Solution To Facebook’s EdgeRank, Revenue And Stock Price Issues

Monday night I was climbing into bed fairly early and thinking about all of the posts and articles about Facebook and their need to drive revenue now that they are a publicly traded company. My thought process also veared to the recent firestorm and frustration surrounding Facebook’s ever-changing EdgeRank algorithm that is increasingly limiting personal and page content reach. As I continued to ponder these two connected issues I began to formulate an idea that I believe to be an effective solution to both.

An article I shared Monday from Computerworld outlines some of the changes social media is experiencing with the “pay” requirement that is creeping into the space and the frustrations that could damage the industry. Their article “Here comes the shameless social money grab” outlines why charging for social networking sites is wrong. Though not comprehensive, it does detail the huge potential backlash starting in the industry. This article was the catalyst that got me thinking on a solution.

Mark Zuckerberg, this is for you buddy. If only you would listen…

My three point Facebook plan involves core changes to EdgeRank implementation, how pages are monetized, as well as new search capabilities within Facebook. These changes are designed to improve user experience, reduce frustration, expand page capabilities and reach, as well as provide Facebook with substantial and sustainable revenue streams. Let’s jump in and review my suggested plan.

Part 1: Facebook Pages – According to Inside Facebok, there are approximately 42 million active pages on Facebook at this point. Given this valuable business use of Facebook’s network, I propose making pages a paid medium for brands at three levels. $3/mo for small, $10/mo for medium and $20/mo for large pages, depending on number of likes.

Pages represent the biggest opportunity for Facebook to enhance value to both business and consumer users of their platform and derive revenue from doing so. My proposed nominal fees for fanpages should also coincide with the removal of EdgeRank placement for these pages in users newsfeeds that have liked the page. Pages that do not subscribe to the paid platform keep EdgeRank in place, resulting in extremely limited reach to their audience.

There are numerous benefits to this aspect of my plan, but I will highlight just a few:

1) Reduction of useless and inactive pages on Facebook’s network

2) Enhanced REAL value to page owners

3) Likers get the content they have opted into without restrictions

4) Pages have more focus to attract real likes rather than fake numbers

5) Clear path to $1 Billion in annual revenue for Facebook, achieved very rapidly

6) Existing Facebook advertising revenue options still applicable, but more valuable to page owners

Part 1: EdgeRank – The EdgeRank algorithm that currently controls what content users see in their newsfeeds is a substantial barrier for Facebook’s average users experience within the platform. Part two of my plan would be to immediately remove the algorithm for personal profiles. Should a user wish to adjust their newsfeed content using existing lists they have created or purchase additional exposure, per Facebook’s recent test offering, these will remain as viable options.

Again, there are numerous benefits to removing EdgeRank for personal accounts, here are just a few:

1) User experience increases dramatically and immediately

2) Significantly more engagement and time on site will occur right away and result in more ad placement opportunities for Facebook, while not harming the personal user the way EdgeRank currently does.

Part 3: Search Enhancements – The next logical step in my plan is to modify Facebook search to mimic a Google-like web search platform for content within Facebook pages. The idea would be to allow users to search for posts that exist on all pages that is relevant to what they are looking for.

A few significant benefits:

1) Users find relevant content and new pages to like INSIDE Facebook easily

2) More users stay inside Facebook for new content discovery

3) Pages are forced to focus more on providing relevant content for their target audience

4) Facebook gets massive new Google Adwords-like revenue stream

5) Pages have additional path to target and grow likes

6) Facebook helps pages to grow from small to medium or medium to large, thus increasing revenue from Part 1 of my plan

I am not saying that I have an end all, be all solution here, but I do believe I have formulated a plan that delivers real increased value to page owners and users alike, while giving Facebook a real path to substantial revenues and ultimately a reflected stock price. As with regular and proper social media marketing, strategies based on delivering value always get the best results. My three part plan would result in value to all levels of users, pages Facebook executives and shareholders.

This is a slam dunk!

Robert M. Caruso
@fondalo
http://fondalo.com
Founder/CEO – Bundle Post

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21 Comments

Filed under EdgeRank, Facebook, Fanpage, Marketing, Social Media, Social Media Marketing, Strategy, Uncategorized

21 responses to “Solution To Facebook’s EdgeRank, Revenue And Stock Price Issues

  1. Roger G

    Pretty deep thinking before going to bed there Robert but well thought out. Seems Mark should hire you or give you a nice percentage of that new 1Billion minimum he will make from you idea.

  2. Shannon, you have obviously thought this through pretty well, and it sounds really good to me, except–let their search algorithm be a NON-GOOGLE like function as well as their “adwords” approach. We need true search competition to keep services diverse and priced well enough that us little people can make a living employing them. Don’t you think?

    • I don’t know who Shannon is Dean and I am not sure you understand search that well. In short, write good content that resonates and do it consistently and get better search ranking…

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  4. Great post, I completely agree and just don’t understand why Facebook would prefer EdgeRank over a solution along these lines. Wouldn’t it be handy to have a direct line to Mark Zuckerberg to present ideas like this or at least hear their reasoning behind the use of EdgeRank.

  5. Your plan makes good sense, Robert! I like the way you thought everything through. It sounds like a win all around, if only Mr. Z. would consider it.

  6. Robert, the brilliance of this plan is that makes more than $ense. It’s easy and true to what I believe the intent of facebook started out as.

  7. Hey Robert, I think one of the big problems is that most content that is distributed from Facebook pages is pure rubbish. It’s not interesting at all and the reason people don’t complain that much is that Facebook filters all this content out using edge rank. But if you did charge for pages a lot of the people with rubbish pages would just disappear and it would be cleaned up significantly as you say which would be a good thing. Then if businesses are paying for a presence the may really consider what content they need to produce to get value from their investment. Ok you’re convincing me now..

  8. I like approaches that helps to separate out the commercial from the social, and improve the non-consuming experience. Breaking down the pages according to their purpose and funding makes sense, still leaving the average reader freedom to choose what they access and interact with.
    I tend to think of Pheed in a similar manner; if people want to pay for tweets from celebrities that is their right, and I benefit from that noise being diverted from Twitter.

    There is no problem with commercialism, everyone has the right to make and spend money; however it should not create opportunities for the misuse and abuse of the network. Creating frameworks in which commercialism can exist openly and transparently helps all participants and contributors in social media. I hope Costello, Page, and particularly Weiner join Mark Z in understanding and implementing the concept.

  9. Those are some great ideas. Social media marketing is not a free marketing tool as it stands. A huge amount of time is spent by small businesses on these platforms promoting them and their businesses. I hope a way is found to make it economically viable for both sides!

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