India@75: A nation in the making

Organic reach will continue to decline, says Facebook India chief

Kirthiga Reddy says the strategy is dying a natural death and warns of its limitations for businesses

Shruti Venkatesh
Published: Jul 27, 2015 06:26:12 AM IST
Updated: Jul 27, 2015 11:22:11 AM IST
Organic reach will continue to decline, says Facebook India chief
Image: Sunil Shirsekar / Fotocorp

The conference hall was a beehive of activity as women participants—entrepreneurs, marketing and advertising professionals, bankers and a few students—jostled for prime seats.

They had arrived, eager to learn ways to use Facebook professionally from the social network’s India MD, Kirthiga Reddy, who was to deliver the keynote address at the event on July 10 in Mumbai, organised by the Mumbai chapter of the Ficci Ladies Organisation (Ficci-FLO).

Reddy, who is also Facebook’s first employee in India, began by outlining the company’s journey in the country and how it has transformed from being a mere social networking platform to a digital broadcasting medium. “In India, around 60 million people use Facebook every day: That’s seven times more than the country’s leading English daily in terms of reach,” said Reddy.

However, a good part of Reddy’s hour-long talk was spent in trying to address a major concern shared by most in the audience: Facebook’s diminishing ‘organic reach’. (In social media, ‘organic reach’ is the number of unique users who are shown a post through unpaid distribution, as opposed to ‘paid reach’, wherein users are shown a post through ads.)

Reddy tried to play down the fears: “At any point, there are about 1,500-odd stories that can be served to a user. But they can consume only about 300,” she said. “People often accuse Facebook of (unduly) trying to garner higher advertising revenues by capping organic reach. That’s a myth. We are only changing the algorithm to serve content that’s most relevant to you. Otherwise, you will stop coming to Facebook.”

But in a matter-of-fact-tone, Reddy added: “Organic reach will continue to decline. That is just the nature of the platform. But businesses must reflect on whether an investment in Facebook is giving them returns. If you invest Rs 10 and you get returns of Rs 50-100, that makes for the right business case.”

Facebook today has over two million advertisers across the globe on its platform. For sticklers of organic reach, Reddy recommends investing in creative strategies, personalised marketing and relevant content to reach out to a wider audience.

However, in the same breath, she warns: “As you grow, if you are only going to base your growth on organic reach, then it is a limited strategy.”

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(This story appears in the 07 August, 2015 issue of Forbes India. To visit our Archives, click here.)

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