The Unstoppable Rise Of Paid Social

Remember when Facebook required a .edu email address to join? When you could still get a simple one-word username on Twitter? When LinkedIn only had a couple million members? Those were the days!

Now these companies are publicly traded and worth billions. Just look at their stock price & valuations:

  • LinkedIn (LNKD) – $234.20 stock price with a $26.3 billion market cap
  • Facebook (FB) – $48.19 stock price with a $117.5 billion market cap
  • Twitter (TWTR) – $48.73 stock price with a $26.5 billion market cap

Now that these companies have shareholders, they need to make decisions differently. Advertising gets more placement and more prominence at the expense of user content that was considered “free”. How do I know this? Because Facebook admitted as much.

Too Much Content, Not Enough Feed

Facebook recently published a paper called “Generating Business Results on Facebook”. One line that stood out to me goes like this:

…content that is eligible to be shown in News Feed is increasing at a faster rate than people’s ability to consume it.

Too much posting and not enough browsing. This means that Facebook has to decide what to show from a bucket that is overflowing. In their own words:

…we expect organic distribution of an individual Page’s posts to gradually decline over time as we continually work to make sure people have a meaningful experience on the site. Your post has a better chance of appearing organically to your fans and their friends if it’s relevant to them and if their friends interact with it (see “Creating a personalized newspaper” below). But to maximize delivery of your message in News Feed, your brand should consider using paid distribution, as it enables you to reach people beyond your fan base and move beyond the organic competition.

I went ahead and bolded the points that jumped out to me. First, your page posts are going to get less and less distribution going forward. When it happens, don’t say Facebook didn’t warn you. Second, Facebook says the solution is to pay for distribution. This is how social networks are going to increase revenue, profits, share price, etc. for their shareholders.

Pay To Play

While social networks rely on people to provide the “social”, businesses seeking to promote themselves in these networks will have to increasingly pay for distribution rather than create a company presence and post content to their fans & followers. The good news for companies is that you have lots of options.

LinkedIn – The self-serve platform allows you to advertise in the right sidebar through their ads and to put your content directly into users’ feeds with a sponsored update. Here’s what those look like:
LinkedIn Sponsored Update

LinkedIn PPC Ads

Facebook – Same as LinkedIn, you can show up on the right or in the feed directly:
Facebook Feed Ad

Facebook Mobile Ads

Facebook Right Side Ad

Twitter – This is more nuanced, but you have several options like promoted accounts to build your followers:
Twitter Sponsored Account Ad
Or you can promote tweets so more people see them:
Sponsored Tweet

NEW: Google+ – Evidently Toyota and other select partners have been testing out +Post Ads which allows them to take a piece of Google+ content and turn it into a display ad to run on the GDN. Here’s the video –