How the digital giant's worldwide march affects brands, agencies, and vendors.
Several thousands of miles from Menlo Park, CA, the home of Facebook, marketing staffers for the tech company regularly sit in Ogilvy & Mather's Singapore and Hong Kong offices.
According to Thomas Crampton, Asia Pacific Director for Ogilvy & Mather's Social@Ogilvy division, a desk in each location is tucked into the ad agency, simply marked by a "facebook" logo on the door and a thumbs-up "like" sticker nearby. The platform-in-residence arrangement has been in place for months, he said. It's a microcosm of Facebook's burgeoning impact on the global advertising ecosystem, from agencies to brands to vendors.
"When I say it's a 'Facebook desk,' it's literally a Facebook desk," said Crampton. "It's gotten to the point where it has to be a part of our everyday work. We finally decided, 'Why don't we formalize [the relationship]?' It's about communication. It helps us understand Facebook, and it helps Facebook understand us."
Asia Pacific's 212 million Facebook users drive the partnership, he said. Though that number only represents a sliver of the region's population, suggesting a huge growth potential in terms of eyeballs.
"Advertising on Facebook in Asia is growing and is going to keep growing," Crampton said. "I would argue that Facebook ads are at a bargain price right now. The amount of advertising on Facebook and the cost of advertising on Facebook will only grow in the coming year."
Sales Exec Muscle Leverages User Growth
Facebook, which is expected to IPO next month, obviously has Asia in its sights. CEO Mark Zuckerberg visited Japan and China last week, stating on his trip that Facebook's Japanese users doubled during the last six months. While his firm is the leading social network in India and the Philippines, it trails regional competitor Mixi in Japan and is banned in China. On Tuesday, Facebook added eight Indian languages for mobile. Future user growth in the region will mean ad sales for Zuckerberg and his shareholders. But at the same time, the company's aims appear borderless.
It has 845 million monthly users worldwide, which equated to $3.2 billion in 2011 ad sales. Research firm eMarketer forecasts Facebook ad sales this year will reach $5 billion. The last two years have entailed a rapid climb for the company, expanding internationally while introducing socially minded ad products like Sponsored Stories and news feed distribution for branded promos.
During May 2010, Nike became the first brand to run a global Facebook campaign. Nine months later, Facebook COO Sheryl Sandberg, a former Google exec, poached Carolyn Everson away from Microsoft to run global ad sales. The move pointed to Google-sized monetization goals. At Cannes in June 2011, Everson chatted with ClickZ about how the festival was a place to "get a lot done" because it brimmed with global marketers. During the weeks prior to her visit there, Facebook opened an ad sales office in Brazil.
In the last year, Everson and team members like Sarah Personette, Global Agency Relations lead, have been in pitch mode, consistently referencing the idea of Facebook "underpinning" integrated worldwide campaigns. After one event at JWT's midtown Manhattan headquarters last summer, Everson said, "The real trick is organizing globally but being locally relevant."
Social Sells Pizza in 10 Languages
Domino's Pizza, Levi's, and Starbucks are examples of brands taking Everson's words to heart, launching global Facebook advertising efforts in the last year. Four months ago, a Domino's one-day campaign ran in 19 international markets and the U.S., pitching half-price pizzas in 10 languages.
Dennis Maloney, Domino's VP of digital marketing, told ClickZ that Facebook helped convert 542,000 e-commerce orders during his brand's Dec. 8 event. Dubbed "Global Domino's Day," Maloney said the campaign used 20 country-specific Facebook pages.
"It was the first time we activated a single promotion worldwide," he said. "We actually think it's the first time any [quick-serve restaurant] company has been able to do that, which is really exciting…It got great participation around the world."
While 50 percent of Domino's stores are in the U.S., Maloney said his Facebook campaign saw terrific sales results in Korea, Israel, the U.K., and Canada. The social platform has evolved into a worldwide digital broadcast center for brands, he said.
"Facebook has become a single point and language that translates almost across the entire globe," Maloney said. "That opens up the door to promotions like this."
Peter Kornberg, a VP of digital at Global Advertising Strategies, suggested that Facebook's ascent will only get more brands like Domino's ramping up social media spends. His remarks jibe with ClickZ's recent agency study, which found some social media budgets had doubled in early 2012.
"With the Facebook Timeline launch especially, brand history became so transparent, that it forces advertisers to be more conscious of every effort," Kornberg said. "More money would have to be dedicated to keeping the brand consistent and focused - regardless of whether that comes from the company's media buying budget or somewhere else."
Vendors Globe Trot Toward New Money
In February 2008, Facebook added Spanish and French as the second and third available languages on its platform. Now, Facebook ads are displayed in numerous languages, as the platform gradually builds scale in places like South America, Eastern Europe, and the Middle East. It's recently overtaken Google's Orkut as the most popular social site in the digital advertising hotbed of Brazil. Trying to keep pace with where the new money is, North American social marketing vendors like Buddy Media, Syncapse, Offerpop, Wildfire, SocialTwist, Context Optional, Friend2Friend, and Vitrue are thinking more internationally about their businesses.
"It's been a trend that we've seen," said Michael Scissons, CEO of Toronto-based Syncapse. "I've been everywhere from Tokyo to Egypt to Russia in the last year alone, and probably 10 other countries as well."
Wendell Lansford, Offerpop CEO, said companies from around the world are logging onto his self-service social marketing platform, mostly due to Facebook. "Half of our visits are from businesses abroad," he explained. "It's purely organic...We are not paying for those leads."
Friend2Friend says its international Facebook effort for Universal Pictures' "Lorax" in November 2011 was a success, involving Russia, Spain, Brazil, U.K., Germany, Italy and Latin America. Compared to other platforms, Friend2Friend CEO Roger Katz said, the Facebook user experience is universal, enabling cohesive message across cultures. "Facebook users do the same things around the globe," he said. "They are in the same environment, exhibiting the same behaviors."
While Facebook's worldwide growth may currently be a godsend to social marketing vendors, it's also true that they'll likely be tied to the digital giant during the foreseeable future, for better or for worse. Just like Facebook disrupted MySpace, a future competitor could upset Zuckerberg's kingdom.
Rebecca Lieb, digital advertising analyst for Altimeter, recently commented on the plight, stating the "enormous ecosystem of companies in the 'Facebook economy' [like] agencies, technology providers, and API-dependent plays such as Zynga, indicate that more than Facebook is threatened if Facebook were to fail."
Social@Ogilvy Director: Facebook's A Mass Medium
If Facebook fails, it may be the Titanic of dot-com busts from a 15-year era of many sunken ships. Crampton from Social@Ogilvy said more Hong Kong residents use Facebook, per capita, than Americans. Meanwhile, Ogilvy and Facebook huddle about apps, contests, video, etc., brainstorming about how brands can engage with consumers in locales like Hong Kong, Mumbai, and Jakarta.
"For Indonesia, the Internet population is almost perfectly mirrored by the Facebook population," Crampton said. "So if you're in Indonesia and on the Internet, you're on Facebook. It's become in many countries literally a mass medium, and that's something people working in marketing are still coming to terms with."
Adaline Lau contributed.
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Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.
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Wednesday, July 23, 2014