Gaining an Edge: The Brand Impact of Facebooks EdgeRank Algorithm Change

Authors: Chris Copeland, CEO, GroupM Next Nate Lee, Ph.D., Analytics Manager, GroupM Next Brandon Fischer, Partner, Director, Predictive Insights, GroupM Next November 2012

A lot has been made of the economics of Facebook in the wake of this summers 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 businesss 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 Algorithm

Consistent with Facebook-accepted norms, prior to the EdgeRank algorithm change, the brands studied had an average reach of roughly 16%. (For this analysis, reach is defined as the percentage of fans who see a brands post.) Following the change, the percentage drops by 38%. The upside for brands is

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

that with a decrease in exposure comes increased engagement by users their posts reach, with brands experiencing a 96% lift in

(Before & After EdgeRank Algorithm Change)

18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

15.56% 9.62%

38% Drop

engagement with individual posts following the change.

Before

After

Percent of Users That See Organic Post

2012 GroupM Next

Average Post Engagement Through Stories

(Before & After Facebook EdgeRank Algorithm Change)
essions ment

Gaining an Edge: The Brand Impact of Facebooks EdgeRank Algorithm Change November 2012

1
2.0%

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15.56% 16% (Before & After Facebook EdgeRank Algorithm Change)

Percentage of Post Impressions That Result in Engagement 14% 12% 10% 8% 6% 1.49% 4% 2% 0%

Organic Reach of Facebook Posts

Percent Of Facebook Users That See An Organic Post By A Brand They Like (Before & After EdgeRank Algorithm Change) On the surface there appears 18% Average Post Engagement Through Stories little amiss with the promise by

9.62%

Facebook and the subsequent

2.0% 1.5% 1.0% 0.5% 0.0%

38% Drop examine the implications of scale

delivery that is until you that come with operating on a site

0.76%

96% Afterhaving more than a billion users Before Lift Percent of Users That See Organic Post and brands with millions of fans.
dramatic lift in engagement simply

Before

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After

When put into this context, the

Average Post Engagement

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cannot Stories Average Post Engagement Throughoffset the decline a brand (Before & After Facebook EdgeRank Algorithm Change) exposure. experiences in post
Percentage of Post Impressions That Result in Engagement

Percent Change In Reach Of Organic Post For brands, this new reality presents a challenge. Obviously there are paid solutions now available on By Post Type On 2.0% Facebook
(After EdgeRank suggested is the 1.5% Facebook, which many experts haveAlgorithm Change) motivation behind this shift more so than improved
10% 0.5% now have developing insights which can help to further shape their organic strategy without becoming 0% -10% 0.0% solely paid dependent. -20% Before After -30% -40% Average Post Engagement -50% The biggest loss-60% brands following the EdgeRank change, however, is around reach. In studying for -70% 2012 GroupM Next brands post types of photos, status updates, links, videos, and shares, it was determined that not all -80% Status Photo types have a negative Update Visibility Change -40.46% return%compared to reach 19.48% -68.19% -31.92% -59.06% Percent Change In Reach Percent Change in Reach 1.0% consumer experience. The data studied by GroupM Next suggests that, as a result of the change, brands 0.76% 20% 30%

1.49%

96% Lift

before the change. While

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Of Organic Post By Post Type On Facebook

(After EdgeRank Algorithm Change)

Percent Change in Reach

most types see declines,

Percentage Change in Engagement (Stories)

30% 20% reach of status updates 10% 0% Percent Change In Engagement Through Stories increases, signifying one -10% By Post Type On Facebook -20% option brands now have to -30% (After Facebook EdgeRank Algorithm Change) -40% 150% increase reach to users. -50% -60% 100% -70% -80% 50% Photo 0% % Visibility Change -40.46% -50% -100% -150% Photo % Engagement Change 73.52%
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Status Update 19.48% -68.19% -31.92% -59.06%

Status Update 56.76% Percent Change In Engagement 101.20% 57.10% -124.98%

Through Stories By Post Type On Facebook

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(After Facebook EdgeRank Algorithm Change)

ercentage Change ngagement (Stories) 150% 100%

Gaining an Edge: The Brand Impact Percent Change In Engagement Through Consumption of Facebooks EdgeRank Algorithm Change By Post Type On Facebook50% November 2012
(After Facebook EdgeRank Algorithm Change)
0% 200% -50% tion)

(After EdgeRank Algorithm Change)

20% For brands to further maximize the potential of organic reach now requires better engagement by 10% Percent Change In Reach Of Organic Post 0% users through stories and broader consumption metrics. Stories are active forms of participation By Post Type On Facebook -10% -20% that take place whenever a user likes, comments or shares a brands content. Consumption includes Percent Change in Reach Percent Change in Reach 30%

By Post2012 GroupM Next Type On Facebook

(After EdgeRank Algorithm Change)

-30% 30% -40% 20% more passive user activities and occurs whenever a user views a video or photo, or clicks on a -50% 10% -60% 0% page post. -70% -10% -80% -20% Status Photo When examining what connectsUpdateusers at -30% with a story level, brands can take heart in having multiple -40% -50% -31.92% 19.48% -68.19% % for engagement success in the new Facebook -59.06% options Visibility Change -40.46% environment. Most types of posts (i.e. -60% -80% -70% photos, status updates, links and videos) produce more stories per impression after the change Status to the Facebook algorithm. Shares, on the other hand, decline in engagement per impression. Photo Update % Visibility Change -40.46% 19.48%
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The -31.92% latter -68.19% for

result means -59.06% levels of

Percent Change In Engagement Through Stories By Post2012 GroupM Next Type On Facebook
(After Facebook EdgeRank Algorithm Change)
Percentage Change in Engagement (Stories) 150% 100% 50% 0% -50% -100% -150% Photo % Engagement Change 73.52% Status Update 56.76% Percentage Change in Engagement (Stories)

that if brands are looking higher engagement, they must

Percent Change In Engagement Through Stories types of consider the By Post Type On Facebook posts they create because
(After Facebook EdgeRank Algorithm Change)
150% 100% 50% 0% -124.98%

some

posts

do

not

generate the engagement that others do.

