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Facebook Advertising Costs Could “Skyrocket” From Algorithm Changes

Facebook Advertising Costs Could “Skyrocket” From Algorithm Changes

PerformanceIN

Research finds the price of Facebook advertising could increase by 79%.

The cost of advertising on Facebook could “skyrocket” following the social media giant’s algorithm changes, according to commentary first published on Ad Week.

With personalised posts from users and live videos encouraging discussion now a priority on the News Feed ahead of content from brands and publishers, some outlets are seeking alternative options to advertise products, while some speculate where Facebook will be heading to next as as a paid advertising platform.

According to Kunal Gupta, CEO of technology platform provider for publishers Polar, the recent changes from Facebook “should not be taken lightly”, as his analysis suggests the price of advertising could go up rapidly in the coming months.

Businesses already using Facebook will begin to see the visibility of their organic posts fall as a direct result of the algorithm changes; Gupta claims the platform is becoming less attractive as a result of the network’s push for “time well spent” over “more time spent” by users.

So where does this leave advertisers who reach audiences both organically and through paid advertising? According to Polar and AdWeek’s research - broken down into detail here - available supply may fall which could ultimately lead to the price of advertising on Facebook to go up.

By applying the “time well spent vs more time spent” theory, the research finds that a decline of time spent by 20% over 12 months while the amount of ads seen per hour remains static, could see the price of Facebook advertising increase by as much as 79% with 12 months.

Facebook’s refocus could mean fewer opportunities available for advertisers to reach their intended audience both organically and through paid advertising if Gupta’s predictions become reality, and yet, with Facebook offering unmatched audience targeting capabilities, it would remain a highly-attractive platform for ad budgets.

Impact on affiliate

When viewed from this perspective, the findings shed much more light on the motivations behind the algorithm tweak rolled out under the guise of keeping things “personal”. Within its own domain, PerformanceIN explored the impact of these updates within the affiliate industry.

With questions around the financial motives behind the changes, PerformanceIN discovered that this could be an attempt from Facebook to tighten control of ad spending from businesses.

According to Matthew Higgins, head of affiliates at agency iProspect, Facebook would be gaining more from advertisers with ad placements they can control to offer certain number of views - resulting in lower volumes on the users feed but more importantly advertisers “paying more for the placement”.

Or as Ursula Petula Barzey, founder of travel and lifestyle blog Carribean & Co has put it “Facebook is now a pay to play environment for businesses and brands”.

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Mustafa Mirreh

Mustafa Mirreh

Supporting the editorial team in PerformanceIN, Mustafa brings you the latest day-to-day news updates from the world of performance marketing, while also doing social media promotion, live reporting, blogging and interviewing with key industry players and stakeholders.

Based in Bristol, Mustafa graduate with a marketing degree before delving into the world of music journalism through self-starting an online blog and collaborating with other publications. Now he has joined the PI team and has set his sights on succeeding in digital marketing.

Read more from Mustafa

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