Facebook revs up a new money machine to tackle emerging markets

30 Oct 2015 | Author: | No comments yet »

Facebook To Bring The Next Billion People Online (And Help Marketers Reach Them, Too).

Facebook on Thursday rolled out “Slideshow” ads — essentially a series of still images — that can more easily be viewed than traditional video ads on slow Internet connections and cheaper mobile devices common in emerging markets. But what happens when the users are in countries like India, Nigeria and the Phillippines, where video hogs expensive bandwidth that few people can afford? Now the world’s most popular social network is looking to capture the attention and wallets of the next billion people coming online. “We’re pretty close to a world where most people have Internet access,” Facebook’s chief product officer Chris Cox said at a press conference at the company’s Menlo Park, Calif., headquarters. “The people we’re building for look less and less like us.” Advertisers can upload three to seven photos and Facebook creates a slideshow of up to 15 seconds. Overseas expansion has proven to be a huge driver of growth for Facebook: the company now makes more than half of its advertising revenue from outside the United States.

But in a way, it was also a sign that the company was reaching the end of the phase of its history that was mostly about signing up people in developed economies and getting them to spend time on the service. To do that, it has increasingly become mindful of connectivity speeds and modifying its tools to make sure that it can reach the next set of users slowly coming online. But as more people, and businesses as well, begin to jump online, Facebook has unveiled a new advertising option called Slideshow for brands to reach these new users no matter the device, connection, and where they are. For big brands, like beta testers Coca-Cola and Netflix, Slideshow offers a way to reach everyone in the world regardless of how they connect to Facebook with a single style of creative.

The race is on among Internet giants to reach every single person on the planet, parachuting into market after emerging market where people have spotty, if any, access to the Internet. The ads make use of Facebook’s ability to read what connection speed a user tends to log in to the site from most and adjusts the type of ads it serves accordingly.

Instead of using the term “last name” in signup screens, for instance, it now uses the more universal “family name.” Things that Facebook has assumed everyone knows, it’s now reassessing. “A word like ‘password’ is not a word that can be taken for granted,” Cox said. One of the major tenets that Facebook sought to emphasize is that it’s thinking about how to help brands and consumers better connect with each other.

People may know they want Facebook, Instagram, and WhatsApp, but not understand the basics of creating an account. “We need to help them get started, rather than [say] ‘Hey, you’re a sophisticated American college student, set up your profile.'” The company is also reacting to the fact that people in different countries use Facebook in different ways. The Internet giants benefit when more people are online, whether checking status updates or searching the Web, sending a message to friends or streaming a YouTube video. Earlier this year, Facebook launched its Creative Accelerator program to help big brands better understand the technical and cultural considerations of advertising to emerging markets. A new technology called Network Connection Class lets Facebook build a News Feed designed to identify and accommodate the speed of the network it finds.

Merchants can easily shoot the photos themselves or even use stock images from Facebook’s Shutterstock library, whereas producing and editing a whole video would cost too much. The ad unit is now available through all of Facebook’s global ad buying interfaces, and it eventually hopes to make it available on Instagram as well. This week Facebook started “2G Tuesdays,” when employees are asked to spend part of the day working on the kind of low-bandwidth connections typical in the developing world. As a reminder, an internal program called 2G Tuesdays prompts employees with an option that lets them simulate a creaky 2G connection for an hour—a strange experience in Menlo Park in 2015, but perfectly normal for millions of people who the company would like to feel at home in its service. Srinivasan said that small and medium-sized businesses need “an easier, cost-effective way to create video assets,” and this is what Slideshow aims to provide.

According to Facebook, early testing demonstrated that a 15-second Slideshow results in a file size one-fifth the size of a video of the same length, which makes it more accessible for those on 2G or 3G connections. Even though emerging countries operate under technological constraints, MacLean said, marketers should know that they can outpace established markets when it comes to embracing innovation. Connecting brands with these users is the goal of Facebook’s Creative Accelerator, where by “Partnering with some of the world’s top brands and agencies, we proved that beautiful creative drives real results in emerging and high-growth countries.” Facebook today highlighted its work with 7 brands through 6 agencies in 5 countries. The program originally launched in February. [Correction: The program did not launch today, but we’re getting new details.] For example, Coke used Facebook ad targeting to create campaigns just for Kenya, and used “expat targeting” to reach Kenyans abroad. Called “Slideshow,” it allows for rotating sequences of between three and seven still images, designed to provide the ability to tell a story with some visual pizzazz without clogging networks.

The new developing world-focused ad initiatives increase criticism about Facebook building Internet.org just to score new users, rather than as a philanthropic effort. Facebook’s efforts in emerging economies—from its Free Basics app to the drones it’s developing to shoot Internet connectivity down by laser—are not without their controversies.

Also, when dealing with retail fragmentation, it’s difficult to track who’s coming in your store because people are paying with cash and there’s no CRM system in place. Bringing another billion people onto the Internet will be good for those individuals and the world in general—and new offerings such as Slideshows are meant to ensure that it’s also good for Facebook’s bottom line. Without the resources to shoot expensive video ads or contract agencies to target their promotions, business ownners in Facebook’s emerging markets can still produce high-quality campaigns.

Tom Alison, Facebook’s engineering director of emerging markets, said that 240 million people have shifted their usage patterns to mobile, and the company has focused on delivering a product across different environments to address these shifts. He showed a map of the world highlighting usage of Facebook, and it revealed that most of the world is using the social network on 2G and 3G intermittent connections.

More than just talking the talk about emerging markets, Facebook said that it’s walking the walk: The company gives employees a chance to see what running on a 2G data connection is like every Tuesday.

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