Buying likes is not a valid business model: Kirthiga Reddy, FB India head
Shelley Singh & Chaitali Chakravarty, ET Bureau Feb 4, 2014, 09.42AM IST
('Fans are important, but…)
The world's biggest social media platform Facebook has its second
largest user base, after the US, in India and it's growing fast. At 93
million users as of December 2013, it's a huge leap since Facebook set
up operations in India in 2010, when it had only eight million users.
Back then Kirthiga Reddy, 42, joined as head of Facebook India. Reddy,
the first employee of Facebook India. Now faces the daunting task of
monetising the platform. The user base is galloping but are the
advertisers buying it?
In an exclusive interview with ET
Reddy, says she would like advertisers, marketers and brand managers
leverage the power of the platform with targetted messages and campaigns
and reach out to the expanding user base. Edited excerpts:
How much time do Indians spend on Facebook?
ComScore - an American internet analytics company - has done studies
with us which show that on the internet, people spend most time on
Facebook than on Google, YouTube, MSN, Yahoo or any other internet
property. In terms of activity pattern, students and homemakers are most
active. In general, we see peak use in the late evening just like prime
time (TV) hours.
Now there is a medium on mobile to reach people
all the time. From a brand and consumer perspective it's about being
able to reach your consumer all day, every day. Brands don't have to
wait for prime time to reach their audience.
Facebook is
personal space where users may not want to be intruded by ads and brand
messages. How do you cope with the challenge of connecting people
without being intrusive?
There are millions of friend
requests and interactions every single day. There are also millions of
brand interactions every single day. People are sharing with friends
their choice of restaurants, cameras they use, movies they see and so
on. These are as much part of their lives as their friends. The beauty
of the platform is it lets you deliver messages to a targeted audience.
If I am not interested in sports, the advertiser will not deliver that
message to me. It is a wasted impression. Our technology ensures if I am
cancelling out a particular message, the system knows not to show it
again. That's key part of our engagement — to give the user only
relevant content. Zuck (Facebook co-founder & CEO Mark Zuckerberg)
spoke about this in his last earnings call. We constantly monitor what
happens to user experience and we see user engagement increase with the
right content.
How does Zuck see India?
He sees India as a strategic market. India is important from a user base
perspective, the growth that we have, the kind of numbers that we have.
Second we have core operations offices in India, that is what India
does for Facebook globally. Third, from monetisation perspective, India
is a large market. It is a lead for emerging markets monetisation. We
constantly ask what is it that we can learn from India and implement in
other emerging markets.
Last month, the emerging markets ad products team came visiting. They
met with clients, agency partners, did focus groups, consumer groups, to
understand how Indian consumer interacts with brands. Those are some of
the pillars that we look at in India.
How many brands advertise on Facebook in India?
There are over a million advertisers on Facebook globally, a very
significant milestone for us to reach. We don't share country-specific
numbers. But I can see different genres of advertisers coming. To give
you some examples, Coca-Cola India did significant launches with us last
year. Yepme is an example of an online fashion retailer, that used
Facebook with 4.5 times returns on ad-sales dollars. Small businesses
like Pigtales and Ponys - two college students in Bangalore started this
hair accessories company — leveraged Facebook and it became a business
on its own.
There are large brands, direct response (DR)
advertisers, home businesses, the small and medium businesses and
developers that we enable. We have a strong product solutions portfolio
to drive mobile apps.
The FMCG companies, mobile
companies and several others are clued into what Facebook offers, but
what about the back end companies like Reliance, L&T etc?
There are several shifts that we are looking to make. FMCG companies
see us as a social media company and there's lot of work going in terms
of fans, fan engagements etc. They think of us as social media. But
given the kind of numbers that we have they must think of us as mass
media in order to leverage the power of the platform. That's the trend
that I see, that's the shift that I see, that's the kind of conversation
I have with CEO, CMOs.
How competitive is Facebook vis-a-vis other media?
We don't share numbers but every situation is different based on what
the media campaign is, what the brands want to do on Facebook. We are
conscious that every dollar they spend on Facebook is a dollar they can
spend on any other medium. We are effective and efficient for our
ability to do targeted ads. For example, when Samsung did its Note 3
launch last quarter, they used a different creative for men and women on
Facebook. Brands can't do this on television or on print. Another
example is the launch of Nokia 205. Using Facebook, the company targeted
only the feature phone users with a customised message because they
were most likely to upgrade to the new model.
Its the ability of the platform to drive a message in a particular way
with zero spillage that drives return on investment (RoI). We are
results focused. We ask brands what are your biggest brand and business
objectives? We are measured on this and what we deliver fuels the next
stage of growth.
What do companies seek from Facebook?
Firt thing that companies want to know is how to use the platform. They
want to be educated. Lot of companies have been using Facebook for fan
engagement and that is valuable in itself. We have studies that show
fans buy 1.9 times more than non-fans, however, fans are small
percentage of the target audience.
If the strategy is to target
fans, then companies are really missing the point of being on Facebook.
For me conversations like these are a way to help clients. We work with
clients and do sessions with marketing teams and ad agencies on how best
to use the platform. There are many CEOs and CMOs who tell me, "Oh you
have 93 million users. We didn't know that. We must do something
together....,''
Often, CEOs, CMOs heads of marketing tell me they
have reached 5 million fans. Fans are important, but I hope they tell
me the next time that Facebook is an integral part in driving market
penetration, new branding etc. That is the shift in conversations we are
looking at. It's a trend in the making.
Is Facebook a must buy for media planners?
The trend that we see is that it will be a must buy. There are
advertisers, brands and marketers today for whom it is a must buy. But
is it a universal truth at this point? No, but that's the trend that we
see. They will buy where the consumer is, where mobile is.
Companies can buy 'likes'. And there are fake likes as well. But that can be misleading for users. Does Facebook encourage it?
Buying likes is not a valid business model, we are a real identity
platform. We have a whole team making sure we keep that trust. We
certainly don't allow or encourage that.
Though brands do invest
in building their fan community — which happens in both paid and organic
way. It's about your like, nobody is automatically liking anything.
It's all within the users control, with complete ability to unlike a
page.
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