowing how much you can invest in acquiring a customer will help you make better marketing decisions.

Organic vs Paid

Paid Media is not new, but most small businesses have no experience with it because they’ve been trapped in the “Social Media is supposed to be free” mindset.

But let me ask you this:

Lets say you have a product with a $35 profit and your CPA through Facebook Ads is $10. What would you prefer to get, 5 sales through organic reach or 10 through paid advertising?

Turns out you will end up making $175 with the organic approach and $250 paying for ads.

Most people will consider the $10 too high of an investment. In fact, when it comes to social media in general, most people expect to get a return with no investment. This mindset in completely wrong, and perhaps one of the reasons most small businesses fail to generate any kind of revenue, even tough they have a “presence” online. Some even have Facebook Pages with thousands of Fans but have never generated a penny.

Now, I want to make sure you understand I’m in no way suggesting you should ignore organic reach, I’m just saying it will no longer be enough as a marketing initiative.

2014

I didn’t write this post with the intention to make a prediction for 2014, I never do, but if had to give you one, I’d say that in 2014 your business will have to rely a lot more on paid media than ever before, especially if your business is young and you’re still building a following.

Expanding your digital footprint as they say, will cost you a little investment and a lot more creativity.

Other networks that already offer paid media like Twitter, Instagram or Pinterest are still young and ads are probably not as effective as Facebook’s offerings, but they will get there sooner than later.

I strongly recommend that in 2014, you start backing up your content marketing with a mix of organic and paid promotion.

How about you?

Have you been already investing in paid media? How about Facebook ads? Are you planning on integrating this in 2014? Tell us your experience in the comments below.

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  • http://rocketpost.com/ Rocket Post

    This is great Francisco. We agree, the engagement levels on our FB page (and our client’s) went down dramatically and we have been using paid content promotion more and more, and we don’t see this trend easing. Crazy, wonderful landscape we’re seeing evolve, and the nuances are fun to track (albeit a bit pricey to learn from at times lol). Keep sharing these posts…..

  • http://www.makementionmedia.com/ Jen Havice

    Thanks so much for the shout out! Yes, the free lunch is over. It’s been over for a while even before that article in Ad Age came out. Even on my small budget, I make a point of using FB ads from time to time. But, I’ll only do it if they are targeted and have a concrete conversion goal set. Otherwise, I’ve found it’s not terribly worthwhile. As always, you’ve got to work smarter not harder. I like to think it applies to more than just getting older.

  • http://www.socialmouths.com/ Francisco Rosales

    Glad you guys liked it. I think most content promotion on a Facebook Page will have to be paid this year. As long as you have a clear goal for each specific post, but if you don’t, don’t pay for it.

  • http://www.socialmouths.com/ Francisco Rosales

    Your welcome, I loved the post.

    I think it’s very simple, if you have a goal for a post, use paid media.

  • http://www.geoffreese.com/ Geoff Reese

    Thanks Francisco for making this clear. It’s always been true you gotta pay to play but it seems more so now. I want free but you’ve challenged my thinking on this. I really haven’t invested in paid media but you’ve slapped me in the face to wake up. Thanks, I think.

  • http://www.facebook.com/jensmithsocial Jen Smith

    Great article Francisco! I completely agree on your point about understanding your Cost Per Acquisition. It’s the most important metric to understand and one that many marketers and business owners don’t understand. Thanks for sharing your case study insights! Great info!

  • http://okso.com/ okso

    …and there’s the bigger picture of alignment, demonstrated well in this video http://www.youtube.com/watch?v=l9ZqXlHl65g

  • Jen Mulholland

    Really true. My fans have dropped on the views and I have used paid ads in Facebook, it now will separate real hard willing to communicate business from the put it up and let it do it’s thing. I think people are for getting what social media means. Great read.

  • http://www.socialmouths.com/ Francisco Rosales

    But it’s a positive slap…

    Thanks Geoff, good to see you here.

  • http://www.socialmouths.com/ Francisco Rosales

    I don’t think it’s because they don’t understand how to measure CPA, I think it’s about trying to “leverage” social media.

    Thanks for your comment Jen! =)

  • Pel Abbott

    A bit off topic, but I am super-sick of the pop-up email “join my list” spam when I click on an article. I hope that GOES AWAY some month soon.

  • Pel Abbott

    Otherwise, your article is right on!

