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Businesses Always Have to Pay, Always.

Businesses Always Have to Pay, Always. 5885-daily-golden-nugget-942Something's been happening over at Facebook since December 2013 that affects how the overall methods of how customers see your social posts...

If you carefully examine your own Facebook Insights, you should see what many of my own customers are seeing. Generally speaking, there's a massive decline in the number of your Fans that see the social posts your business is publishing.

Although Facebook doesn't provide statistics on personal accounts, you might have also noticed that while your business stats were declining, the number of people replying to your personal posts has increased.

Facebook made an adjustment to their system that lowered the amount of business posts you saw in your News Feed, and increased the number of post by your friends. From a personal point of view, this seems like a good scenario. The consequences of Liking business pages on Facebook is that you were always flooded with their daily posts. This change allows you, and everyone else, to more enjoy what your friends are doing and saying.

Except that from a business point of view, many retail jewelers started to rely on their Facebook advertising to bring in sales. It was free advertising--other than paying an employee or agency to manage your Facebook account.

In December, it seemed like the free advertising model almost went away, and the only way to get a lot of your Fans to see your messages was to sponsor them. Facebook has a few different ways you can pay for advertising. You can purchase an ad to appear on the right side of the screen, you can target specific groups of people, or you can simply pay to have one of your simple status posts appear in the News Feed of your Fans. That last option, paying to have your post seen, that's a "sponsored post."

From a small business point of view, this is bad. It means you have to spend more money to get your message out there, except it's really no different than paying for your newspaper ad, your billboard, or your direct mailing. Also, it's no different than paying for advertisement on Google AdWords.

Apparently Facebook decided that businesses shouldn't be allowed to use their system for free anymore, and essentially, they transformed their service into a paid model for businesses.

I remember way back in 1993 when I first started my business and my father came with me to the bank to open my first business bank account. At the time, I had a free personal checking account from my bank and it seemed reasonable to use the same bank for my business account, after all, why not have free business checking too?

But then my father hit me with the reality of business, in that, all businesses have to pay fees. Not only did my business have to pay bank fees, but then I found out that my business utility bills were going to be higher, and the phone bill would be higher, and the business car insurance would be higher. All these things added up to the proverbial "cost of doing business."

I'm recounting the story of my business beginning here because it really is similar to how the internet is evolving. Facebook, Yelp, Twitter, Foursquare, and many other online services were once free for everyone to use (free not counting the cost of time), but now they are all transforming to paid models for businesses.

Perhaps Google did it right. They launched their AdWords platform in October 2000, long before most people started using the service. By the time Google became King of Search, everyone was already comfortable with the paid advertising model.

Today things are different and websites, social networks, and smartphone apps gain popularity at the speed of light. New business might have millions of users by the time they realize they need to switch to a paid service for businesses. But we all cry foul instead of realizing that it's only fair.

Every business has employees and overhead, and you can't keep giving away all your services for free.

Now that Facebook has zapped the effectiveness of "free" advertising, those social methods of posting simple questions or daily photos simply aren't doing their job any more. It almost seems silly to keep paying your employee, or an outsourced agency, to keep doing the same thing they were doing prior to December 2013.

So what should you do today?

I don't yet have an absolute answer on this yet because I don't have absolute tracing results yet. The data that I do have is tainted by the Holiday Season and then Valentine's Day activity. I won't be able to give you hard answers until I can compare activity from March - August 2013 with the same period in 2014... Sorry that's so far off, but from a scientific point of view, anyone telling you "this is exactly how it works now" is simply lying to you.

What I know for sure is that paid marketing techniques haven't really changed in 40 years. The marketing mediums have changed, and the messages got faster, but the techniques haven't. I always think that the best ads are those that tap into emotion, and I have to think that a Facebook Business Page needs to tap into that emotion when they are paying for ads.

Just to be clear, as a business, you should not sponsor every single one of your posts. Keep attempting to engage your Fans as you normally do, but you also have to allocate money to sponsor your sale announcements, event posts, changes to store hours, and anything else that you really want your customers to see.

For those retail jewelers that are upset by the added cost of now needing to advertise on Facebook, I'd like to challenge you to reevaluate your entire marketing plan. Facebook Ads and Google AdWords have methods of tracking the effectiveness of what you pay for. Perhaps you could easily reallocate advertising dollars from untrackable media to these more efficiently trackable media.

As I bring this Daily Nugget to a close I'd like to bring your attention to an editorial published on Business Insider back on February 13, 2014. The title is "The Hard Truth About How The Facebook News Feed Works Now," and it inspired me to publish what I had been thinking for a while.

AT: 03/04/2014 09:38:25 PM   LINK TO THIS GOLD NUGGET
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