FB Changes Algo, In­dia Ad Rates Dou­ble

The Economic Times - - Brands & Companies - Shamb­havi.Anand @times­goup.com

New Delhi: The cost of ad­ver­tis­ing on Face­book in In­dia has dou­bled since the so­cial me­dia plat­form changed its news feed al­go­rithm this year to prioritise posts from fam­ily and friends over pro­mo­tional con­tent, dig­i­tal me­dia agen­cies and ad­ver­tis­ers said.

Prior to the al­go­rithm change in Jan­uary, the av­er­age cost per thou­sand im­pres­sions, also called cost per mile (CPM) — which refers to the price of 1,000 ad­ver­tis­ing im­pres­sions on a web­page — on Face­book was around .₹ 150. Now, it is touch­ing .₹ 300, mak­ing ad­ver­tis­ing on the plat­form sig­nif­i­cantly ex­pen­sive for small busi­nesses that rely heav­ily on dig­i­tal plat­forms for pro­mot­ing their busi­nesses, me­dia agency in­sid­ers said.

This is mainly be­cause Face­book has re­duced the space avail­able for ads as a large chunk of peo­ple’s news feed is now fo­cused on posts from their fam­ily and friends, said Varun Dug­gi­rala, con­tent chief of The Glitch, an agency ac­quired by WPP re­cently.

Vi­nayak Katkar, founder of Pune-based dig­i­tal mar­ket­ing agency Amura Mar­ket­ing Tech­nolo­gies, ex­plained: “If Face­book was show­ing, say, 10 ad slots ini­tially till Jan­uary, now they are show­ing only five. The sup­ply (of ad­ver­tis­ing in­ven­tory) has re­duced and ad­ver­tis­ers are in­creas­ing. So the rate for the same slot has gone up.”

Faced with crit­i­cism from users, Face­book founder Mark Zucker­berg had in Jan­uary an­nounced the change in its news feed al­go­rithm to prioritise con­tent from “friends, fam­ily and groups” in­stead of brands and ad­ver­tis­ers. “As we roll this out, you'll see less pub­lic con­tent like posts from busi­nesses, brands, and me­dia,” he had said in a Face­book post.

“Now, I want to be clear: by mak­ing th­ese changes, I ex­pect the time peo­ple spend on Face­book and some mea­sures of en­gage­ment will go down,” Zucker­berg had said. “But I also ex­pect the time you do spend on Face­book will be more valu­able.”

Some small busi­nesses that rely on so­cial me­dia to reach out to their tar­get au­di­ences said the in­creased rates have made ad­ver­tis­ing on Face­book too ex­pen­sive for them. “Face­book has be­come very ex­pen­sive,” said Ayushi Gud­wani, founder of on­line ap­parel re­tailer FableStreet. “The abil­ity to reach more peo­ple has re­duced by al­most 40%. Ear­lier if I spent .₹ 100 and get a reach of 1,000 peo­ple, now the same .₹ 100 gets me just 300-400 peo­ple,” he said.

FableStreet has been spend­ing more than 70% of its mar­ket­ing bud­get on Face­book.

On­line fur­ni­ture rental startup Ci­tyFur­nish, which too has been heav­ily de­pen­dent on Face­book ad­ver­tis­ing, is now look­ing at other so­cial net­work­ing sites such as In­sta­gram. “The con­ver­sion (on Face­book) has dropped sig­nif­i­cantly and the cost has in­creased,” said Neeraj Jain, co­founder of the Gu­ru­gram-based firm.

Face­book, how­ever, said the change in CPMs in last one year for the in­dus­try is min­i­mal and mostly in line with the trend across dig­i­tal chan­nels. A com­pany spokesper­son also claimed the num­ber of peo­ple ad­ver­tis­ing on Face­book is grow­ing, in line with a growth in in­ter­net users and in­creased data con­sump­tion.

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