- Facebook is gunning to compete in the space of reach, frequency & engagement
- To speak the marketer language, FB is talking return on investment (ROI) instead of clicks, impressions, likes & such metrics
- Connecting the next five billion will be achieved through mobile - the ace card in FB's growth plan
- Innovation in product & on device and multi app approach cornerstone to FB's mobile first philosophy
The first thing one observes in a conversation with Dan Neary is the clarity of thought in what Facebook stands for. For the Vice President of the social network’s APAC operations, this precision of Facebook’s role towards all its stakeholders — consumers, the communication business and marketers — is important. Not because despite its laurels, Facebook is still a young media company but because Facebook has decided to challenge the very banner of ‘social’, and be considered in the set of the so-called mainstream marketing channels – in short, compete with any medium whose selling points include reach, frequency and engagement.
As ambitious as that sounds, the pursuit does not come without hurdles. Of all the comments that the industry has on Facebook, one that surfaces more often than not is that Facebook has become a bit of a confused case — is its purpose connecting with friends, discovering even? Is it about how many Likes one can get on a brand page or a status post? Is it about accessing news and information that are beyond personal – unlike what it was a decade ago? The list goes on.
Comparables in the domain don’t face that problem just yet. Twitter, for instance, in its microblogging format, has ably captured the space of what is happening in the moment – the scope may arguably be limited but the platform’s positioning is clear. LinkedIn is another example. Focussed on professionals, LinkedIn broadened its scope towards creating content but always stayed true to its core proposition.
Facebook’s definition, in that sense, cannot be constrained to a single hashtag. This should not come as a surprise. Facebook is facing every challenge that a domain pioneer does. In its everyday journey, it is defining what a social media company should be. And if its 2013 financial reports are anything to go by, Facebook is doing a very good job of it so far.
Likes, clicks, impressions be gone… Make way for ROI
The personalisation that social media enables, augments the digital promise of saving the wasted advertising dollar. In its current avatar, Facebook is reminding marketers of this promise. “It is really important to distinguish social from a marketing tool. Social is how people connect. One of the big challenges we have is when marketers limit their thinking by putting on a social cap. We are a network of 1.2 billion people. It would be a missed opportunity to only think Likes. For a social platform too, marketers would shift from likes and fans to standard marketing of reach, frequency and relevant messaging,” remarks Mr Neary.
He states that unlike properties that are still engaging marketers on clicks, impressions and likes, Facebook keeps the conversation on moving units in terms of real business – whether it is driving purchase intent or ultimately impacting sales.
One factor that matters here is measurement. “Some of that is driven on our site,” informs Mr Neary, and adds, “We are able to tell brands with 100 per cent certainty how many people saw an ad and did they follow that with action on the ecommerce or online site. On the offline, we partner with data providers to marry our online exposure of ads with offline data and then report to brands such as Unilever and Proctor & Gamble (P&G), the impact on sales when the brand is exposed to the right TG. There are players in the space that do not necessarily have this kind of network or engagement. For them, it may make sense to keep people focussed on things that we do not believe matter. For us, the narrative is moving towards ROI as opposed to cookies, keywords, clicks, impressions and so on.”
|Facts to consider|
|APAC is FB’s largest and fastest growing region|
|Mobile is the linchpin to FB’s APAC growth|
|Facebook has over 1.2 billion people; 76% of these access FB on a mobile device|
|A person accessing FB from mobile, is checking the network on average 14 times a day|
|Globally, adults are spending more than five hours a day on digital platforms; this is past traditional TV|
|Mobile internet will surpass television consumption in 2014-15|
|FB’s ad revenues from mobile grew from 23 per cent to 56 per cent in 2013|
Why the ‘connect the world & build a knowledge economy’ spiel works
The role of business is not limited to earning profits. Wise organisations have understood the importance of creating new markets and devising ways of reaching out to untapped audiences. This principle, that is also seen in the sustainability initiatives of corporates such as Unilever, P&G, The Coca-Cola Company and so on, requires investment. Facebook is making a similar investment in its mission of connecting the next five billion – yet another responsibility that comes with being a genre leader. Facebook is not venturing in this alone. Internet.org is a collaborative effort of various such companies that are keen to ‘connect the world’ or who have in some way or another saturated the current connected audiences.
