Downfall of Facebook Part II. The Ad-Heavy Landscape of Facebook

This is the second part in our series where we look at how Facebook marketing has changed, I recommend reading part 1 first.
In recent years, Facebook’s landscape has become increasingly dominated by advertisements and recommended content, significantly altering the user experience. What was once a platform for connecting with friends and family has transformed into a marketplace where users are bombarded with ads and suggestions that often overshadow the content they actually want to see. This shift has had profound implications for user engagement and satisfaction, as well as for businesses that rely on Facebook for marketing.

Increasing Ad Presence

One of the most noticeable changes on Facebook is the sheer volume of advertisements. According to a report by eMarketer, Facebook’s ad revenue in 2021 was projected to reach $94.69 billion, up from $84.17 billion in 2020. This significant revenue growth underscores the platform’s increasing reliance on advertising. However, this surge in ad content has come at a cost to the user experience.

User Experience: Disruption and Frustration

For many users, the rise in ads and suggested content disrupts their experience on the platform. Instead of seeing updates from friends, family, and pages they follow, users are increasingly bombarded with advertisements and irrelevant recommendations. A study by the Pew Research Center found that 74% of Facebook users were unaware of why certain ads were shown to them, leading to feelings of confusion and frustration.
This shift has led to a significant decline in user engagement. Users who feel overwhelmed by the volume of ads and irrelevant content are less likely to spend time on the platform—according to data from Statista, the average daily time spent on Facebook by users in the United States dropped from 41 minutes in 2017 to 33 minutes in 2021. This trend is a clear indicator that the increasing ad presence is detracting from the core user experience that initially attracted millions to the platform.

Engagement Decline: A Growing Concern

The decline in user engagement is a growing concern for both Facebook and businesses that use the platform for marketing. When users feel that Facebook is more about selling products than connecting with people, their overall engagement with the platform decreases. This decline is particularly troubling for businesses that rely on organic reach to connect with their audience.
According to research by Social Media Examiner, 51% of marketers reported a decline in organic reach on Facebook in 2020​ (Mars Digital)​. This decrease in organic reach means that even if users follow a business page, the likelihood of them seeing posts from that page has diminished significantly. The algorithm prioritises paid content over organic posts, forcing businesses to invest more in advertising to maintain visibility.

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The Impact on Small Businesses in New Zealand

For small businesses in New Zealand, the implications of Facebook’s ad-heavy landscape are particularly pronounced. New Zealand’s market is characterised by a high proportion of small to medium-sized enterprises (SMEs) that often operate with limited marketing budgets. The increased cost of advertising on Facebook and the reduced effectiveness of organic reach pose significant challenges for these businesses.
In a market where digital engagement is crucial, the diminishing returns from Facebook marketing efforts can lead to a reassessment of marketing strategies. For instance, a small retail business that previously relied on organic posts to drive traffic to its online store now finds that its posts reach fewer people unless it allocates a substantial budget to Facebook ads. This shift in dynamics forces businesses to weigh the cost of advertising against the potential returns, often leading to difficult decisions about where to allocate limited resources.

Case Study: The Decline in Organic Reach

To illustrate the impact of Facebook’s ad-heavy approach, consider the case of a New Zealand-based artisanal bakery. In 2018, the bakery enjoyed significant engagement from organic posts, with each post reaching an average of 2,000 users and generating numerous likes, comments, and shares. This engagement translated into increased foot traffic to their physical store and online orders.
However, by 2021, the bakery noticed a sharp decline in organic reach. Despite maintaining a consistent posting schedule and high-quality content, their posts were now reaching only a few hundred users. The drop in engagement was noticeable, with fewer likes and comments and a significant reduction in online orders originating from Facebook.
Faced with this challenge, the bakery decided to experiment with paid advertising. While they saw some improvement in reach and engagement, the cost of maintaining a consistent advertising campaign was unsustainable for their small budget. This experience mirrors that of many small businesses in New Zealand, highlighting the broader issue of Facebook’s current approach to content prioritisation.

Data and Statistics on Facebook Ad Engagement

Further emphasising the issue, data from Hootsuite’s Digital 2021 report shows that the average Facebook post engagement rate across all industries is just 0.18%. This low engagement rate reflects the broader trend of users becoming less responsive to the increasing volume of ads and suggested content in their feeds.
Moreover, a survey conducted by HubSpot revealed that 45% of consumers said they would unfollow a brand on social media because of too many ads or irrelevant posts. This statistic underscores the delicate balance that businesses must strike when using Facebook for marketing. While ads are necessary to maintain visibility, over-reliance on them can alienate potential customers.

Recommendations for Meta

To address these issues, Meta, Facebook’s parent company, needs to consider several improvements to enhance the user experience and support businesses:
  1. Balance Ads with Organic Content:
    • Adjust the algorithm to prioritise content from friends, family, and following pages, ensuring that ads do not dominate the user feed.
    • Implement stricter limits on the number of ads shown per user session to reduce ad fatigue.
  2. Enhance User Control:
    • Provide users with more control over their feed content, allowing them to adjust the frequency of ads and the types of recommended content they see.
    • Introduce more transparent ad targeting options so users understand why they see certain ads and can provide feedback to improve relevance.
  3. Support Small Businesses:
    • Offer discounted advertising rates or grants for small businesses, particularly in markets like New Zealand, where marketing budgets are limited.
    • Improve the visibility of organic posts from business pages, ensuring that businesses do not have to rely solely on paid ads to reach their audience.

 

Conclusion

The ad-heavy landscape of Facebook is a double-edged sword. While it drives substantial revenue for the platform, it also disrupts the user experience and diminishes the effectiveness of organic reach for businesses. For small businesses in New Zealand, this shift poses significant challenges, necessitating increased investment in advertising to maintain visibility. To remain a valuable marketing tool, Facebook must rebalance its approach, prioritising user experience and supporting businesses with sustainable marketing solutions. By addressing these issues, Meta can ensure that Facebook continues to be a platform where users and businesses can connect meaningfully and effectively.

References

  1. eMarketer. (2021). Facebook Ad Revenue.
  2. Pew Research Center. (2019). Facebook Algorithms and Personal Data.
  3. Statista. (2021). Daily Time Spent on Facebook.
  4. Social Media Examiner. (2020). Social Media Marketing Industry Report.
  5. Hootsuite. (2021). Digital 2021 Report.
  6. HubSpot. (2020). Consumer Social Media Survey.

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