Last fall, tech billionaire and Dallas Mavericks owner Mark Cuban made waves when he loudly and publicly blasted Facebook for changing its rules in a way that made it harder for brands to reach their audiences. Cuban said he (and the 70 companies he’s invested in) would turn away from Facebook and focus attention on other platforms, like Twitter and MySpace.
But now Cuban says Facebook has changed its ways, and lately he and his brands have been diving back in.
“We are testing the new platforms Facebook has created. They have definitely gotten smarter,” Cuban says via email. “They are customizing their platforms based on usage,” he says, and not “forcing us to play roulette with promotions.”
Cuban won’t go into detail, but says, “We are working with them on multiple projects. We still focus on Twitter more at this point, but have opened the door to Facebook opportunities other than promoted posts. I’m still not a fan of sponsored posts, but some of their new programs show promise.”
Furthermore, Cuban says, because of changes Facebook has made, “focused spending is becoming more effective.”
Cuban is not the only prodigal son advertiser returning to the Facebook fold. In April, General Motors said it would resume advertising on Facebook, a year after saying it would stop spending money on the platform.
How the Trouble Started
Last year, a lot of people got ticked off when Facebook changed its EdgeRank algorithm, which determines what content gets surfaced in users' News Feeds. Some brands saw a huge and sudden decline in their reach -- in some cases, up to 50 percent.
Some suspected Facebook was choking off reach in order to push brands to spend money on sponsored posts. Facebook insisted that wasn’t so, and that it had changed the EdgeRank algorithm to cut down on the amount of spam that was showing up in users' News Feeds.
Nevertheless, Cuban and others were upset because they had invested lots of time and money into building big followings on Facebook, but now had to pay to reach them. Cuban said he would stop trying to build more audience on Facebook. “Why would a brand invest in getting Likes they can’t reach without paying a premium?” Cuban said.
Facebook Listens and Adapts
Since the outcry, Facebook hasn’t changed the percentage of sponsored versus organic content in the News Feed. But what it has done is introduce a bunch of tools that let marketers target relevant audiences, so their spending is more effective. The idea is to let marketers reach the right people at the right time.
Most of these targeting tools are available to all Facebook advertisers, including self-service advertisers.
Cuban won’t say which of these new tools are most intriguing to him. But here are some of the most important ones:
This tool, introduced last September, lets you reach people with whom you have a relationship outside of Facebook. Give Facebook your email or phone list and it will match your data with data from Facebook members -- everything gets “hashed,” i.e. anonymized -- so you can reach your list member when they’re on Facebook. Learn more in our how-to article here or in Facebook's documentation here.
This tool, introduced in April, lets you target clusters of people based on their behavior outside of Facebook. Data generated by third-party firms like Acxiom, Datalogix, and Epsilon lets Facebook identify, say, people who buy lots of orange juice. So if you’re selling orange juice, you can target a promotion at just those orange juice lovers. Again, everything is hashed. Learn more here.
Also known as FBX, this tool was first introduced last September and then added to the News Feed in March. It is basically Facebook’s retargeting service and involves partnerships with Facebook-approved Demand-Side Providers (DSPs). Put a pair of shoes in your shopping cart on a big retailer’s site, but don’t buy them -- and then when you go to Facebook, you’ll see an ad for those shoes. Learn more in our coverage of FBX here.
Facebook has already started seeing results from these targeting tools. The unique “x-out rate” (percent of people who click X to close an ad unit) for ads using the Custom Audiences targeting tool is 15% lower than for ads that are not using that tool, Facebook says.
As for Cuban, he doesn’t think Facebook is making changes based on his protest -- “I don’t think I had any influence at all,” he says. Nevertheless, the fact that Cuban is now saying good things about Facebook speaks volumes to that company’s ability to adapt and respond.