When Mr Neary refers to Facebook’s mission statement that also includes building a knowledge economy as the guiding philosophy behind all of the company’s growth endeavours, it is consistent with Facebook CEO Mark Zuckerberg’s views as quoted on various public platforms. Driven by this, Facebook has identified, and determinedly followed, one clear route of achieving this goal – the mobile way.
“We believe that the connection of the next five billion will be on mobile devices,” states Mr Neary. The statement has a significant impact on Asia Pacific markets, where in countries such as India and Indonesia, that also happen to be Facebook’s second and fourth largest markets globally, sizeable consumer numbers have had their first internet experience on mobile.
A mobile-first, multi-app world
Facebook embarked on the mobile journey at around the time of its IPO. Back then, many questions were raised on the mobile strategies of companies. While everyone knew mobile was coming, no one, Facebook included understood how dramatic and quick the shift would be. “Mark did something transformational at the time and said that Facebook was no longer going to build around desktop and then figure out mobile. We are truly going to be mobile first. It sounds like a small move in our product development but it is gigantic in terms of its impact. In the engineering team, you are not allowed to present on desktop – you have to first present on a mobile device,” divulged Mr Neary.
The strategy also accounted that large audience numbers was still on feature phones. Facebook’s feature phone app crossed 100 million in 2013 and opened a section of audience that was otherwise not reachable by mobile.
While main FB app has over 1.2 billion people, the purpose of Facebook Creative Labs (essentially a brand name to the mindset of pursuing a multi-app strategy) believes that not everything has to belong to the core FB app.
Consequently, Facebook follows a multi-app strategy to engage its audience. The acquisition of Instagram, and more recently WhatsApp, was on these lines. The launch of Facebook messenger and Paper too was part of the multi-app mobile strategy.
Mr Neary concludes by summing up that in Facebook’s engagement with marketers, it makes the big companies small. “Because they get personalisation at scale, that was not possible before. Historically, brands spent a lot of money to find the one person that was interested but that does not move overall business. At the same time, we make the small, big by empowering them with a similar kind of advertising platform as a large company. Our mobile story is not just targeted but also relevant, and done in an interesting way. We feel good that over time, there would be a number of different use cases around our mission on how we connect the world and build a knowledge economy. Some would be more popular than others.”
Five Qs to Dan Neary on challenges facing Facebook
#1 One of the promises of digital was to also decrease media’s dependence of advertising revenue. That does not seem to be the case yet. Do you see other forms of revenue developing in the near future?
There are all different kinds of ways to diversify. We are however very focussed on what we are doing right now which revolves around reach, engagement and monetisation through advertising.
#2 Even though Facebook’s 2013 financial reports had some impressive numbers, international press had much to write about the decline in teen audiences…
Much has been written but a lot is frankly misguided. We define engagement by number of monthly users on Facebook that come back for a daily visit. That number continues to go up. Roughly speaking, 61 per cent of our monthly users come back every day. Teens are amongst our most active and engaged group. A third party research said that of the teenagers online in the US, 94 per cent have an FB account. That is very close to full penetration. We have seen the number stay stable. Another study also suggests that in addition to FB, teens are using many other platforms as well. That is not surprising since they are growing up in a digital age. But one of the other platforms engaging teens is Instagram. In the long term, there would be many different properties and experiences out there. We are attempting to be in as many of them as possible.
#3 China is a large digital market and still a complicated one for players such as yourself? What is Facebook’s China strategy?
We don’t have a site and we continue to think a lot about that. At some point, we will but we are still contemplating the right approach. When we have something, we would be loud and proud about it. The interesting point to notice here though is that China is a manufacturer in the world. One of the big opportunities that comes with, and that is something we are already deeply involved in, is how we can help these companies to access global markets. Facebook is a great way to do it. There are resellers in China helping us in reaching out to those marketers. Our focus is to develop a market strategy is that is beneficial for the government, businesses and our global platforms.
#4 We saw Facebook add Hashtags, trending stories and other such initiatives that are associated with some of your competition. Have we seen you take some pages from the likes of Twitter?
We are taking nomenclatures that work in the digital space. There is nothing more to it than that.
#5 If you had to pick the biggest challenge that you are faced with at present, what would it be?
We would have several ones but education is the biggest. Businesses are run by people. They understand Facebook from how to connect but not necessarily how to work with it from a business perspective. We are trying to build the infrastructure around Asia that can educate people from the business viewpoint.