Will Facebook Newsfeed Changes Negatively Impact Social Commerce?

Will Facebook Newsfeed Changes Negatively Impact Social Commerce?

Social commerce trends to a large extent dominated digital commerce over the course of 2017. New developments were initiated or further rolled out by Facebook, Instagram, Pinterest, YouTube and Snapchat around native e-commerce stores and ‘shoppable posts’ that facilitated the entire advertising to browsing to purchase cycle natively within social media channels. Brands and advertisers reacted enthusiastically to the potential new revenue opportunities seen in these social commerce trends. Significant resources were dedicated to tapping into them and 2018 social commerce budgets increased.

However, this week’s shock announcement by Facebook that it was moving to significantly reduce the presence of content published by businesses, brands and media from its ‘Newsfeed’, in favour of refocusing on ‘friends and family’ content. Private users of the social media giant have largely cheered the development, seen as the company recognising that its long term business interests are best served by maintaining Facebook as a ‘social network’.
However, the development is expected to hit brands that have focused marketing efforts on building up ‘organic’ reach on Facebook hard. The value of featuring in users’ Newsfeeds is of particular importance to brands and companies who have limited budgets to pay for pay per click advertising on Facebook and instead invested time and resources into building up a community of ‘followers’ on Facebook. Small and medium sized businesses are likely to be particularly impacted by the new policy.

Sceptics argue that Facebook’s motivation for the move lies less in its publically announced aim to return the social media platform to a focus on engaging with friends and family-produced content and more in boosting paid advertising. Newsfeed posts released by brands rely on users ‘sharing’ them, or appearing in the feeds of those who have ‘liked’ their company or brand page for exposure. They are not paid for directly though reach can be ‘boosted’ by paying a fee to Facebook.

Max Navarra, social media manager for The Next Web, an online media and tech events organizer commented:

“ You can’t help thinking if you are cynical that it will increase the money spent on paid reach now that organic reach has been virtually wiped out.”

In theory, Facebook’s sweeping new Newsfeed policy does not directly impact on social commerce functionalities in terms of purchases being made natively within the social media. What it does change is the tools brands have at their disposal to engage with their Facebook audience. Many brands have spent significantly on content marketing strategies that have gathered them thousands to millions of ‘likes’ and followers on Facebook.

Much of the ROI on that investment should have come from strong ‘organic’ reach subsequently built up, with the Newsfeed of their audience then strongly featuring new content released. That will no longer be the case and brands will now either have revert to a paid advertising strategy to push their social commerce revenues or find new, innovative ways to otherwise engage with those who have ‘liked’ and followed their Facebook page.

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