In the final discussion of our Facebook ecosystem CrunchUp today, AKQA Chairman Tom Bedecarre and Facebook VP Greg Badros took the stage to address Facebook’s advertising strategy. Bedecarré wasn’t as skeptical as his new boss Martin Sorrell (whose advertising conglomerate WPP just announced that it’s acquiring agency AKQA, and who has said that Facebook is “not necessarily an advertising medium“), but he made it sound like the company has a lot of work to do to win over advertisers.
The numbers tell part of the story. Bedecarre (who’s the middle figure in the photo) said that WPP is upping its spend on Facebook ads this year from $200 million to $400 million — that’s nice progress, but less than 1 percent of its total $65 billion in spending.
To a certain extent, Bedecarre said that’s because brands are “addicted to television advertising”. They’re used to TV ads, and even when they move online, it’s easier for them to advertise somewhere similar, like YouTube. In a way, he says the ad that users see when they log out of Facebook is a “hook” to bring advertisers into the world of Facebook advertising — the big display ad is something they can understand, then perhaps they can be convinced to try more experimental ad units like Facebook’s Sponsored Stories.
When asked about what Facebook could be doing better, Bedecarre said advertisers want more data, and more ways to act on that data. That includes more ways to spur “demand and activation”, and using Facebook data to target ads outside the Facebook site. He said that advertisers have a hard time dealing with how quickly Facebook’s ad platform changes. And while he said that Facebook Pages offer a lot of creative opportunities, on the other hand, he finds advertising in the right-hand column “very restrictive” creatively, so it’d be nice to have a little more “elbow room”.
For his part, Badros (who’s on the right side of the photo) wasn’t asked to address most of those criticism and suggestions directly, but he did offer some of the Facebook perspective on advertising, including the Sponsored Stories that users see in the newsfeed. TechCrunch’s Josh Constine asked if there’s a specific ratio of sponsored to unsponsored stories that Facebook has in mind, but Badros said it changes from user to user. He also repeated a common talking point about ads on both Facebook and Twitter — that one of the best things about the sponsored content those sites is the fact it originates as “organic content”.
And even though much of the discussion about Facebook’s business model centers on advertising, Badros said it doesn’t make sense to “only have one horse in your stable,” so the company is also “exploring lots of different ways to help drive value in the world and help drive our business.”
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...