Hey Marketers, Quit Whining About Facebook
Jeff Dachis doesn't want to hear your whining about Facebook — especially if you're a corporate marketer who's been using the social network to spew messages to anyone and everyone who has ever simply "liked" your brand.
Dachis — co-founder of Razorfish, the iconic 1990s digital interactive marketing and design agency and now CEO of his own company, Dachis Group — says corporate marketers will have to pay to play on Facebook.
"People who thought of Facebook as a reach and frequency play are (ticked)," Dachis said Wednesday. "But Facebook is doing the right thing."
Dachis has waded into the scrum surrounding recent changes to Edgerank, the controversial algorithm Facebook uses to determine what appears in your news feed — where nearly all Facebook users turn first when they open Facebook. The algorithm determines which of your connections is most important to you — and as a result, their updates and photos appear most frequently.
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That includes not only your buddies posting updates, but also companies trying to get you to pay attention them.
Back in January, what's called the "engagement rate" — the percentage of fans and friends of fans of the top 200 brand pages on Facebook engaging with those pages — was measured by the Ehrenberg-Bass Institute, a marketing think tank based in Australia, at just 1 percent. The figure was roundly criticized as shockingly low. Then in September, Facebook changed the Edgerank algorithm; so Ehrenberg-Bass re-measured engagement — and found it is still just 1.4 percent.
"The very slight change in the numbers are due to Facebook changing the calculation to record all interactions from non-fans as well," said Karen Nelson-Field, postdoctoral research fellow at the institute, told Ad Age earlier this month. "For us, this number is underwhelming. There has been so much hype about the whole 'amplified reach' opportunity — that friends of fans, while not explicitly linked to the brand themselves, offer advertisers huge potential outside of the fan base. We don't see it here."
Others also weighed in, including George Takei, the former Star Trek actor who is about to publish a book that includes an entire chapter taking on Facebook over its algorithm. Takei has been outspoken about his frustration with the algorithm, which he says forces him to pay Facebook for "promoted posts" if he wants to reach his own fans.
To which Jeff Dachis would say: too bad.
His point is that companies have to pay if they want to reach not-that-interested Facebook users with marketing messages. If Facebook hadn't made the change, he said, users would be inundated with posts from hundreds of companies they don't care about.
Dachis has a stake in this Facebook debate. His company uses Facebook (and many other social networks) to collect data and analyze social interactions for about 30,000 brands.
What that means is they are scanning Facebook posts, Tweets, Pinterest pins and others for mentions of companies and brands; combining that information with mentions from databases such as Hoover's and PR Newswire; and then swirling around those mentions into their own souped-up algorithm — and coming up with what they say is a measurement of companies' performance in "social marketing."
The company, founded in 2008 in Austin, Texas, has just under 200 employees and revenues in the "multiple tens of millions of dollars," Dachis said. His clients buy their software based on the size of a company's audience and the processing power needed to crunch data.
Dachis says he can identify a brand's most passionate advocates "in the wild" — people who naturally like a brand without being bombarded with Facebook posts or advertising from that brand.
"Somebody may 'like' a brand because they're offered something for free, but that's not an advocate," he said. "There are thousands and thousands of passionate brand warrior advocates."
For instance, he asked, what if you went on a Disney cruise and had a great time? You might post photos on Facebook or Tweet about it with no prompting from Disney . That, said Dachis, makes you a Disney "advocate." He can scoop up those posts and feed the information to Disney, if Disney wanted to pay for the service.
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He said he can detect the health of brand, how well it's performing against its competitors and how well it's performing against some of the superstars of social marketing: Red Bull, Nike, and Starbucks .
He showed an example from Dachis Group research: His algorithm has identified Red Bull's number 1 "advocate" in the world, someone from Argentina who goes by the Twitter handle mcrisever. She mentions Red Bull favorably and often, for no apparent reason except that she really, really likes it.
"We believe there is a fundamental shift in the communications landscape in that we're moving from mass communication to a mass of communicators," he said. Instead of brands talking at people, they're talking with people, said Dachis. Brands will be built and maintained using the constant feedback loop that is social media.
"Kids don't believe that cookies are made by elves in a hollow tree in the forest anymore," he said.
All of which gets him back to the Facebook kerfuffle.
If brands want to pay to convince kids there are elf-bakers, that's fine — and Facebook should demand payment instead of letting the brands spew whatever they want for free, he said. But that method isn't going to work in the long run.
When he co-founded Razorfish in 1994, the infant web was a one-dimensional beast that in many ways behaved just like old media and old advertising: as a brochure from which one could broadcast messages.
Twenty years later, it's many-dimensional and networked. Everyone can broadcast their own messages. Everyone has a say about everything, including every brand out there. Once those brands understand that reality, social marketing will really take off — and Dachis, of course, hopes that will make him very successful.
"This is a more profound shift in the marketplace," Dachis said. "This is the next frontier."