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The Economics Behind Facebook’s Decreasing Organic Reach

Posted by Vaibhav Kalamdani on April 28, 2015

Organic reach on Facebook is considered to be one of the most precious metrics by brands. This is because organic reach means the number of Facebook users who see a post from a Facebook Page, without the brand having to pay money to Facebook.

As Facebook has grown in popularity over the years, brands and agencies have complained about decreased organic reach. Where the brand posts were reaching 16 percent of their fans organically on an average in 2012, the number has dropped down to mere 1 – 2 percent currently, as per reports. This has led the Facebook advertising budget burn a bigger hole in several brands’ marketing spends in order to communicate their messages to a wider audience on Facebook.

Many term this as a tactic by Facebook to enhance its bottom-line and keep its shareholders happy. However, Facebook denied this theory and said that the declining organic reach is partially a natural and unavoidable phenomenon. The increasing number of posts made everyday by users and brands has led to decreasing attention span on individual posts by users on their news feed.

Demand and Supply

As per Facebook’s latest changes in its algorithm, the news feed (consumption demand) shows content mainly from those brands and friends which the user tends to interact more with. Therefore, every brand is fighting hard to grab a spot in their fans’ news feed – which provides a fixed amount of space to display content – indicating high supply and less consumption demand.

Using this economic theory, organic reach for brand posts on Facebook is inversely proportional to the number of posts made by brands and users on Facebook.

As you can see, the red line is the consumption demand curve and the blue line is the supply curve. With increasing posts made on Facebook, the organic reach for brand posts decreases, and hence the two are inversely proportional to each other.

 

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3 Serious Marketing Lessons to Learn From UNICEF’s Hilarious Video Campaign

Posted by Vaibhav Kalamdani on December 19, 2013

Have you seen the latest campaign video by UNICEF Sweden? If not, watch it first and then read on.

The video features character representation of three of the most respected personalities – Jesus Christ, Mother Teresa and Mahatma Gandhi having dinner and complementing each other for their noble work. The twist in the video happens when an ordinary man shares his way of doing a good deed.

So here’s MARKETING LESSON # 1: SIMPLICITY IS THE BEST FORM OF CREATIVITY

That’s right! In an effort to think BIG and INNOVATIVE, most often we forget the most important word – SIMPLICITY. This video is not only creative, but simple as well. Simple here means no using high-end technology or jargons. If you watch it carefully, the ad wins on 2 elements:

1) Connecting the action of donating with good deed, which is done by good people
2) That one sentence towards the end – “I just clicked a banner”

Consumers are smart enough to understand the ad because they see banners every day and almost everywhere on the Internet, and can relate to their experience.

After releasing the above video, UNICEF further launched two follow-up videos as part of the same campaign.

MARKETING LESSON # 2: BUILD A STORY AROUND WHAT YOU ARE SELLING AND ADD SOME FUN TO IT

None of the three historical figures are connected to UNICEF. However, the connect between all of them lies in doing something good for the society, and the synergy is weaved aesthetically to create a short story and intrigue the viewer.

Thanks to the story of the ordinary person in the second video, viewers had a reason to smile. His story started off describing about his life, and then leading to the core message. Similarly, brands need to talk to people not in a hard-selling or disoriented way, but by way of telling an interesting story that leads to the core message.

MARKETING LESSON # 3: EDUCATE CONSUMERS ON WHAT’S RIGHT FOR THEM

The third and final video in the series tells people what they need to do when they come across this campaign-related banner. If a person, who has seen these videos, comes across the banner, he’ll not only recall the ad but also might click with a high possibility. Nonetheless, even if he doesn’t click on the banner, UNICEF has effectively communicated that it is here to do good and help you do good as well!

This is probably the most challenging part for any brand – educating people and telling them what’s right for them to do. One of the best ways, as depicted in this ad, is demonstrate. Demonstration helps a person better understand what is expected from him.

What do you think about this campaign by UNICEF? Are there any more marketing lessons that you would like to share?

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Do Users Care About Ads on Social Networking Sites?

Posted by Vaibhav Kalamdani on May 20, 2009

They say that ads must be targeted only at places where your potential costumers are available. While this statement largely holds true, there may be cases that even your potential customers would not be too keen about buying your product at one of the most crowded places in the world – the social networking sites.

Generally, users do not portray their actual behavior on social networking sites. They are often manipulative and pretentious to grab the attention of their friends or connections. Hence, you might also likely find that their behavior would be different on different social networks. Also, thinking that users would enjoy seeing your ad displayed on the site and would eventually purchase your product is more of an optimistic approach towards marketing, rather than a practical one.

Before advertising your product on a social networking site, you must ask yourself the following questions: Read the rest of this entry »

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Twitter in No Hurry for Ads, Plans to Increase Staff

Posted by Vaibhav Kalamdani on May 18, 2009

twitterWhile most of the social networking firms are worried about gaining advertisements at the moment, there is one social network that is keeping its cool and focusing on building a strong foundation. Twitter, a barely 2 to 3 years old company, is still finding ways to earn money, but not considering too much about advertising at this point of time, according to a news story at Reuters.

Twitter is developing various add-on tools and services to cater to its professional set of users including businesses, in order to create a revenue stream for the company, said co-founder Biz Stone. However, he rebuffed the idea of selling ads on the site currently, in spite of the fact that ad revenue is crucial to manage a Web business while keeping services free for the users.

Besides stating that advertising is just not quite as interesting to the company, Stone mentioned few other reasons for not pursuing advertising. Read the rest of this entry »

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Where Advertisers Go Wrong in Social Network Marketing

Posted by Vaibhav Kalamdani on February 8, 2009

Though social network marketing has become a buzzword among marketers today, there are several who complain that the conversion rate is barely anything, just about 2% or so. Displaying ads on a social network doesn’t mean that viewers are going to click and make a purchase always.

It cannot be said what conversion rate is the best when marketing is carried out through social networks. However, companies aim to achieve high brand awareness and a favourable return on investment (ROI), which differs from one company to another based on their objectives. Read the rest of this entry »

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Social Media – A Big Hit with the Entertainment Industry in 2008

Posted by Vaibhav Kalamdani on January 6, 2009

Year 2008 brought gloomy days for businesses across the world with the great recession snatching away several jobs from people and shutting down operations of huge number of companies. One of the worst hit sectors was the financial sector, where even the topmost giants failed to stand tall on their feet. Companies saw tremendous cuts in traditional advertising expenses and diverting huge chunk into social media – the new form of marketing that has seen a paradigm shift in the way brands are promoted today. Certainly, one of the biggest buyers of the social media space has been the entertainment industry, which continued to swim against the mighty tides through creative and interactive approaches. Read the rest of this entry »

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