Questions for Facebook VP of Media Sales Mike Murphy

Everybody loves Facebook.

While MySpace continues to dominate the social networking space with approximately 79 percent of visits to such sites in April, according to Hitwise, Facebook excels at capturing the favor of new social utilitarians and the imagination of pundits and bloggers.

Hitwise reported the site’s traffic has doubled since it opened its once student-only audience to just about anyone last fall, and hit 31 million active users last week, according to Facebook. Additionally, it won accolades this year for innovating and generally protecting its consumers to a greater degree than its News Corp.-owned social networking rival.

A big part of its cred in Silicon Valley, if not yet on Madison Avenue, comes from the company’s open platform strategy. Rather than restrict what outside developers can produce for its audience, the company has liberally dispersed programmer keys to its platform, letting pretty much anyone build applications for its system. Many have, among them a growing number of brands.

But surely it’s not all about the widgets. What about old fashioned reach and targeting options? What about deeper integrations with the audience? This week ClickZ caught up with Mike Murphy, VP of Media for Facebook, to ask about these and other matters.

Q. Give me a rundown of the ad types Facebook offers and the ways it will work with marketers as of right now.

A. On our site we have IAB standard ad units, and that’s what Microsoft sells as our channel partner. What my team focuses on are any integration opportunities or what we call sponsored stories. Those are stories sponsors insert into users’ news feed, which is the news ticker of what’s going on in their friend community. It enables the marketer to become part of the conversation.

What our system creates are referrals then, based on connections a marketer makes with the user. If we put a story or a marketer into your news feed and you click on it, our system creates viral impressions on our site. Those become trusted referrals out on our network, which then benefit the marketers.

We also sell a “next step” link. We use those for commercial relations as well to drive users to sponsored content on our site, which we call sponsored groups. Either a sponsored group or an application is where the connection is made between the marketers and users.

Q. And how do you sell in-feed links?

A. Our current model is on a CPM basis for insertion into the news feed.

Q. News Corp. recently acquired Strategic Data Corp. with plans to use it to slice and dice MySpace profile data and optimize ad targeting. What’s Facebook planning around different types of targeting?

A. I can’t talk much to you about what we’re planning to do, but I can talk about what we’re doing now. There’s a big difference between what we collect and what other social media sites collect. We’re a very templated environment. Like activities and interest fall together.

It creates a pretty robust data set for us. We can target based on that data. Keyword targeting for us, because of the nature of the site, is something we do very naturally.

Our users are updating their profile on average every 48 hours. While most sites rely on either demographic targeting or behavioral targeting, in our case our users are giving us those 200 words that are most meaningful to them every day, we’re targeting against that.

Q. How about geotargeting?

A. One of the big differentiations for Facebook is that instead of being one vast network, we’re more than 50,000 social networks. It’s very easy for us to localize down to a city.

Q. How much of your inventory is targeted either by geography or keyword?

A. Probably roughly even percents. Somewhere in the 40 to 60 percent range of the campaigns that are running are being targeted. Our audience at its core is an 18- to 34-year-old audience. Even as a mass reach play, it’s still really targeted. There are marketers that are out there that are looking to reach females in California that are 18 to 34. We have the ability to do that.

A fair share of the impressions we serve in sponsorships and “next step” links are served that way.

Q. Are you trafficking many ads through ad networks?

A. We do not use any other third party relationships. Only my team sells the sponsored story and “next step links,” and there’s no remnant inventory there at all. It’s a direct sale.

Q. And are you having any trouble scaling your ad sales to match the sheer growth on the network?

A. The challenge isn’t as much scaling our model along with growth as it is scaling our model along with the education in the market that’s happened over the past year. The conversation has shifted dramatically from why social media and why Facebook to how social media and how Facebook. That’s a huge difference.

Q. Have many marketers been developing applications or widgets under the new open platform strategy? How are you guiding marketers to build for it?

A. There are a few examples. The real one that came out in launch was Red Bull, which created Roshambull, a Rock Paper Scissors-like game. The developers were very pleased with the amount of brand exposure it came along with.

A brand by itself doesn’t necessarily equate to community. The real important message that brands have to consider when they build applications is that those applications have to bring some utility to the user’s social experience on Facebook.

Q. Describe a day in the life of Mike Murphy.

A. Things are changing all the time. Innovation is extremely valued in a company like this, and I’m one of the oldest people in the company. It’s very invigorating to be around such an iterative company.

It’s different every day. Then I go home to my other job of being dad to four young boys.

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