Why Facebook’s News Feed Algorithm Change Will Hurt Its Revenue and Usage Rate
Facebook today announced it’ll start showing more status updates from users in the News Feed and less more Pages.
According to Chris Turitzin, a Facebook product manager, Facebook’s new chahnge" will help us [Facebook] show people more content they want to see. [However,] Page admins can expect a decrease in the distribution of their text status updates, but they may see some increases in engagement and distribution for other story types."
A major reason for this change is because Facebook saw that users respond greater to text updates from other users than from official Pages.
While Facebook’s new update can help boost its users’ engagements and usage rates, it may turn brands off and induce them to use other platforms. By lessening the amount of Page status updates appearing on users’ News Feeds, Facebook is creating obstacles for businesses to promote their products and services, new releases, and other company news effectively to their audiences. This will likely influence companies to use other platforms such as Twitter and Google+ to promote their brand. After all, if a brand spends a certain amount of time to create social media content, it most definitely wants to reach as many as people as possible through its social platforms.
With this potential decline in Facebook usage from brands, Facebook may also lose its advertising revenue to other platforms such as Twitter. As more brands will likely use social networks such as Twitter, Pinterest, or even Google+ for communication channels, they may reduce their advertising money on Facebook. After all, if brands are using other social channels to disseminate their brand, it’s highly unlikely that they’ll spend their marketing budget on Facebook.
This will undoubtedly hurt Facebook’s advertising business – the complete opposite outcome that they’re aiming for right now.