Facebook's EdgeRank Changes: A U.K. Company Claims They're Killing Small Businesses

A U.K. company that makes an app to help charities raise money says it may need some charity of its own, after nearly being run out of business because of changes to how Facebook lets it connect with its fans.

The makers of Charity Engine grabbed the vanity Facebook URL https://www.facebook.com/CharityEngine as soon as it became available in January 2010, even though its product was still far from being launched. The company used Facebook to explain the product, which offers computer users prizes to use idle time to raise money for causes, to prospect for users and to alert those fans as soon as it was launched.

Through most of 2010 the company placed advertisements in Facebook and its fan base quickly grew.

“By November we had over 100,000 fans from all over the world and we'd never even posted to the page,” CEO Mark McAndrew said. “As Charity Engine needed just 10K users to be viable, and cost nothing to download, this was hugely exciting.”

Now, however, Charity Engine is claiming rapid changes to how Facebook’s EdgeRank promotes posts are threatening its very existence. Charity Engine can’t contact its Facebook fans with any degree of certainty to let them know the product has launched unless it pays for a promoted post, something it says it can no longer afford to do because its Facebook marketing strategy backfired.

Facebook has yet to respond to requests for comment, but last month, when similar allegations were raised, Facebook defended how it presents brands’ posts to their Facebook page. At the time, the company essentially blamed brands for not creating engaging content, which is ultimately seen by fewer users.

“If a brand is continually putting up low-quality content that no one is engaging with, that content is going to be optimized out of the Newsfeed,” a company employee said at the time.

Sinking Engagement Levels

Charity Engine’s excitement over the initial response to its Facebook page was short-lived. As the company started making wall posts, the engagement was about one-in-500 responses from fans. On its long-anticipated launch day, Charity Engine found that Facebook had ditched group messaging, meaning, on average, just 12% of their fans would even see any post on its wall (including posts promoting the launch). And, in reality, McAndrew said, the number was closer to 5%.

“Facebook actively prevents sharing with the argument that EdgeRank is a useful and friendly filter, only letting the most-wanted content get through,” McAndrew said. “With fans worldwide, we knew our wall post wouldn't be seen by everyone, but now we knew it hadn't even been sent to everyone. How many had never received it?”

In those days, before Facebook started offering paid, promoted posts, the company’s answer was simple: create more engaging content and EdgeRank would score that content more highly, meaning more people would see Charity Engine’s posts. Charity Engine started producing non-commercial content designed to engage fans. But McAndrew said no matter what they posted, engagement continued to plummet.

McAndrew said his team started talking with Facebook directly. They took solace in the fact that, at the very least, they could send messages directly to followers, although the process was more tedious than simply posting it on the fan page. Then last year Facebook said it was suspending the ability for brands to directly message fans. 

At the same time, McAndrew said there were other problems, including an analysis of the brand’s followers that found about one in five of Charity Engine’s likes were from dead or fake accounts. Conversion and click-through rates were “terrible.”

McAndrew said in hindsight, his firm probably should not have invested its entire marketing budget in Facebook. But the early successes led the team to believe the giant social network was the best method for reaching potential users. By January, when it was set to award its first prize, Charity Engine had just 1,300 users, well below the 10,000 the firm needed to remain viable.

False Hope In Promoted Posts

“We cancelled our advertising and complained to Facebook customer services, an experience not unlike writing several letters to Santa Claus and throwing them down a well,” McAndrew said. “But, eventually, our prayers were answered – fan pages would be given the ability to 'promote' their posts (for a fee, of course) to fully 75% of their fans! The page wasn't a write-off at all, we would still be able to contact them.”

McAndrew said that sounded like a bait-and-switch marketing ploy, but he also felt stuck: The company had spent more than two years building up its Facebook page and followers. The relief promoted posts brought was short-lived: by the time the service was rolled out to Charity Engine, McAndrew was told it would cost up to $4,500 per post. Had he known how much promoted posts would have cost ahead of time, McAndfrew said, he would have spent the money on a half-page ad in the New York Times, which is what he estimates his company has spent on Facebook advertising to date.

Meanwhile, the number of fans seeing posts on Charity Engine’s Facebook page has continued to drop to less than 1%.

“Tried demanding a refund, threatening to go public or delete the page, even pleaded with them to not basically put us under - and offered to share a software patent they could have used,” McAndrew said. “Nada.”

Charity Engine’s solution? It’s giving up on Facebook. On Friday it posted a message to its fans saying just 0.3% of its followers were now seeing its posts because it wouldn't pay as much as $4,500 to promote each post.

“Have we shown you our Google+ profile...? ;)” the post concluded.