What Facebook’s Zero Reach Means for Franchise Brands

I hate to be the bearer of bad news, however, this news should come as no surprise, as I have been warning of Facebook’s business doomsday since we first launched our Social Media agency in 2008. The news: it’s about to get far worse for businesses while the change is just another step in the business plan for Facebook. Soon, experts suggest, Fan Pages will have zero organic reach – meaning, there is no more free lunch and it’s time to pony up some ad dollars to play the Social game. The decline has been rapid. A few months ago, organic reach hovered around 14 percent (which was already half of what it was a few months prior). The need for speed is now, as figuring out this obstacle course early will pave a positive path for your brand. It’s time to make a plan, do the research and make sure you are putting the right budget behind the right plan for you. Facebook has played its cards in a very strategic fashion. First, it waited for thousands of brands to enter its hemisphere. In mid-2009, brand executives panicked, not knowing if their brand should even be on Facebook. Yes, just 5 years ago, brands didn’t know what was up, down, left, or right in the Facebook world. Yet, brands flooded to Facebook, first owning a profile, then a Fan Page and then fighting for the right URL (facebook.com/yourbrandname). With a Fan Page locked and loaded, brands hustled to hire Social Media agencies. For No Limit Agency*, we were among the very first Social Media agencies, all the way back in 2008. At that point, we could talk with any franchise brand of any size. I once had an hour-long conversation with Fred DeLuca, founder of Subway, in which he determined at the end of our conversation that we would work together. Boy, wouldn’t that have been fun. It never happened. As one of the few Social Media agencies, we had a shot. We had created a business model built around a new concept. We had the best practices and the best concepts. But then, with the economy beating the agency world, every marketing firm and ad agency struggling to make commissions from decreasing ad budgets and experiencing a decline in the creative needs of clients, all those firm, at once, decided to become digital/Social Media agencies. For No Limit, this meant no more Subway, as our three-person shop was no longer the attractive game changer – just a small fish in a giant sea of Social Media experts. In 2010 and 2011, brands started experiencing significant ROI opportunities from Facebook (remember the McDonald’s Study), yet the Social Media dragon refused to require spends. Brands could still talk with whomever they wanted, whenever they wanted, as much as they wanted. There were no rules and no algorithms. Facebook was baiting its hook. In 2011, brands also encouraged their agencies to find them more fans. “We need more fans – more fans, more fans.” I get it. I would love to have thousands of people like 1851’s Facebook Page so that we could constantly distribute news to a wonderfully focused audience, however, fans are only worth something to you if they are willing to interact with you (only a few hundred fans actually read our posts and travel to our Website to engage – even less now that this 0 reach is in process) and eventually spend their hard earned money on your brand. What’s 200,000 fans if the ROI is zero? In 2011, fake fans rushed to the like. Third World countries liked fan pages in masses – making the “popular” kid look even more popular (yet the dorky kid knew those giant numbers were fake people). Was there value in these global fake fans or the fake profiles created to jack up votes in contests? Of course not. Yet, it was still important to brands to have the most popular footprint. With nearly every brand in the world occupying a Fan Page, Facebook knew it had a chance to make significant funds. This was their chance. But wait, why strike when the iron was hot, when they could clearly trick many franchisors into hyper local or SoLoMo or Parent/Child? In fact, they didn’t need to do the tricking, as best practices were clearly defined by the industry. During a speaking session, I was blasted. “How could you tell franchisees they don’t have the right to operate their own Fan Page?” people yelled at me. That’s not what I was saying. I was simply warning franchisors of a day when Facebook would decide that Facebook owned Facebook – not brands. I was warning them of a time when franchisees would have to spend too much money on their pages to make the pages work for them. I was suggesting that franchisees own the art of local store marketing and not waste their time on a Fan Page. I was simply providing the future solution. Toward the end of 2012, with franchisors building out Parent/Child – meaning hundreds of thousands of local units have unique localized footprint pages – Facebook began to showcase its new fancy advertising tools – promoted posts, Facebook offers, and fancy PPC campaigns in which you could pick the sex, age and likes of those you wanted to target. Genius – yet Facebook wasn’t eliminating the value of viral speak. It was simply providing businesses with advanced targeting options (still, the smartest form of advertising – in my opinion – that exists). As 2012 came to a close, the algorithm was introduced. It was based on the actions of your Fans. If Johnny liked your page, but never liked or commented on any of your posts, then Johnny wouldn’t see your ‘buy this’ and ‘eat this’ posts in his Newsfeed. Smart, right? Facebook was suggesting that it wasn’t all about fan count and more so about meaningful fans. Yet brands refused to buy into this. The Facebook crack was more fans. In 2012, Mark Cuban showed us the future, and we should have listened to the tech billionaire. Seeing the future, he said, “The big negative for Facebook is that we will no longer push for likes or subscribers because we can't reach them all. Why would we invest in extending our Facebook audience size if we have to pay to reach them? That's crazy.” And then came 2013 – the year of the Facebook ad. Oh; and the Twitter ad; and the LinkedIn ad. For the past year, our clients have had to find new and creative ways to drive interactions, especially if they didn’t want to spend the funds (this is a fun challenge to me because figuring out organic growth should drive a stronger ROI). Contests, sharable images and promoted posts still carried great value. And smarter brands started collecting email addresses from their fan base early on – knowing that a day may come when all those people they worked so hard and spent so hard to reach –were just a number. As 2014 progresses, when you speak – no one will listen. Not because they don’t want to – but because they can’t hear you. Their Newsfeed will feature their friends – not your brand. Unless, of course, you are willing to spend the dollars. This is scary. Facebook told you to join Facebook. Then, it stressed the value of you having a business footprint. Then it gave you shiny toys to play with on your Fan Page (tabs). Then it suggested that you have a separate page for each one of your locations – because why would fans want to hear about your global brand when they desired something so much more localized? All while creating this path, brands decided that the fan was worth everything – it was more about a number than actions and ROI. Then it created an algorithm, teaching brands the importance of spending a little money to increase visibility. And then, it took it all away. Get ready, your reach will be zero. What does this mean?

