January 11th started out like any Thursday. Then the earth shook. A seismic shift happened in the marketing world, its impact so far-reaching, that two months later, it was the topic of the opening keynote at the Social Media Marketing World [SMMW] annual conference.
“You probably remember the fateful day – January 11, 2018," stated Michael Stelzner, CEO of Social Media Examiner, as he stepped on the conference stage. He went on to say that “on that day, the man Mr. Mark Zuckerberg, said, 'we are making a major change to Facebook'." This algorithm change, like those that are instituted on other major marketing platforms, can have positive, or often, devastating effects on businesses.
Before you think this it's an over dramatization to say an algorithm change can put you out of business, you must first understand the ecosystem that surrounds Facebook. While the public enjoys social networking on the platform, brands and entrepreneurs depend on Facebook to drive leads and ultimately sales for their businesses. It wasn't just revenue at risk, but entire companies, jobs and ultimately families would be impacted.
Platforms like Facebook, Instagram, and YouTube all need content and users. There is a symbiotic relationship between the platforms and their contributors, who are dependent on what the other has to offer to thrive. The key component that is important not to forget, is that the platform owner is always in the driver's seat, and while they need brands and users to generate and consume content, they will act in their own best interest every time.
The January 11th announcement, and the algorithm change, proved fateful for LittleThings, the millennial, female facing company that built its business primarily on Facebook over the last three years. On February 27th 2018, LittleThings announced the sudden dismissal of their 100 employees and the last day of the business. The reason? Facebook's algorithm change proved devastating to both traffic and engagement, and the millions of followers on the popular page were effectively squandered. "Our organic traffic (the highest margin business), and influencer traffic were cut by over 75 percent. No previous algorithm update ever came close to this level of decimation. The position it put us in was beyond dire," a statement from the company reads. It's worth noting that LittleThings existed only on Facebook, taking a trendy route for today's crops of influencers by building their life's work on a third-party site.
Don't put all your eggs in one basket
It's always risky business to put all your eggs in one basket, or in this case, build your entire business on one platform.
It's easy to see how companies get seduced into it. Like the Gold Rush or the heady days before the Dot Com Bubble, companies and entrepreneurs are easily seduced by the shiny object and the promise of riches, so much so that they lose perspective and rationality and throw caution to the wind. Heavy or total reliance on one client or platform, is never sustainable as it leaves you at the mercy of their whim, or in this case, algorithm change.
So just how did LittleThings, a former pet e-commerce site, hit a winning formula for sharing unique, inspirational stories about people and pets, and come to depend too heavily on Facebook?
Paul Kontonis, Chief Marketing Officer, of influencer marketing platform Whosay explains, “In a bid to woo publishers into producing content for their platforms, i.e. - Facebook, the early days of each platform were typically marked with fantastic reach and ease of building an audience for a business, whether a publisher or brand. Basically, this a pure feed that rewards early adopters who produce a lot of snackable funny, inspiring or emotional content."
In the case of LittleThings, after pivoting from pet e-commerce to content publisher, hit upon a successful formula on Facebook, rising at a meteoric rate reaching over 50 million unique views in three years. With business skyrocketing, it's easy to understand the temptation to keep riding the wave, feeling invincible. In fact LittleThings CEO, Joe Speiser was interviewed on the Digiday podcast in 2016 and said: “As long as you constantly pivot within the Facebook ecosystem, you'll be fine." This, unfortunately, turned out not to be the case.
With the discovery that fake identities were created on its platform by Russian operatives to interfere with the U.S. election, it's safe to say that 2017 was a difficult year for Facebook. With the additional disclosure that users were passively consuming content, and therefore less likely to make purchasing decisions via the platform, also Facebook's shining brand image.
In the wake of the news that Facebook was looking to support organic community building rather than business agendas, CEO Mark Zuckerberg said, “I'm changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful interactions." The shift, of course, meant that brands would get less visibility, as Facebook prioritized the content of our friends and connections. According to Zuckerberg, the move underscores Facebook's responsibility to provide value, as well as ultimately drive more revenue (as brands are forced to spend more of their advertising dollars).
Are we relying too much on 3rd party social sites for brand awareness?
Brands put a lot of marketing efforts and dollars behind raising brand awareness and getting in front of their target audience on a regular basis. The easiest way to get in front of your audience is to position yourself where they already spend time – on popular platforms.
“Publishers who focus all of their resource and energy on one platform are playing an extremely dangerous game. Algorithms are built with the sole purpose of eventually allowing the platform to monetize their service through ad-selling or requiring publishers to pay for reach. This means at any point, if it suits the platforms, the algorithm can completely switch without any warning, leaving your page in a position where it's barely half as effective as before," cautions Catty Berragan, Creative Director of Social Chain.
