Brands pay price for Facebook IPO

The days when brands could set up a free Facebook page, then sit back and wait for consumers to press the ‘Like’ button and pass the recommendation onto their friends via News Feed could soon be at an end.
That is according to a study by US marketing firm BlitzLocal. The company says that between June 1 and December 31 of last year, unpaid displays of “organic” marketing posts to users fell by 33% among its more than 300 clients.
“Content that used to live for a day may now live minutes in a user’s News Feed,” said Dennis Yu, chief executive of BlitzLocal, which analyzed some 5.7 million posts.
The move is said to be part of the social networking giant’s plans to sign up brands to Sponsored Stories, and bring in more advertising revenue in line with its recent IPO proposal.
“Over the past couple of years, Facebook has started to make it more challenging to appear in the News Feed,” said eMarketer analyst Debra Williamson. “If Facebook wants to derive more revenue from big brand advertisers, they want to be in that News Feed where everybody’s eyeballs are.”
Another analyst added: “Facebook is placing a major bet on Sponsored Stories. The News Feed has been the long unchartered territory where Mark Zuckerberg would not take marketers. That is not by accident. That is a more powerful unit than slapping banner display ads.”

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