Group M gaining an edge-brand impact of facebook algorithm change (nov-2012)

November 2012

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

Gaining an Edge:The Brand Impact of Facebook’s

EdgeRank Algorithm Change

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.

Taking A Close Look At The Impact Of Changes To The EdgeRank AlgorithmConsistent with Facebook-accepted norms, prior to the EdgeRank algorithm change, the brands

studied had an average reach of roughly 16%. Following the change, the percentage drops by

38%. The upside for brands is 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.

1

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

November 2012

Percent Of Facebook Users That See An Organic Post By A Brand They Like

(Before & After EdgeRank Algorithm Change)

Before After

15.56%

9.62%

Percent of Users That See Organic Post

Percent Change In Reach Of Organic Post By Post Type On Facebook

(After EdgeRank Algorithm Change)

Average Post Engagement Through Stories(Before & After Facebook EdgeRank Algorithm Change)

Before After

0.76%

1.49%

Average Post Engagement

Per

cen

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Imp

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Res

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in E

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PhotoStatusUpdate

-80%-70%-60%-50%-40%-30%-20%-10%

0%10%20%30%

Per

cen

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han

ge

in R

each

-40.46%% Visibility Change -68.19% -31.92% -59.06%19.48%

©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next

Percent Change In Engagement Through Stories By Post Type On Facebook

(After Facebook EdgeRank Algorithm Change)

PhotoStatusUpdate

-150%

-100%

-50%

0%

50%

100%

150%

Per

cen

tag

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han

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in E

ng

agem

ent

(Sto

ries

)

73.52%% Engagement Change 101.20% 57.10% -124.98%56.76%

©2012 GroupM Next

Percent Change In Engagement Through Consumption By Post Type On Facebook


PhotoStatusUpdate

-400%

-300%

-200%

-100%

0%

100%

200%

Per

cen

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agem

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(Co

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mp

tio

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34.93%% Engagement Change 129.77% 44.03% -291.81%-13.90%

©2012 GroupM Next

38%Drop

96%Lift

80%

70%

60%

50%

40%

30%

20%

10%

0%

18%16%14%12%10%

8%6%4%2%0%

Projected Impact Of Optimized Posting Strategy For Brands On Facebook

Before After OptimizedPercent of Users That See Organic Post

Projected Percent of Users that See A Brand’s Post After Optimization

Per

cen

t o

f F

ans

Exp

ose

d t

o P

ost

©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

1.5%

1.0%

0.5%

0.0%

Effect Engaging Material Has On Improving Organic Reach

(Before & After Facebook EdgeRank Algorithm Change)

Before After

71.43%

21.43%

Effect of Engagement on Reach

Eff

ect

of

En

gag

ing

Po

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on

Org

anic

Rea

ch

©2012 GroupM Next

2

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.


November 2012



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

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Imp

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Res

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PhotoStatusUpdate

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0%10%20%30%

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©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

-150%

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(Sto

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©2012 GroupM Next



PhotoStatusUpdate

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©2012 GroupM Next

38%Drop

96%Lift

80%

70%

60%

50%

40%

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20%

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0%

18%16%14%12%10%

8%6%4%2%0%




Per

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

1.5%

1.0%

0.5%

0.0%



Before After

71.43%

21.43%


Eff

ect

of

En

gag

ing

Po

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on

Org

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©2012 GroupM Next



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

cen

tag

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Imp

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Res

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PhotoStatusUpdate

-80%-70%-60%-50%-40%-30%-20%-10%

0%10%20%30%

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©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

-150%

-100%

-50%

0%

50%

100%

150%

Per

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(Sto

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©2012 GroupM Next



PhotoStatusUpdate

-400%

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-200%

-100%

0%

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(Co

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©2012 GroupM Next

38%Drop

96%Lift

80%

70%

60%

50%

40%

30%

20%

10%

0%

18%16%14%12%10%

8%6%4%2%0%




Per

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ans

Exp

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

1.5%

1.0%

0.5%

0.0%



Before After

71.43%

21.43%


Eff

ect

of

En

gag

ing

Po

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on

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anic

Rea

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©2012 GroupM Next

3

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.

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.


November 2012



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

cen

tag

e o

f P

ost

Imp

ress

ion

s T

hat

Res

ult

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agem

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Org

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PhotoStatusUpdate

-80%-70%-60%-50%-40%-30%-20%-10%

0%10%20%30%

Per

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in R

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©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

-150%

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50%

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150%

Per

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©2012 GroupM Next



PhotoStatusUpdate

-400%

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©2012 GroupM Next

38%Drop

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18%16%14%12%10%

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Per

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

1.5%

1.0%

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Before After

71.43%

21.43%


Eff

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©2012 GroupM Next

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).



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

cen

tag

e o

f P

ost

Imp

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PhotoStatusUpdate

-80%-70%-60%-50%-40%-30%-20%-10%

0%10%20%30%

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each


©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

-150%

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(Sto

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©2012 GroupM Next



PhotoStatusUpdate

-400%

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©2012 GroupM Next

38%Drop

96%Lift

80%

70%

60%

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40%

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20%

10%

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18%16%14%12%10%

8%6%4%2%0%




Per

cen

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f F

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

1.5%

1.0%

0.5%

0.0%



Before After

71.43%

21.43%


Eff

ect

of

En

gag

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Po

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on

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Rea

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©2012 GroupM Next

4

The Truth About Engagement Post Algorithm ChangeWhile 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.


November 2012



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

cen

tag

e o

f P

ost

Imp

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ion

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hat

Res

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in E

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PhotoStatusUpdate

-80%-70%-60%-50%-40%-30%-20%-10%

0%10%20%30%

Per

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each


©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

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©2012 GroupM Next



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©2012 GroupM Next

38%Drop

96%Lift

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70%

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50%

40%

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20%

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0%

18%16%14%12%10%

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

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2.0%

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Before After

71.43%

21.43%


Eff

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©2012 GroupM Next

Where Brands Go From Here In The New Facebook EnvironmentA 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.

5


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.

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.



Before After

15.56%

9.62%





Before After

0.76%

1.49%


Per

cen

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©2012 GroupM Next

©2012 GroupM Next

©2012 GroupM Next



PhotoStatusUpdate

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©2012 GroupM Next

38%Drop

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©2012 GroupM Next

28%Increase

18%16%14%12%10%

8%6%4%2%0%

2.0%

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Before After

71.43%

21.43%

Effect of Engagement on ReachE

ffec

t o

f E

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agin

g P

ost

o

n O

rgan

ic R

each

©2012 GroupM Next

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: [email protected]

GroupM Next111 Westport Plaza

Suite 350Saint Louis, MO 63146www.groupmnext.comA WPP Company

Group M gaining an edge-brand impact of facebook algorithm change (nov-2012)

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