“The cost to acquire users skyrocketed through whatever changes Facebook might have made,” said The Loop Loft’s founder, Ryan Gruss. “Also, more companies have come to Facebook to advertise, so the cost to advertise on Facebook is also going to go up.”
(The Drum recently reported a 700% rise in Facebook CPMs, which Pollack said was in line with SumAll’s findings.)
Gruss calls these changes “disheartening.”
“We developed a ‘like’ fan base on Facebook of almost 150 thousand people. But we now have to pay again just to reach them,” he said. “Even if we put a really engaging, creative post up, people don’t see it unless we put money behind it.”
Pollock, however, wasn’t sure how much blame for these changes lay with click farms and how much went to Facebook’s deliberate algorithmic changes.
“I couldn’t offer a percentage,” said Pollock. “But I think there’s an aggregate effect that’s happening.”
But SumAll’s findings were hard to swallow for Jan Rezab, CEO of analytics firm Socialbakers.
“I don’t believe that click farms are attributing to rising CPMs on Facebook,” Rezab said. “Facebook itself says that the maximum click farm ratio is a small percentage, which I believe.”
Rezab noted that click farms aren’t exclusive to Facebook and that click fraud is an industry-wide problem.
He said Facebook’s rising ad costs had to do with lack of efficiency in the buying ecosystem. “If you clutter a lot of ads into the system, the natural price will keep increasing,” he said. “If more people compete for the same space, they will have a less effective, thus more expensive ad.”
Regardless of the reason, the decline in organic reach has changed Facebook’s value proposition.
“We still advertise on Facebook and we will continue to do so in the future, but we approach it much differently now,” Gruss said. “Now we’re using Facebook to target users and get direct conversions on sales, rather than just trying to get users to like our page.”