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How Facebook has literally taken your friends, fans for ransom

Facebook made some changes recently that were quiet, sneaky, and still wildly misunderstood by many, but if you’ve noticed that the number of people seeing your Facebook Page updates has plummeted, it’s because Facebook wants you to pay up…

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facebook i want my friends back

facebook i want my friends back

Big changes at Facebook – maybe not such a great option…

When it comes to free social media, you, as a professional, have quite a few options. None have been more popular than Facebook—until recently, that is. Facebook has recently launched their new promotion options, for both company and individuals’ pages. However, many are now weighing in, claiming that this “option” isn’t much of an option. For some companies, it can either mean professional death or an overextended bank account.

Here’s how it has played out.

Starting a few months ago, innumerable businesses across the country noticed that their normal traffic from Facebook to their websites dropped significantly. It was later discovered that only about 15% of their fans were seeing their company updates on Facebook. So, what happened to the 85% who willingly liked their pages but now weren’t seeing their updates? Now, businesses have to pay depending on how many subscribers they want to reach. Keep in mind that these subscribers have already liked their pages voluntarily, and, undoubtedly, because they want to see these company updates. So, unless you pay for each post, only a small handful will actually see what you post.

You’re going to pay if you want to reach your own fans

While the idea behind this change could actually make business sense, Facebook’s execution has been less than desirable. Let’s start with the per-post fees. As of right now, the fees are based on the percentage of your fans you want to reach and your geographic location. The Dangerous Minds blog details their experience with promoted posts and their cost. For them, they have to pay $200 per post in order to have a post on the newsfeeds of all of their subscribers.

Now think of the small business or the freelancer trying to promote their businesses. These types of professionals are essentially being shut out by Facebook. Companies who are used to posting ten posts per day are looking at roughly $2,000 each day. Other than large corporations with expansive budgets, who can afford those kinds of fees? Definitely not small business owners in today’s economy.

Facebook created a solution to a problem. However, Facebook also created the problem first—on purpose—by limiting businesses’ outreach to their subscribers well before the idea of promoted posts was released. Facebook created panic so that more businesses would be inclined to accept promoted posts as a reasonable and easy fix to their lack of traffic and post shares.

Your Facebook “friends” are being held for ransom

Here’s the problem. No one likes to pay for something that they originally got for free. Facebook may feel they are making up for decreasing stock values and increasing the worth of their company, but what they’re really doing is pushing their best customers and users away. These users will go somewhere else, and chances are it will be to a direct competitor.

Promoted posts may be a short-term fix for Facebook’s value problems, but it will ultimately leave them only with large corporations advertising to each other, as Facebook is also charging individual users $7 to promote personal posts. So, if you’ve wondered where your Facebook friends have gone, now you know they’ve been taken for a ransom.

The American Genius Staff Writer: Charlene Jimenez earned her Master's Degree in Arts and Culture with a Creative Writing concentration from the University of Denver after earning her Bachelor's Degree in English from Brigham Young University in Idaho. Jimenez's column is dedicated to business and technology tips, trends and best practices for entrepreneurs and small business professionals.

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14 Comments

14 Comments

  1. btrandolph

    October 31, 2012 at 9:27 am

    remember when the internet was all about free exchange of ideas? users were outraged by the idea of commercial use of the channel and pledged to exit en masse if they ever saw an advertisement. we all know how that worked out.
     
    the changes to the edgerank algorithm controlling post visibility is in one sense a return to this idealism. social marketers have dismissed traditional mass promotion as broadcast and interruption marketing, sniffing “it’s about the conversation.” the changes to facebook are asking marketers to walk the walk. facebook is not penalizing brands and organizations whose fans are interacting with them through likes and comments and shares. effective marketers are having conversations. facebook is happy to let old-school marketers continue to shout – they are just asking them to pay for the opportunity as they would with any other promotional channel.
     
    if a tree posts in the forest and nobody retweets it, does it make a sound?

    • AGBeat

      October 31, 2012 at 9:49 am

      @btrandolph What about the one person business, what about the non-profit? It’s not just corporations being punished after being prompted, prodded, and pleaded with to join Facebook and give up their private information and drive traffic to the site for Facebook’s benefit. We could all sit by and allow our personal data to be repackaged and profited from, but when someone earns a fan, they should be reaching that fan on their newsfeed.
      Changing the rules (as FB often does) so dramatically is just wrong. This isn’t the same as the original days of the internet. Many of us remember them, and the algorithm change is NOT a return to that idealism, unless Facebook forces companies and non-profits to be limited in their reach to the fans they’ve earned. Again, this is not a return to idealism – let’s do some math here:
      Facebook = Property Manager
      Boutique = Page Owner
      Property Rent = Time sharing / gathering data for Facebook
      So in this scenario, a Property Manager puts a lock on a local Boutique’s door and claims that they must pay extra in order for the lock to come off *every time* someone waiting outside wants to come in. The boutique already has earned the customer that wants in, the property manager already has the rent, but without notice, there is an extra gatekeeper now between the two that doesn’t care if it bleeds the Boutique dry with fees not arbitrarily added during their lease (which would be illegal, by the way). In your scenario, there is no property manager, and the world is filled with nomadic squatters, but times have changed, and that world mostly keeps to itself on 4chan.
      The algorithm change not only punishes those who are actually good at social media and has earned fans, but limits Facebook’s long term growth –  piss off enough people, and G+ is just sitting there, begging for people to actually use it…  
      -@LaniAR

