Facebook’s newsfeed update – will marketers suffer?
Facebook founder Mark Zuckerberg gave investors, employees, and Facebook users a shock last week when he promised to “fix” the social media giant. We reported on the news yesterday, but the crux of it is that Zuckerberg wants to prioritise “friends and family” in users’ newsfeeds, rather than businesses. The move spooked Wall Street, and the company’s share price has declined in the days following Zuckerberg’s pledge – as has Zuckerberg’s personal fortune, which is $3.3 billion smaller since the news (at time of writing).
Despite losses, Facebook’s share price is still up 40% over 12 months
SOURCE: Yahoo Finance
Zuckerberg says he is putting his “legacy” first, and claims that the changes will, in the long run, benefit Facebook, making it a better platform, and thereby leading to greater success further down the line. Investors might be nervous, but Zuckerberg has a point. He said that feedback demonstrated corporate posts were “crowding out the personal moments that lead us to connect more with each other.” Fixing that has to be good for a business that is built on connection.
If Facebook can improve the quality of its product, that will ultimately be good for everyone: users, advertisers, publishers and, of course, investors. And while some analysts may be nervous about the immediate future, and potential loss of advertising revenue, there is a wider perception that Zuckerberg is future proofing his platform, making it more robust, harder to disrupt, and more valuable.
Farhad Divecha, managing director of north London digital marketing agency AccuraCast, is a long-time Facebook marketer, having used the platform to promote celebrity clients like British chef Jamie Oliver. His prognosis? Zuckerberg is making the right move. Speaking to the press, he said: “Facebook’s making more money as brands get forced to spend on advertising rather than just relying on organic. And the users are getting better quality stuff. People are fed up with the click-bait.”
Dominion holds Facebook in its Global Trends Ecommerce Fund.
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