Facebook Is Trying to Perfect Newsfeed

Facebook has started trying to perfect what its users get out of Newsfeed by asking them directly what they like and want. Currently, Newsfeed is curated by an algorithm that processes what you like and comment on, but it turns out that our activity on Facebook is highly affected by the variety of content we're shown. As you might have guessed, we are disproportionately likely to react to and affirm emotionally compelling content. That ASPCA puppy video... we're all over it. Mainstream news content? Not so much...

As a result, Facebook has started trying to ask users directly what they like and want to see in order to better determine what users desire in their newsfeed.

"The project works like this: each of these 600 Facebook users is presented with 30 top News Feed stories in a random order. Then they go through each story one by one. They can comment, share, follow a link, or choose to ignore the story. After that they answer eight questions about each item, including how much they cared about the subject of the story, how welcome the story was in their News Feed, how entertaining it was, and how much the story connected them to friends and family. Finally, they are asked to write a few sentences describing their overall feelings about the News Feed story."

It is in Facebook's best interest to learn how to better curate content for its users:

"Facebook made $2 billion in ad revenue last quarter, more than two-thirds of its total $3.59 billion in ad revenue for 2014. And where do those ads live? In News Feed. If the social network can crack the problem of what users really want from News Feed, they can presumably apply those learnings to ads, too."

So, if this experiment pans out, it may make Facebook's advertising worth significantly more.

http://www.wired.com/2015/01/facebook-making-news-feed-better-asking-real-people-direct-questions/

Timely Mobile Sharing

At present, with the rise of social media, it’s not uncommon for people (especially those attached to their phones) to learn about major local and global events via social media feeds.

People everywhere are able to capture events in real time, also contributing to timely sharing of news on personal feeds. Mobile devices are responsible for approximately 72% of total content sharing when a major event occurs. There has been a noticeable shift in where people get their news. Less and less, people are getting their information from televisions and newspapers. According to data from ShareThis, a free social sharing widget, “social media users are much more likely to share content via mobile devices after a major current event occurs.” This data comes following a thorough analysis of content sharing around events such as the ALS Ice Bucket Challenge.

On days where there is not a major breaking news event—“regular news” days—desktop computers account for about the same amount of content sharing as smartphones (43%); however, this all drastically shifts in the event of a major news story. When a given topic begins to trend on social media, mobile content sharing jumps to 72%.

Source: http://www.emarketer.com/Article/Mobile-Devices-Spur-Sharing-of-Timely-Content/1011571/1

Facebook Puts Additional Limits on Branded NewsFeed Posts

AdAge recently reported that Facebook has announced additional user controls on Brand's posting activities. According to Facebook, users will now have a greater ability to adjust their newsfeed content based on the quantity of posts they receive from certain brands. These measures are in line with Facebook's continuous intervention between brands and their followers.

When justifying their actions, Facebook explained that users should have the ability to control how much of a brand's messaging they see and avoid being inundated with content without having to stop following a brand entirely. From the earliest days of brand pages, Facebook has had to walk a fine line between being friendly to advertisers that keep them in business without alienating the same users that brands pay millions of dollars to Facebook to connect to.

These adjustments have some serious implications for brands. Merely having a large number of likes will by no means ensure consumer engagement. While content quality has always been a factor, brands will be forced now more than ever to create compelling content that is relevant to consumers to avoid the dreaded mute button. In many ways, Facebook is both the TV network and cable company, at the same time serving advertising while also giving viewers a DVR to fast forward through the ads that aren't compelling.

These actions inevitably also mean more money for Facebook. Not only can Facebook expect an increase in paid media as brands pony up to achieve the desired impression count, they can also expect advertisers to collaborate more with Facebook's in-house creative agency to create content that is native to the platform and will be consumed willingly by Facebook users. Given how much data Facebook has on its users' behavior, they have a huge advantage in anticipating which content will be engaged with and what won't. There is no reason for them to give that information out for free.

Huge Facebook (Advertising) Improvement

Notoriously, Facebook has had terrible advertising conversion results compared to search or even other normal websites.  In search, a customer is actively looking to go somewhere else, so an advertisement is perfect.  On normal websites, the customer may just be reading or browsing, so can be easily swayed to change course and click on an advertisement.  However, on Facebook, the user is at his final destination and is engaging with friends, and thus has historically been very unlikely to click an advertisement and leave his facebook page behind.

However, a new study is claiming that is about to change.  Facebook is now bombarding users with targeted advertisements in their newsfeeds.  Often, the ads say "XXX supports" or "likes" a product.  According to THIS ARTICLE, (thanks professor), news feed ads have 49x the click through rate of of Facebook's right side ads and "have a massive 21 times higher click-through rates than standard web retargeting ads"

If true, it will revolutionize Facebook and make it as desirable a place to advertise as the search engines. Currently, advertising on Facebook, because if its poor click through rate, has been much cheaper than other media. If that changes, FB may become the giant everyone thought it would be 2 years ago.

Personally, I'm not sure I believe these statistics. Facebook is now inundating users with ads, especially on mobile (If you haven't noticed, there is a newsfeed ad as the second thing in a newsfeed every time you open facebook or the facebook ap).  Considering on mobile, the screen takes 3-5 seconds to refresh and moves around as its refreshing, I'd be many clicks are accidental hits (I know I've done it a few times).

Anyway, it will be interesting to see how monitizable this all is (and how the stock reacts to this news).