While the temptation can be great to rely on other platforms, marketers need to create compelling reasons for their audience to return to their own platforms, again and again. Marketers, like algorithms, must stay on top of their audience and foresee change on the horizon so they can be ready for the change before it arrives.
Ingredients for long-term success
Berragan advocates for more diversification and looking at 'less busy platforms' to publish on, while Kontonis recommends focusing on content that is irresistible to your target audience. Both ideas need to be embraced by brands that want to be successful in both the short term and the long term.
New platforms, new algorithms will come and go. Mark Schaefer, the author of Return on Influence, closed his SMMW keynote with this sage advice:
“Embrace this chaos, we'll be seeing more of it."
Brands that succeed over the long term will go back to basic good business practices of creating great content their audience wants, distributed over a healthy mix of their own platforms and those that they don't own, but that their target audience frequents.
Listening to customer feedback and being nimble, adaptable and ready to turn on a dime, as prevailing tastes and engagement shift are key components of long-term success for brands. While large numbers have dazzled advertisers, the truth remains that a smaller more relevant and engaged is more valuable than a larger, less engaged one. Know your audience better than they know themselves. The right kind of content in front of the right audience is very valuable, just make sure you keep most it on platforms you own or control.
Three years ago, I made a deal with myself - I wanted to have $100,000 saved when I'm 25. But I didn't mind if it didn't happen until the day before my 26th birthday.
One of my biggest priorities in life has always been to save as much money as possible — and I owe much of that to my parents, who made sure I had a strong financial education at a young age.
My dad even helped me start a vending machine business when I was nine. The experience taught me essential skills like how to pitch a business, cope with rejection and open a checking and savings account.
For the past three years, I've never made more than $80,000. About a year ago, I reviewed my rate of savings and investments and realized that I was on track to save $100,000. With only a car loan away from being debt free, I've got another year and $10K to go!
I want to acknowledge that privilege is a key part of my story. I'm white, I come from a middle-class family, and I was able to graduate college without any debt. All these things helped a great deal.
But my parents didn't raise me with a silver spoon. Paying for college was a collaborative process. We'd sit down at least twice a year to discuss how we were going to pay for the next semester. The first question they'd always ask me was: "How much can you contribute?"
I've been fortunate. But it also takes a lot of hard work, sacrifice, and responsibility to save and maximize your earnings. Feeling motivated and knowing that I'll be prepared for whatever life throws my way fuels my drive to keep making smart financial decisions. Here's how I'm getting to $100K.
- I side-hustled
This kick-started my journey towards six-figures. In addition to saving the majority of my 9-5 salary, my first year of freelance social media marketing made me quite a bit of cash that I could immediately save. I was able to establish both a SEP IRA and a fully-funded emergency fund with my earnings.
2. I started investing early
Knowing that compound interest is so important, I wanted to start investing early to have my money work for me. Once I started my first big-girl job, I opened my first Roth IRA. Starting to save for retirement at age 22, I was able to max out my Roth each year and also contribute to aSEP IRA and a non-retirement investment account. My first job out of school had a 401(k), but you couldn't contribute until you were there at least a year. Knowing I wasn't planning on staying long — I was at that job for a year and a few months — I opened a Roth 401(k) and then rolled my earnings to my Roth IRA.
3. I negotiated salary offers and raises
Negotiating should be a collaboration, not a confrontation. Growing up, I watched my father sit on hold, patiently waiting to negotiate our cable and phone bills. Negotiation was always part of my life, and I grew up with parents who knew how to do it. So when I was offered my first social media freelance gig, I negotiated over $10k more than they offered. And after achieving a 20% bump at my first 9-5, I negotiated $20k more than what was offered at my next job. And $10k more at the next job. If negotiating for raises freaks you out, here's a guide that can help.
4. I've automated my savings
Automating your money not only makes your life easier, but it makes you feel like the percentage you're saving just doesn't exist. I have 26% of each paycheck automatically deposited into a high-yield savings account. This savings account is purposefully at a different bank than my day-to-day checking account, so I'm less likely to withdraw from it and less likely to think about it. This "set it and forget it" level of financial freedom was something I worked hard for -- through money diarying, budgeting, and conscious spending. So now, my savings amount is completely on autopilot.
At the age of 24, I know that I am on the right track to make my goal a reality. Inspired by my own journey, I wanted to help women everywhere to have that same feeling of confidence that financial education gives — and get information from someone who isn't an old, rich white dude. As a money speaker and coach, I run Her First $100K, a financial literacy platform for millennial women on the path to get their first $100K too.
It's possible to achieve your first $100K — whether that's debt paid off, earned, saved, invested, or something else. With intentional strategies and focus, you've got this!