  • http://JacquelineFairbrass.com/ Jacqueline Fairbrass

    Nicely simplified. If you have a financial (or ultimately financial) goal for a post, then pay for the distribution. Definitely seeing the changes.

  • http://www.socialmouths.com/ Francisco Rosales

    I’m not sure I know what you mean by “spam when you click on the article” but will like to look into it, can you explain what you’re seeing?

    I appreciate it.

  • TrevorLyman

    It’s true that if you have a product to sell and if you can sell at a profit while paying for ads, you should pay for ads. But I think Facebook is doing the wrong thing and will regret it’s new stance on advertising, pay to play, etc. Why? Well because a lot of people already paid to play by buying Facebook fans and Facebook just completely devalued all of their investment. That’s going to leave a very sore taste in a lot of people’s mouths and creates distrust. I’m very grateful I never gave Facebook any money for likes to my page (or for anything for that matter).

    Also, a lot of blogs will never pay for circulation. It just won’t make any sense for them as it will always cost more to get the visitor than the visitor will generate in ad revenue. Not everyone is selling something. Content is still the driving force behind all of these social networks and so bloggers have been shown that investing in Facebook likes doesn’t help (anymore) and so they will seek alternatives. Where the content goes the people go. Facebook is going to lose a lot of great content to other social networks and so the people will move to those networks as well.

    This shift may have some short term gains for Facebook but long term I think it is a massive mistake, one they won’t recover from.

  • http://www.socialmouths.com/ Francisco Rosales

    Hi Trevor,

    I think I agree with you in most of the things you said. The only point is, I don’t think that people that have invested in Page Like ads should feel like their investment is wasted. Let’s use Email marketing as example, there are fees based on volume of subscribers and messages sent, the audience is yours but your paying to have a vehicle to communicate with them.

    I’m not here to defend Facebook of course, but I come from traditional media and to be honest with you, I still can’t believe today I’m able to put a piece of marketing in front of a targeted audience that has expressed interest in my business, for that little money.

    Thanks for your comment. :)

  • TrevorLyman

    “The only point is, I don’t think that people that have invested in Page Like ads should feel like their investment is wasted.”

    I’m not sure I understand how this could be true. If I paid for 1,000 likes when it meant my posts would reach 20% of my audience, how can I not feel cheated now that my investment only reaches 2% of that same audience I already paid for? Certainly it’s true that at the time I bought my likes I expected my likes to give me the same 20% return I was getting at the time I purchased them. Right?

  • Pel Abbott

    It feels like spam, because every single website is doing an opt-in email pop up. It is so irritating.

  • http://www.socialmouths.com/ Francisco Rosales

    Got it. Thank you, for a moment it sounded like you were seeing it every time you clicked on a headline, not to mention that you pretty much called me a spammer… It’s all good!

    I can assure you that is not the case, it’s an invitation to join a course that took a lot of work and I’m giving away.

  • http://www.socialmouths.com/ Francisco Rosales

    Of course, I totally understand what you mean.

  • Pel Abbott

    Not just you my friend, and I like you very much and clicked to read this, didn’t I?? :)

  • http://www.socialmouths.com/ Francisco Rosales

    I know, we’re cool… just scared me for a minute there

  • http://www.flybluekite.com/ Laura Click

    Great post, Francisco. I’ve been thinking a lot about this in the past month. I wrote about the drop in Facebook reach a couple of months ago and I agree that brands must get a lot more creative and be willing to open their wallets.

    The thing is, customer acquisition on social media has always cost something (time) even though it is free to use. But now, the cost will be even greater since you must consider adding hard dollars into the equation.

    Like you, I’ve just started testing this to see if the paid ads are worth it. While it’s a shame that Facebook is forcing brands to pay to reach their own audience, the reality is that it can really work. As your friend said, “the free lunch is over.” Businesses – especially smaller ones – need to realize that investing a little in paid media can actually pay off. It’s just hard to shift the mentality since people have been getting access to social media for free for so long.

    It will be interesting to see how this shakes out in 2014!

  • http://www.socialmouths.com/ Francisco Rosales

    Hi Laura, you’re absolutely right, social media was never free. And the point here is that this goes beyond Facebook, other networks are not there yet but they will. Personally, I think it’s still worth the investment if you do your homework.

    We’ll be observing this very closely this year, that’s for sure.

