Social Insider is a daily newsletter from BI Intelligence delivered first thing every morning exclusively to BI Intelligence subscribers. Sign up for a free trial of BI Intelligence today.
THE FACEBOOK-PUBLISHER DYNAMIC: During the past few months, we've been reporting that Facebook has been adjusting the algorithm that ranks the relevancy of content in the news feed.
Facebook was explicit in stating that brands would need to pay to achieve the same audience reach they'd been enjoying before the change. We published a chart that showed an early effect this change had on brands' Facebook pages. Essentially, we observed that brand content was being seen by fewer people, but was generating higher engagement - so brands will react differently depending on their social marketing goals.
Now we're also seeing how Facebook's changes to the news feed algorithm also seems to have had a significant impact on referral traffic to publishers.
Viral content publishers that rely specifically on Facebook users to share their content appear to have been hit hard by Facebook's changes, according to Quantcast data compiled by Nicholas Carlson.
Upworthy's traffic dipped to 48 million readers in January - still a huge audience, but down 46% in two months. Similar sites that aggregate news and change the original headlines to make them more "buzzy" also took a hit from Facebook referral traffic.
Interestingly, BuzzFeed was the outlier amongst this crowd of new media publishers. Buzzfeed continued to see referrals increase from Facebook. Perhaps it's because BuzzFeed does produce some of its own original reporting and its CEO insists that they are building BuzzFeed to be the future of digitial media. However, Facebook executive Chris Cox, who oversees development of the news feed, reportedly said last fall that he had a "problem" with BuzzFeed content overrunning the news feed.
It seems BuzzFeed took that comment seriously, and might have even reduced the number of articles that it is now publishing. Interestingly, half as many BuzzFeed articles made it onto Facebook in December than the number that did in October.
Facebook is essentially a content distributor, akin to cable providers in the television industry. "In this case, the cable providers are the distribution and they want TV content companies to make great show[s] so more people will sign up for cable," said BuzzFeed CEO Jonah Peretti. Facebook wants its users to see a variety of quality content so that they spend more time using Facebook. Therefore, it seems that in order for publishers to play by Facebook's rules, they'll need to find a balance between quality and volume of content they produce. (BI Intelligence/Business Insider)
MORE SNAPCHAT SECURITY CONCERNS: A security researcher found that he could run a program that sends so many messages to a Snapchat user that it crashes the recipient's iPhone (it doesn't appear that he tested other mobile devices). The security hack is what's known as a denial of service (or, DoS). DoS attacks attempt to overload a server with thousands of requests in seconds, which can cause the entire service to crash. Twitter used to be a target of this type of hack in its early days. Snapchat needs to fix this vulnerability, and prevent future DoS attacks if it wants to mature into a reliable service for users. (The Guardian)
SOCIAL NETWORKING IN THE BATHROOM: A new Nielsen study focused on the way in which consumers are watching television content at their own convenience, now that the average American consumer owns four digital devices. But for you social media aficionados, one of Nielsen's findings was that 40% of adults between the ages of 18 and 24 use social media in the bathroom. (Nielsen via CBS)
GILT GROUPE COULD FILE FOR IPO: Gilt Groupe, an e-commerce company that sells luxury merchandise at discount is reportedly preparing to file for an initial public offering, which will be managed financially by Goldman Sachs. Goldman is also an investor in Gilt. The company is expected to file for a third quarter offering in 2014. (Bloomberg and Re/code)
FACEBOOK CEO DONATES FORTUNE: Facebook CEO Mark Zuckerberg and his wife Priscilla Chan made the largest single donation in 2013, valued at nearly $1 billion (in Facebook stock). The donation went to the Silicon Valley Community Foundation, which makes strategic grants in economic security, education, and immigrant integration, among other causes. Zuckerberg's monetary donation represented approximately 13% of all funds donated by the U.S.'s top fifty donors in 2013. (CNN)
THE THREAT FROM 'LIKE' FARMS: A growing threat to Facebook's business model could be the emergence of click farms, companies based in countries such as Egypt, India, and the Philippines that are paid to like posts on Facebook, thus inflating a brand's seeming popularity. This is a problem even for legitimate businesses not paying click farms for likes, because the click farms also click on real content to mask their activity. When that happens, businesses might end up paying Facebook for clicks they've received on their pages that do not actually reflect real user engagement. (Washington Post)
GAP SHARES ITS SECRET: Gap claims to be the first brand to have posted a message on Secret, the new anonymous social app that's particularly popular with tech folks. Mashable notes that Gap has also been among the first brands to advertise on other new(ish) social networks like Instagram and Vine. (Mashable)
Here's what else BI Intelligence subscribers are reading …
LinkedIn Engagement Weakens But Its Ad Business Keeps Growing
Nearly One In Five US Millennials Are Mobile-Only Internet Users
US Smartphone Penetration Ticks Up To 65% In The Fourth Quarter, But Growth Is Slowing