While marketers everywhere seem to be focused on Facebook Timelines for brands, the latest changes to Facebook’s advertising model represent just as significant a change for brands – if not even more so.

How so, you ask? Let’s start by

A marketer’s journey on Facebook: from engagement to advertising

Facebook has a saying that, “this journey is 1% finished.” Following that mantra, if you look at the changes Facebook has made over the last year as a continuum, the company has significantly tilted the scales away from engaging content – from brands creating communities with their customers – and towards paid advertising.

There’s nothing new in the fact that the vast majority of user/brand interactions come through the news feed.  The fact is that few people actually visit your page on an ongoing basis – even those who do visit once, rarely do again. For that reason, capturing peoples’ “likes” at that time has been critical for a while, so companies can continue to interact with people in their newsfeeds. This, on its own, means that anything Facebook does that affects content is hugely significant for marketers.

Mid-way through 2011, the company changed its approach to determining what people saw in their newsfeeds, with the result that the number of people seeing posts from brands dropped significantly – by up to 75%, in fact. While many marketers may be focused on the nice shiny number of total “likes” they have, the reality is that brands’ posts are only seen by a small minority of their fans.

Sound crazy? While impressions/reach aren’t publicly visible numbers, Fangager put out an analysis of the “100 most engaging brands on Facebook” late last year, showing that even the engaging brands generally had between 0.3% and 2% “active fans”. Here’s the top ten:

Disclosure: several of these brands are Edelman clients

The average percentage of ‘active fans’ in the top ten most engaging brands is 1.5%. If you go by the maxim that 1% of people create content; 9% comment and 90% lurk, those numbers multiply up to roughly 16% of people seeing these brands’ content (consistent with the numbers that Facebook discussed at their fMC event last week..

I’ll say that again – even if you’re on the high end of the scale, only one in five fans of your Page will see your content.

Enter Facebook’s new advertising products. Distilled down to two points, the latest advertising announcements from Facebook are:

• Putting Page content as a core component of Facebook Ads
• Allowing you to reach more fans through the “Reach Generator“

Simply put, Facebook first degraded brand content over the last year, and has now released a advertising products to let companies pay to offset the changes they’ve made.

Let’s think about this in terms of customer touchpoints. Before the latest round of changes, if you set aside the Open Graph there were four primary ways to proactively reach your company’s fans on Facebook:

1. Content (proactive and engagement-focused)
2. Paid advertising
3. Creative assets (via tabs)
4. Apps

While agencies made money from all of the above, Facebook only made money off one of those. Combined with the new Timeline for brands, Facebook in one fell swoop has both expanded the overlap of advertising with content, and has reduced the impact of other creative assets (for example, you can no longer direct people to a default tab other than your wall) in one fell swoop.

Implications of Facebook’s advertising changes

I’m not saying these changes from Facebook are a bad thing. Regardless, we can’t exactly blame Facebook for making them – Facebook is a business and, as much as users may like it, engaging content on its own doesn’t generate revenue for the business.

Still, companies (and community managers) do need to pay attention. Here’s what I think we’re likely to see:

1. Staffing – community managers/analysts: Companies will need to apply new rigor to their content to optimize its performance in Facebook’s new ad products. While the more socially-advanced companies with significant investments are already doing this, this will become important for all companies with paid investments in Facebook. For those with smaller social media teams, that means community managers will find that stats and analysis are even more important skillsets, and that partnership with measurement teams is critical.
2. Processes – integration and an “and, not or” approach: Success in this new Facebook will depend on even tighter integration between community managers, content teams and paid media in order to find the right balance of engagement, business results-driven content and advertising.
3. Users – seeing more push-focused content:Yes, companies could promote engagement-focused content, but given that brands will be measuring the effectiveness of their advertising in driving business results, and weighing the opportunity cost of increased Facebook investment against other paid media, users are likely to see more push-focused posts with a clear call to action being published by brands for this purpose.
4. Lazy – some companies go the paid route: Some companies will choose to take the easy route out. Rather than optimizing their content to increase engagement in order to drive reach, they’ll simply choose to go the paid route, investing in reach generator and the new premium ads to increase the visibility of their content. Whether this will be cost-effective remains to be seen.