Facebook Wants to Reduce Engagement. Huh?

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Facebook (NASDAQ: FB) announced today that it is cracking down on "engagement bait," which is when a post specifically calls for users to act on posts through actions such as liking, commenting, or sharing. Most Facebook users have surely seen these types of posts, and the company believes they exploit Facebook's News Feed algorithm, which in part measures relevance by looking at engagement.

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Facebook will start demoting posts from people and Pages that use engagement bait to get broader exposure to their content. The company would prefer that users participate in "authentic engagement" instead of being coaxed to engage in certain posts.

The power of the algorithm

The social network says it has reviewed hundreds of thousands of posts that it then fed into its machine learning model in order to detect engagement bait, and these posts will start to be demoted in the News Feed and subsequently reach fewer people. Pages in particular will see stricter demotions if they're serial offenders and "repeatedly use engagement bait to artificially gain reach." Facebook will give Pages a few weeks to adapt and "avoid inadvertently using engagement bait in their posts."

However, soliciting help, advice, or recommendations from friends and family will not be penalized, which includes things like sharing a missing child report or fundraising for a cause, among others. The company says it the change is part of its pursuit of authenticity, which includes its announcement from May that it would be similarly demoting clickbait headlines.

The broader context is that Facebook has been widely criticized for its role in inadvertently spreading fake news during the 2016 election cycle, which was exacerbated by its relevance algorithms promoting inaccurate but viral political content. Facebook wants to "reduce the spread of content that is spammy, sensational, or misleading." Tech companies, including Facebook, also spread misinformation in the wake of the recent Las Vegas shooting due to their algorithms, further underscoring how powerful these algorithms have become.

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Over the years, various hoaxes have spread over social media, often driven by this type of engagement bait. In at least a few instances, users were told that Facebook was preparing to implement a monthly service fee, but that sharing the post would somehow allow them to avoid having to pay the fee. The language on Facebook's greeting page to new users that proclaims the service is "free and always will be" was in part a response to these recurring hoaxes.

Giveaway scams, which promise valuable prizes like cars or gadgets if a user comments or shares, are also on the rise.

Long live the algorithm!

Facebook and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google compete aggressively to send referral traffic to publishers, and there was a noted reversal over the summer: Google overtook Facebook to become the top referrer, according to web analytics company Parse.ly. That came about two years after Facebook first surpassed Google in referral traffic in 2015. Parse.ly derives its findings from publisher customers that use its analytics service, including prominent outlets like The Wall Street Journal and The Telegraph.

It's not clear why Facebook's referrals have declined relative to Google's, but Facebook continuously tweaks its News Feed algorithms. Much like Google's search algorithms, many companies rely heavily on Facebook's social algorithms. Facebook started granting higher priority to social content from friends and family over publisher content last year, and began experimenting with segregating these content categories completely in select markets a couple months ago.

If Facebook's relative decline in referral traffic in recent months is the product of algorithm changes, that could potentially hurt the ad business. Referral traffic and ad spending are intimately linked. However, CEO Mark Zuckerberg made clear in a statement in the last earnings release that it would be worth the financial sacrifice:

We're serious about preventing abuse on our platforms. We're investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool has a disclosure policy.