After registering its millionth user in the U.K. last month, social networking site LinkedIn is now set to open an office there. And Facebook recently announced the appointment of Blake Chandlee to head up its own new operation in London. The expansions signal a recognition on the part of U.S.-based social networking firms of the ad potential in the U.K. market.
"The U.K. is our largest market outside the U.S., so it makes sense for us to pursue this business more proactively than in the past," Liz O'Donnell, International Director for LinkedIn, told ClickZ. "Furthermore, the recruitment and advertising businesses, which comprise the majority of our revenue today, are both quite strong in the U.K." she added.
According to O'Donell, LinkedIn will look to attract high-end brands that fit with its current demographic of successful professionals. Premium U.K. brands already advertising on the site include Apple, Orange and KPMG, and The Royal & Ancient Golf Club at St. Andrews also used it to advertise the British Open earlier this year.
Though a location for the office is yet to be confirmed, it will open early next year with a core team of five to eight staff. Services offered to U.K. clients will be identical to those offered in the States.
Speaking at the IAB Engage conference in London two weeks ago, Facebook COO Owen Van Natta also recognized the potential of social networks in the U.K. He described the British user base as Facebook's third largest globally, and pointed out that the London network is now the largest city network worldwide.
Although Facebook refused to disclose any details of their U.K. operations, Van Natta implied that the operation would be geared largely towards ad sales, stating; "we're building an office here rapidly to make sure we're serving marketers and advertisers locally." A priority on advertising is also reflected on the Facebook job board, which is currently advertising for U.K.-based sales planners and media delivery coordinators.
Dealing with the U.K. social networking market comes with its hazards however. Facebook found itself in hot water earlier this year when Vodafone found its ads being served on a page associated with the British National Party (BNP). The global phone operator stated at the time that they did not expect their advertisements to appear alongside any political parties, and withdrew their ads from the network as a result. The incident prompted a number of other advertisers to follow suit, and Facebook eventually offered the option to opt out of ads appearing next to groups.
In addition, U.K. based international bank HSBC felt the wrath of the Facebook masses in August when it was forced to drop its plans to charge students for overdraft facilities. A group set up by the National Union of Students (NUS) titled "Stop the Great HSBC Graduate Rip-off" amassed over 4,000 members in a matter of weeks, eventually forcing the bank to backtrack.
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Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.