E-tailers don't 'like' Facebook axe on unpaid ad campaigns

Facebook's new policy, to come into effect from January, is set to hurt e-commerce companies and start-up businesses in India. The Mark Zuckerberg-led social media platform has decided to reduce overly promotional posts in newsfeeds and filter out unpaid marketing campaigns, widely used by Indian e-commerce companies and start-ups.

The policy, to be implemented across the world, would focus on what users want in their newsfeeds, rather than the promotional pages they like.

Indian e-commerce companies in particular have been using their Facebook pages extensively to reach out to as many consumers as possible, apart from paid advertisements. E-tailers maintain that a large chunk of their buyers are routed through Facebook promotions, both unpaid and paid. Estimates suggest about half the traffic to e-commerce sites come through Facebook.

"Beginning January next year, people will see less of such content in their newsfeeds. As we have said earlier, newsfeeds are already a competitive place - with more people and pages posting content, competition to appear in newsfeeds has increased. All of this means pages that post promotional creatives should expect their organic distribution to fall significantly over time," Facebook has said in a statement.

This is also being seen as a veiled move to increase revenue from advertisements on social media platforms.

Facebook said: "Newsfeeds have controls for the number of ads a person sees, and for the quality of those ads (based on engagement, hiding ads, etc), but those same controls have not been as closely monitored for promotional page posts. Now, we are bringing new volume and content controls for promotional posts, so people see more of what they want from pages." The company said its decision was based on a survey that showed there were certain consistent traits that made organic posts appear too promotional.

E-tailers with deep pockets might be able to absorb the new policy measure but emerging niche e-commerce companies and other new businesses could find it difficult to increase ad budgets on Facebook's user pages. According to an analyst, "the exact impact would depend on pricing".

There are two sides to it, many of the smaller companies will eventually get bigger with time.

"So, the latest move could result in reducing one's client base. On the other hand, such promotional platforms could not remain free for ever," said Arvind Singhal, founder & chairman of retail advisory firm Technopak.

Facebook, which has been growing its global user base at a staggering rate, recently crossed the 100-million mark in India.

Also, Facebook founder Zuckerberg's recent visit to the country is believed to have generated a greater optimism around his plans to expand deeper here.

With a focus on improving connectivity in rural India, Prime Minister Narendra Modi had also had a meeting with Zuckerberg during the latter's visit.

NO FREE LUNCHES

• Facebook has decided to filter out unpaid marketing campaigns and reduce overly promotional posts in newsfeeds
   
• The policy, to be implemented from Jan, will affect several Indian e-tailers and new businesses
   
• The social network giant says it will focus on what users want in their newsfeeds, rather than promotional pages they like
  

 

A majority of e-commerce companies have said about 50% of their traffic comes via Facebook
 

Companies with deep pockets might be able to absorb the move but emerging ones could be hit by the new policy