      • AGBeat

        October 31, 2012 at 9:54 am

        I would add that I don’t believe this is exclusive to brands. Promoted posts exist for personal users as well, so again, I don’t agree that this is some way of making Facebook ideal like the old days of commercial-free interwebs.

      • btrandolph

        October 31, 2012 at 1:06 pm

        @AGBeat  @LaniAR apologies for implying that facebook was doing this out of idealism rather than monetizarion! my point was only that the effect of the changes pushes facebook marketing away from develop an audience and then talk AT it and more toward engagement.
         
        I don’t understand your question about the one-person business or non profit? non-profits are content machines whose primary revenue drivers are passion and engagement – facebook pages were made for these organizations. non-profits can use facebook to cultivate their most engaged fans and ideally raise awareness through those engaged constituents’ networks by encouraging them to share posts and fundraising appeals. if a non-profit is pushing stuff out to its network that no one responds to, then it’s time to look at the content strategy, not to get whingy when facebook cuts the size of its free lunch.
         
        for sole proprietors, facebook is an opportunity to build engaged followers, not a free megaphone to shout over and over to those who’ve expressed a passing interest. heck yes, fb changes the rules – it has investors to keep happy and like every business out there, a constant need to identify and develop revenue streams.
         
        your math metaphor is too confusing to address.

  2. Sheila Wall Bell

    October 31, 2012 at 9:40 am

    Maybe a must read, but wish I didn’t know it…ignorance can, indeed, be bliss? Now I’m just plain mad.

  3. Jim Duncan

    October 31, 2012 at 9:42 am

    Yet another reason I absolutely loathe Facebook

  4. StacyStateham

    October 31, 2012 at 10:27 am

    “For them, they have to pay $200 per post in order to have a post on the newsfeeds of all of their subscribers”  – Page posts have never shown up in the newsfeeds of All Subscribers.. it has always, and still does to a large extent, depend on the EdgeRank of the page, engagement, etc.    Pages that had low engagement rates prior to the change are getting filtered out even more than they did before.  Pages that have high engagement should be just fine.  If you’re posting quality content that your audience likes, there’s no need to panic.  If you’re posting content that your audience doesn’t like, the problem isn’t Facebook’s algorithm, it’s your content.  Here’s a link to the official Facebook statement on the subject… https://www.facebook-studio.com/news/item/news-feed-engagement-and-promoted-posts-how-they-work

  5. Diana Hoyt

    October 31, 2012 at 10:50 am

    Is Mark Zuckerberg TRYING to kill Facebook???? Sure seems like it. I’ll just find another venue. I won’t pay for any of this.

  6. MattsMedia

    November 1, 2012 at 6:10 pm

    Lately I hear a lot of people tell me there is too much “noise” and irrelevant information on Facebook. If there was any adjustments to the News-Feed algorithm it would make the Facebook experience better for the non-business users (eg, the 99% 😉 – no complaints here, I’ll stick to FB ads for business.

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Business News

Big retailers are opting for refunds instead of returns

(BUSINESS NEWS) Due to increased shipping costs, big companies like Amazon and Walmart are opting to give out a refund rather than accepting small items returned.

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Package delivery people holding deliveries. Refund instead of returns are common now.

The holidays are over, and now some people are ready to return an item that didn’t quite work out or wasn’t on their Christmas list. Whatever the reason, some retailers are giving customers a refund and letting them keep the product, too.

When Vancouver, Washington resident, Lorie Anderson, tried returning makeup from Target and batteries from Walmart she had purchased online, the retailers told her she could keep or donate the products. “They were inexpensive, and it wouldn’t make much financial sense to return them by mail,” said Ms. Anderson, 38. “It’s a hassle to pack up the box and drop it at the post office or UPS. This was one less thing I had to worry about.”

Amazon.com Inc., Walmart Inc., and other companies are changing the way they handle returns this year, according to a report by The Wall Street Journal (WSJ). The companies are using artificial intelligence (AI) to weigh the costs of processing physical returns versus just issuing a refund and having customers keep the item.