• Our research indicates that if you have 60,000 fans and intend to reach them on a daily basis (just your 60,000), you will have to budget $125,000/year toward advertising. Clearly, this would be highly challenging for brands. Even a franchise brand with 100 locations would struggle to put these types of funds against an advertising campaign.
• You know those local pages you love? Well, for a 100-unit chain, spending only $5/page/day, each location would need to budget $1,825/year or $185,250/brand. Add that to your master page budget, and you have a lot of fundraising to do.
• It’s not here yet. The reach is quickly declining (some say 6 percent, some say 8, some say 2). Start your creativity now – collect as many email addresses as possible. Use sweepstakes and creative ad campaigns to collect as much data on your fans as possible – so that all your hard work can still pay off.
• For now, gaining a base of fans is still possible with organic reach, but the business model needs to be tweaked for engagement. Paid reach will jump-start the life of a post/page.
• It’s time for marketers to think differently about how to use the platform. This may include integrating Fan Pages into high traffic areas – like websites.
• Facebook is still too valuable to leave it completely. Smart brands will budget for advertising – just as they did for direct mail or print ads in the past. Twitter, Instagram and other mediums will be embraced on a larger scale.
• Content is going to be more important than ever. Content will need to be timely and relevant - the kind of things people will want to share regardless of the brand. People remember the brands that are creative and innovative in their content, not just shoving the brand down consumer’s throats.
• Small contests and swag giveaways will be a way to boost posts through shares and interaction, but companies will want to be sure that it's worth the cost. It may be more cost effective to budget for promoted posts.
• The insights will also be more important than ever. We can look at the type of posts fans are engaging with and what we were posting when there's a spike in new fans and then use that information to craft posts that produce the most engagement.

Obviously, other sources are necessary for you to complete your own research. Check out these articles as you frame your game plan for the future of your brand’s Social footprint:

• Mashable
• One Man and His Blog
• AdAge
• AdWeek

The beauty of Social Media is that every day is different. Facebook could create a very simple pay-to-play format. It could put back organic reach. Frankly, it can now do whatever it wants because it owns the power. It made us join (all ages). It made us invest in our business footprint. And now, it can do whatever it wants, whenever it wants. And frankly, other sites could soon follow. You want follower to see your tweets? Pay for it. Instagram? Yeah, that’s owned by Facebook. Surely every brand’s Social footprint is not the same. Some brands should absolutely run local pages. Some should absolutely not. If you start training your franchisees to budget for tech now – perhaps that mindset will pay off in other ways. The point is – none of us own Facebook. We own our brands. We own our websites. We own the marketing and operation of our brands. There are only so many things we can control – and unfortunately, Facebook is not one of them.  Jonny Egan and Michelle Lonnee contributed information to this column.