-50% 101.20% 57.10% -100% -150% Photo

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Also noteworthy for brands is that, before the algorithm change, roughly 2.7% of a posts impressions 73.52% 56.76% 101.20% 57.10% -124.98% % Engagement Change Percent Change In Engagement Through Consumption resulted in some form of user consumption, while after this change, nearly 4.3% of impressions By Post Type On Facebook 2012 GroupM Next result in these forms of engagement. Algorithm Change) in activity corresponds to a 59% increase (After Facebook EdgeRank This difference
Percentage Change in Engagement (Consumption)

Status Update

in the probability 200% a post

100% is engaged with by some

act of consumption. The type of posts users will consume in the new environment is illustrated in the accompanying chart (right). Engagement Change %
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0%

Percent Change In Engagement Through Consumption By Post Type On Facebook

(After Facebook EdgeRank Algorithm Change)
Percentage Change in Engagement (Consumption) 200% 100% 0% -100% -291.81%

-100%

-200% -300% -400%

Photo

Status Update -13.90%

34.93%

-200% 129.77% 44.03% -300% -400% Photo 34.93%

Status Update -13.90% 129.77% 44.03% -291.81%

Effect Engaging Material Has On Improving Organic Reach

(Before & After Facebook EdgeRank Algorithm Change)
80% ging Post Reach 70% 60% 50%

% Engagement Change

2012 GroupM Next

71.43%

Gaining an Edge: The Brand Impact of Facebooks EdgeRank Algorithm Change Effect Engaging Material Has On November 2012

Improving Organic Reach

(Before & After Facebook EdgeRank Algorithm Change)

(After Facebook EdgeRank Algorithm Change)

Percentage Change in Engagement (Stories) 150% 100% 50% 0%

The Truth About Engagement Post Algorithm Change

While 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
-50%

advertisers should not expect an increase in the aggregate volume of engagement of their posts on -100% Facebook. This result means that brands are not gaining additional organic engagement as a result -150% of the change and are only losing organic reach.
% Engagement Change Photo 73.52% Status Update 56.76% 101.20% 57.10%

-1

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
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targeted by the network toward users with a high brand affinity. This is due to the fact that the Percent Change In Engagement Through Consumption EdgeRank algorithm (in part) makes posts more visible if the user is more engaged with a brands By Post Type On Facebook Facebook page. In the new Facebook environment, when an advertiserFacebook a post on their Change) (After makes EdgeRank Algorithm
Percentage Change in Engagement (Consumption)

Facebook brand page, only serious fans will see it organically.

200% 100%

Having the benefit of these insights, one myth worth busting is that0% engaging content. of A common refrain has been that the secret to real organic success would-100% be found through engaging content. However, the data examined for this analysis shows that since-200%changes to EdgeRank, the
-300% 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 -400% the small audience of that Status
Photo

fans reached is more likely to be predisposed to engagement, regardless of quality, and therefore
% Engagement Change 34.93% -13.90%

Update

129.77%

44.03%

-2

individual post quality no longer requires as high a standard.

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Where Brands Go From Here In The New Facebook Environment

A lot remains unknown with Facebook and the EdgeRank algorithm. Brands must determine the
Effect of Engaging Post on Organic Reach

Effect Engaging Material Has On Improving Organic Reach

(Before & After Facebook EdgeRank Algorithm Change)
80% 70% 60% 50% 40% 30% 20% 10% 0%

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.

71.43%

21.43%

Before

After

Effect of Engagement on Reach

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Projected Impact On Reach Of Optimized Posting Strategy For Brands On Facebook

of Fans Exposed to Post 18% 16% 14% Gaining an Edge: The Brand Impact 12%Facebooks EdgeRank Algorithm Change of 10% November 2012 8% 4 6% Increase 4%

28%

Effect of Enga on Organic

40% 30% 20%

21.43%

When studying the average set of posts by the brands before and after the Facebook algorithm 10%
0% 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
Effect of Engagement on Reach

Before

After

by 28% through strategic application.

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The changes made by Facebook

Projected Impact On Reach Of Optimized Posting Strategy For Brands On Facebook

Percent of Fans Exposed to Post 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

have been true to their stated intent, but for advertisers thats not entirely a good thing. What brands can do now in the new Facebook

Increase
Before After Optimized

28%

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

Percent of Users That See Organic Post Projected Percent of Users that See A Brands Post After Optimization
2012 GroupM Next

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.

Gaining an Edge: The Brand Impact of Facebooks EdgeRank Algorithm Change November 2012

GroupM Next is the forward-looking, innovation unit of GroupM, the worlds 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: cindy.spellman@groupm.com

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