For instance, if it costs more to ship an inexpensive or larger item than it is to refund the purchase price, companies are giving customers a refund and telling them to keep the products also. Due to an increase in online shopping, it makes sense for companies to change how they manage returns.

Locus Robotics chief executive Rick Faulk told the Journal that the biggest expense when it comes to processing returns is shipping costs. “Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost,” Faulk said.

But, returning products to physical stores isn’t something a lot of people are wanting to do. According to the return processing firm Narvar, online returns increased by 70% in 2020. With people still hunkered down because of the pandemic, changing how to handle returns is a good thing for companies to consider to reduce shipping expenses.

While it might be nice to keep the makeup or batteries for free, don’t expect to return that new PS5 and get to keep it for free, too. According to WSJ, a Walmart spokesperson said the company lets someone keep a refunded item only if the company doesn’t plan on reselling it. And, besides taking the economic costs into consideration, the companies look at the customer’s purchase history as well.

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Google workers have formed company’s first labor union

(BUSINESS NEWS) A number of Google employees have agreed to commit 1% of their salary to labor union dues to support employee activism and fight workplace discrimination.

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Google complex with human sized chessboard, where a labor union has been formed.

On Monday morning, Google workers announced that they have formed a union with the support of the Communications Workers of America (CWA), the largest communications and media labor union in the U.S.

The new union, Alphabet Workers Union (AWU) was organized in secret for about a year and formed to support employee activism, and fight discrimination and unfairness in the workplace.

“From fighting the ‘real names’ policy, to opposing Project Maven, to protesting the egregious, multi-million dollar payouts that have been given to executives who’ve committed sexual harassment, we’ve seen first-hand that Alphabet responds when we act collectively. Our new union provides a sustainable structure to ensure that our shared values as Alphabet employees are respected even after the headlines fade,” stated Program Manager Nicki Anselmo in a press release.

AWU is the first union in the company’s history, and it is open to all employees and contractors at any Alphabet company in the United States and Canada. The cost of membership is 1% of an employee’s total compensation, and the money collected will be used to fund the union organization.

In a response to the announcement, Google’s Director of People Operations, Kara Silverstein, said, “We’ve always worked hard to create a supportive and rewarding workplace for our workforce. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”

Unlike other labor unions, the AWU is considered a “Minority Union”. This means it doesn’t need formal recognition from the National Labor Relations Board. However, it also means Alphabet can’t be forced to meet the union’s demands until a majority of employees support it.

So far, the number of members in the union represents a very small portion of Google’s workforce, but it’s growing every day. When the news of the union was first announced on Monday, roughly 230 employees made up the union. Less than 24 hours later, there were 400 employees in the union, and now that number jumped to over 500 employees.

Unions among Silicon Valley’s tech giants are rare, but labor activism is slowly picking up speed, especially with more workers speaking out and organizing.

“The Alphabet Workers Union will be the structure that ensures Google workers can actively push for real changes at the company, from the kinds of contracts Google accepts to employee classification to wage and compensation issues. All issues relevant to Google as a workplace will be the purview of the union and its members,” stated the AWU in a press release.

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Business News

Ticketmaster caught red-handed hacking, hit with major fines

(BUSINESS NEWS) Ticketmaster has agreed to pay $10 million to resolve criminal charges after hacking into a competitor’s network specifically to sabotage.

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Person open on hacking computer screen, typing on keyboard.

Live Nation’s Ticketmaster agreed to pay $10 million to resolve criminal charges after admitting to hacking into a competitor’s network and scheming to “choke off” the ticket seller company and “cut [victim company] off at the knees”.

Ticketmaster admitted hiring former employee, Stephen Mead, from startup rival CrowdSurge (which merged with Songkick) in 2013. In 2012, Mead signed a separation agreement to keep his previous company’s information confidential. When he joined Live Nation, Mead provided that confidential information to the former head of the Artist Services division, Zeeshan Zaidi, and other Ticketmaster employees. The hacking information shared with the company included usernames, passwords, data analytics, and other insider secrets.

“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” said FBI Assistant Director-in-Charge Sweeney.

In January 2014, Mead gave a Ticketmaster executive multiple sets of login information to Toolboxes, the competitor’s password-protected app that provides real-time data about tickets sold through the company. Later, at an Artists Services Summit, Mead logged into a Toolbox and demonstrated the product to Live Nation and Ticketmaster employees. Information collected from the Toolboxes were used to “benchmark” Ticketmaster’s offerings against the competitor.

“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” said Acting U.S. Attorney DuCharme in a statement. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”

The hacking violations were first reported in 2017 when CrowdSurge sued Live Nation for antitrust violations. A spokesperson told The Verge, “Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”

To resolve the case, Ticketmaster will pay a $10 million criminal penalty, create a compliance and ethics program, and report to the United States Attorney’s Office annually during a three-year term. If the agreement is breached, Ticketmaster will be charged with: “One count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.”

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