$43.6B U.S. agency revenue
Even as more ad tech and digital media vendors try to circumvent agencies and go directly to brands, Facebook is assembling a global team and structure dedicated to the task of growing its revenue from agencies. And if the recent deal between Omnicom and Facebook's Instagram is any indication, the company is getting at least some traction.
Facebook recently doubled its global agency development team to 20 people, boosted its local agency partner group to 100 staffers in local markets from 30, and added 5 new agency leads to its Client Council, said Patrick Harris, director of global agency development at Facebook. The new Client Council members are all important media agency executives, including Daryl Simm (Omnicom Media Group), Laura Desmond (Publicis Groupe's Starcom MediaVest Group), Steve King (Publicis Groupe's ZenithOptimedia), Matt Seiler (IPG Mediabrands) and Dominique Delport (Havas Media, in David Jones' old spot).
Ad Age talked with Mr. Harris about the state of Facebook's agency push.
Advertising Age: What's the biggest change for Facebook's agency team this year?
Patrick Harris: This time last year we had no presence in Asia Pacific or Latin America. I spent a lot of time hiring great folks. Another big investment last year was growing our local market sales teams. We created agency partner functions that sit at the local-market level. We have almost 100.
Ad Age: Will you be offering up more user data as you expand agency partnerships?
Mr. Harris: We want to make sure Facebook data is more accessible to help during the strategic planning process ... and expose this kind of data so people can have a comparison against TV. It's simple things like being able to take data we see from reach and frequency in places like mobile and integrate it into the planning tools TV buyers are using. We haven't installed it with anyone yet but it's a new priority.
Another program that's less defined today and we're developing is insights that help the agencies understand what the consumer is doing. For example, what are the high affinities for a tired soccer mom? Does she buy two more frozen pizzas a month versus another category of women? We've not been great there.
Ad Age: Agency complaints about Facebook going directly to brands aren't going away. How are you responding to those complaints?
Mr. Harris: We need agency partners to scale our business. There are instances where large direct clients want to have a unique relationship with Facebook because the relationships aren't always about just trading advertising media, like Samsung -- we need to have direct relationships with those companies. There are certain clients we work with that don't use agencies at all, like a lot of the gaming clients, Amazon and eBay.
But for top brand advertisers and the majority of the global sales organization, most of the media is actually executed through agencies.
Do I think we are going to discontinue having direct conversations with clients? No. What works the best is when we have clients, agency and Facebook teams sitting together.
Ad Age: Should we expect to see more agency partnerships like what we saw with Instagram and Omnicom?
Mr. Harris: It's the first time Facebook Inc. has partnered with agency partners to bring new products to market. We're going to shift ultimately and have better user experiences in that environment as a result.
Ad Age: But that's not the case with Facebook's video-ad rollout?
Mr. Harris: We're doing more of a focused release this year, so it's not about doing the big commercial deal to start. We've had so many stops and starts with this product. It's really about getting it right and shipping a great product with great user experience and creative behind it.
Ad Age: What complaints are agencies coming to you with?
Mr. Harris: There were too many ad products. A year ago we were in a much tougher place, and I think our ads overview guide was like 37 pages. Now it's 10. There was a huge focus internally to really simplify our ads product narrative ... Like, do you want to drive direct response, in-store sales, online sales or drive mobile app installs? What are you doing about organic reach complaint?
Ad Age: What are you doing to address complaints like organic reach?
Mr. Harris: It's becoming harder and harder to cut through the clutter without really quality content. So it continues to be a short-term pain point on marketers' and agencies' minds.
Ad Age: What's Facebook planning for the future of its agency relationships?
Mr. Harris: There's an incremental increase in headcount in the budget for 2014 for the U.S. and Latin America, the two largest investment areas. Within those two, we've added [over 20 heads] this year.
Ad Age: How do the requests abroad differ from agency requests in the U.S. as you expand the global team?
Mr. Harris: There are different phases in maturity in global regions. If you rewind two years ago, here everyone wanted to talk about social metrics, sharing and fans. It's still a hugely important component but we transitioned from social metrics to business metrics.
In other markets around world...there's [still] legacy thinking around Facebook being a social vehicle and not impacting real business results.