It's about to get a lot harder for credit unions to reach their members on Facebook.
That's because over the past few months, the popular social networking website has been reducing the organic reach of its pages, according to a recent report in Time magazine.
Now, even if a person "Likes" a company or organization on the social network, they're unlikely to naturally see that page's content in their News Feed.
In a recent study of more than 100 brand pages, Ogilvy & Mather found that companies' posts dropped from reaching 12% of their followers in October to just 6% by February. The tech blog Valleywag reports that Facebook is planning to dial reach down to 1% to 2% of followers eventually.
Facebook declined to comment on the percentage of fans that see posts from a typical page (the last publicly disclosed figure was 16% in the summer of 2012), but the Menlo Park, Calif., company said in December that posts from pages are reaching fewer users. Facebook attributed this change to increased competition as more people and businesses sign up.
Nichole Kelly, CEO of Social Media Explorer, explained that as Facebook has rolled out its advertising platform, analysts have expected the site to find more and more ways to make pages pay for advertising.
"What we've seen since they've done it is that it's driven the cost of advertising up," Kelly said, noting that one SME client saw its ad costs on the site rise from $20 per click to $60 per click. "The only thing I am surprised about is that they made such a dramatic decrease. To go from 16% to 1% is a little shocking."
Making matters worse is that the decline in pages' organic reach is hitting all users equally, placing credit unions in the same position as multinational corporations such as Nike or Pepsi.
But Meredith Olmstead, social media marketing consultant and founding partner of Social Stairway, said that while many organizations often have a knee-jerk reaction to having to spend money on what they used to get for free, they're often quick to spend significantly more money on things like direct-mail campaigns than they will have to spend to place ads on Facebook or promote their posts.
Olmstead said she recommends that all of her clients put "at least a bit of money" behind what they post, if only because it helps their fans see that they're posting regularly and keeps the institution top of mind. She also predicted that during the next five to seven years, credit unions will begin to shift their marketing dollars increasingly toward the digital space and away from more traditional advertising venues.
"You're going to reach your members and potential members online," said Olmstead. "Especially as the next generation becomes credit union members, this is where the future generations of members are. They're online. This is how you'll be reaching the Millennials and even some of the younger Gen X and Gen Y and all of these generations coming ahead."
Abandoning The Social Media Ship?
Kelly said she "absolutely" would expect to see some credit unions begin to abandon Facebook as a result of this, but she reminded that "it's not that they can't continue to publish, but the value of that content that they're sharing goes down, and it becomes much harder to reach that audience that they have."
The bigger consequence, according to Kelly, is the way this may alter the dynamic of how organizations use Facebook.
"This is going to transform the conversation away from fan pages as the primary source of brand awareness for credit unions and more into recognizing that they have employees who are already on Facebook that don't have reach problems, and their algorithm isn't changing," she said. "If there's a way they can engage and empower their employees to represent their brand on Facebook, they're going to be much better off" than continuing to put resources into brand pages that have diminishing returns.
She added that small CUs may even be in a better position than their larger counterparts when it comes to this, if only because they have likely put fewer resources into their brand pages. She pointed credit unions to an online calculator to help credit unions better understand the cost of paying to post on the site. It can be found at http://www.shiftcomm.com/facebook-page-cost-calculator/.
"I honestly think this is a deal-breaker for small business as a whole — not just credit unions," Kelly added.
Olmstead disagreed. "They'd be crazy" to abandon Facebook, she said. "People expect you to be there." The move toward pushing pages to pay for exposure "is just going to be a part of the cost of doing business. That would be my prediction. And I don't think it's an unreasonable cost."
After all, she continued, "I would never, ever have told a client even up to now that marketing on Facebook was 'free.' It's never been 'free.' You've always had to have staff in place and have a strategy. It takes major resources. The Facebook ad costs are a small fraction of what a credit union that's really active on social media is spending. They have staff in place, and staff are a huge expense. Benefits, salaries, these are significant amounts of money being spent to maintain their presence [on social media]."
What Can CUs Do?
Credit unions should consider getting more comfortable with the idea of paying to promote their posts on Facebook, say industry experts.
But, said Olmstead, "I would never recommend toa credit union that they just start pushing that 'Boost Post' button."
One strategy, she suggested, is for credit unions to have someone — either on staff or brought in as a consultant — who can help target their Facebook ad efforts so that their messaging is more likely to reach the right audience, which can be broken down by age, income, geographic location and more.
And though Kelly recommended CUs should continue to use Facebook, Twitter and the like, she said the future may lie with content aggregators like UberFlip, which brings together material from multiple sources across the web into one location.
"I think we'll start to see more companies starting to realize that owned channels are much more valuable than third-party channels when you have things like this happening in the marketplace," she said. She added that "at the end of the day, the whole intent [of social media] was, from a marketing perspective, to build relationships and drive traffic back to your site."