  • Joe Santilli

    Do I have this right? Your CPA (cost to get someone to your site) was $0.55 and your conversion rate (purchase of $67 – the only call-to-action on the site) was 33%? So, the cost of a $67 sale was $1.67. If my assumptions are correct then your campaign is nothing short of outstanding. But the real story isn’t your CPA, CTR or PPC to get them to your site. In my way of thinking the real story is the 33% conversion rate – which is stellar.

    So let me look at your EMAILMARKETING [not so] landing page again. Hmm, nicely targeted at FB advertisers who are also suffering the capricious and perpetual algorithm changes at Google and FB. Credibility? Check. Testimonials? Check.

    Adherence to the principles of direct response marketing (strong call to action, sense of urgency, a perceived value in excess of the selling price)? Check.

    Identify and empathize? Check – using the “feel, felt, found” principle – I know how you FEEL, others have FELT the same way, but (drumroll for the solution) what I’ve FOUND . .

    On a personal note – I read your bio and found it interesting personally and professionally. Professionally? I enjoyed reading your success story and how you’ve leveraged it. Personally? I love Guatemala. I’ve been there at least 30 times. My children’s’ mother is from Guate. Beautiful country, beautiful people. And, I’m an Italian citizen.

  • Joe Santilli

    ooh, my post was deleted/censored. Adelante “Blog Marketing [not so] 101:” mas sabe el diablo por viejo que por diablo.

  • Michelle

    Very interesting post here, mirrors the Facebook media storm from last week. Influencer tools are really pushing to propel organic reach despite these changes. Have you heard of some companies that are doing this, like Klout or more in-depth like Splashscore. Would be great to hear your thoughts on this too.

  • http://antoniocalero.com/ Antonio Calero

    Great post. I cannot understand why there are marketers out there whinging and complaining every time Facebook does a change to EdgeRank or Google changes their algorithm… Advertising has always been the most effective way to reach a larger audience… I wish many of them read this article.

  • http://www.shop.graciousstore.com/ Gracious Store

    Unfortunately the social media networks are working with big businesses against the small ones who do not have much adverting capital as do the big businesses. With organic searching being a thing of the best many small businesses will be stifled to death by the cost of advertising

  • Emelie Svedberg

    Great blog post!

  • Aurindam Mukherjee

    I have been using paid campaigns to generate conversions but it’s only a matter of time that my PTA score becomes entirely dependent on the amount of money I sign up. PTA has been dropping like crazy over the past few weeks and it will be a cause of concern, however, only momentarily. There is still some organic promotional leg-room that I have. The next few weeks will be interesting.

  • Lohan

    Thanks for sharing your case study insights! Great info!

  • http://www.mostpixels.com/marketing Steve Faber

    Francisco. Damn it, did you hit the nail on the head with this one! I’ve been blogging since ’06, and while producing a great looking blog full of stellar content, and promoting the crap out of it has become easier, getting it to rank well the SERPs has become something of an abomination. I used to consider myself fairly accomplished at SEO, relationship building, and content creation, all vital to propel blogs into the upper echelon.

    Unfortunately, that’s no longer enough. My skill set has grown, and I’ve honed my writing to a razor’s edge, but you’re right, it’s a big boys’ game now, and money talks. I read an article a couple of years ago from Ryan Diess. He predicted that online media would mature, as so many other industries had in the past, driving smaller players toward irrelevance. Just as there were 5,000 automakers in 1910, and that coalesced to a handful, so it is with online media.

    Sure, it’s easier building a blog than a supercharged, V12 wondercar, but the market principles are much the same. Keep the great posts coming, and we’ll try to buck the trend….. Matt Cutts be damned, do you accept guest posts???

  • Jonny Craft

    “What would you prefer to get, 5 sales through organic reach or 10 through paid advertising?” Good point, but alongside those 10 paid ad sales how many people didn’t buy after you were charged $10 :(

  • http://jamesweltyms.com/ James Welty MS

    Great article Francisco. The bottom line is that effective content will produce decent reach unless Facebook runs it completely into the ground. Effective content = likes/shares/engagement = reach. The focus is on content as it should be in a perfect marketplace that is now Facebook. I think this article sums it up perfectly in that, even among equally capable competitors, one will emerge as the content and engagement leader and benefit the most from it: http://socialdistinct.com/blog/The-NBA-Makes-Social-Media-Look-Like-a-Slam-Dunk.html