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March 12, 2013

Keynote Conversation: Grady Burnett, Facebook

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Good morning from San Jose! Today we get our keynote, and here’s SMX’s description:

“The developments keep coming fast-and-furious from Facebook, which last year tipped over the 1 billion user mark. In this keynote conversation, Grady Burnett, Vice President of Global Marketing Solutions for Facebook, will talk with Search Engine Land founding editor Danny Sullivan about topics ranging from the recently launched Facebook Exchange to the even more recently announced Facebook Graph Search beta.”

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Danny Sullivan: Facebook used to have little ads on the side, but that’s come a long way.

Grady Burnett: Last year we focused on various stages of the marketing funnel. We’ve done great work at the height of the funnel. Down the funnel we’ve seen success down the funnel for gaming and developers. DR, developers and local advertisers are verticals FB ads have worked successfully for. FBX and gives the ability to remarket, deliver a relevant message. The same is true with custom audiences, driving better return out of relevant ads.

If you think of Promoted Posts, that’s looking at the world of local businesses. Local bizes wanted to know how to find more people like the audience they have, and Promoted Posts gave the ability to extend reach of campaigns in a way that just built off the activity they were already doing on FB.

Standard ads have performed well traditionally. FBX drives it more down the funnel – using it to enhance what they’ve done. If you’ve found new customers on FB, FBX lets them reach someone who’s expressed intent. Custom audiences, again, let’s you segment people who haven’t bought in the last 6 months, or bought this but not that, deliver tailored ads, and results have gone significantly higher.

DS: New ad types this year?

GB: We’re always looking to increase our work with custom audiences and FBX across the board. Link Posts worked well but they weren’t as simple to use and scale as they could have so we’ve worked with businesses to

Goals: Work at the bottom of the funnel to drive better conversion and simpler to use, and at the top end better awareness and reach and multi-touch attribution.

We’ve seen advertisers focus the last 12 years on last-click attribution. The industry has evolved, and tools like Atlas and Aggregate Knowledge are helping us see what’s happening across the whole playing field. Looking at the last click is only looking at shots on goal and not the whole teams actions in a play.

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DS: When do we get FacebookSense? Ads and retargeting are happening on FB, so why not take them outside Facebook?

GB: We’ve seen so much growth and engagement on FB. There’s a lot of growth to happen on the platform itself. We’ve been zeroed in on increasing value for marketers through the conversion funnel on FB. It’s always a series of tradeoffs.

DS: Mobile product has turned to a local biz focus, and how has that changed?

GB: 15 mill bizes have a page on FB today and 8 mill are using an app to manage that (vs. at their desk). Local bizes are active and are increasingly being discovered using tools like Nearby. Local is an important part of the graph, it’s an important part of people’s lives.

DS: When you went public there was atention on mobile being weak? Has that all reversed now? Zuckerberg in Jan. said FB is a mobile company, but still 25% of revenue is coming from mobile.

GB: There’s a lot of scrutiny around mobile. Mobile use on FB has always been high. We had a few engineers on our team that were able to code for mobile and a ton that could could for desktop, so they had to compeltely flip that ratio and hire a whole lot of mobile developers. This time last year the monetization on mobile was 0. In one year it’s grown to 23%. We’ve always focused on users first, and we feel if we can find that match that we’ll make progress and revenue will follow.

Social context (Danny Sullivan likes this), Sponsored Stories (an advertiser’s message with a friend’s message on top of that), it’s a continuum of relevant advertising, and the only way they could have shown ads in the News Feed since it’s high relevance.

DS: The new News Feed, what’s the reception been like?

GB: It’s out to a very small % of users, launched last week. They eliminated clutter that has creeped into the News Feed. They increased image size and find higher engagement with larger sizes. It’s a visual redesign, no change in terms of the algorithm and what content is displayed. The ad experience on mobile has a big image and increases the chance to engage. The new News Feed considers the mobile mindset.

DS: There has been some recent complaints from high profile FB users that engagement has gone down, like George Takai.

GB: There have been no changes that has been to the goal of driving purchase of ads. All changes about content delivery have been toward increasing relevance. There’s a chance that some of these popular profiles may have gotten fans early on that aren’t as well targeted, and so they aren’t showing up for them.

DS: Stats for SEL and Marketing Land shows steady rise til about September, and then a drop, and then climbing again, now to about where it was. For search marketers we might call that an update, like a Penguin or Panda. I looked at that and said wow, News Feed is your own kind of search engine, you make these changes all the time. Will we get to the point where FB will say Attention FB shoppers, you’ll see we’ve made tweaks and you’ll see changes.

GB: It may come to the point that we’ll need to do a better job of communicating. We saw 20% reduction in people hiding things and spamming when we rolled out a bunch of changes in the fall. Just like a search engine there are a lot of changes happening at all times and it doesn’t make sense to announce them all but we may look to be more communicative in the future.

DS: Graph Search launched. Progress report?

GB: It’s rolling out very slowly and it might even be single digits. In the next session you’ll get more detail. People, photos and pages are there 3 content units with highest engagement, in that order and what is discoverable through Graph Search. From a marketing perspective, the best thing to do is think about the page. People are using it to discover pages. Think about hours, types of services, how people share.

The focus will remain in the FB ecosystem, what people share, what photos they share. 23% of time people spend on their phones are on FB. That’s big opportunity, and if they can help users discover things they care about, restaurants, people, places, that’s where we’re focused.

DS: Do you ever see FB doing something like buying Bing, having its own search product?

GB: We were very conscious in calling it Graph Search. We want people able to find things in the ecosystem. He hasn’t thought much about something like a purchase of Bing.

DS: Google+ an interesting product?

GB: The world has always been a social place and as a result all products should have a social element. Every business is going to be social. Google taking steps in that direction is good for the industry and people in general. I care about people interacting and sharing and if that’s enabled in more products, that’s positive.

DS: Privacy issues and do not track pushes, how does Facebook get that balance right?

GB: We wanted to create an opportunity for marketers to target ads with more relevance based on data available to them. We think of privacy in everything we do. We’ve given users control to X out ads, report it’s not relevant or offensive and that’s an important signal for us. We’ve also tried to make it clear in each post who you’re sharing it with, and that control on each individual message, in line, in powerful.

DS: Do you see an option where people can give you a flat fee in a year and have an ad-free experience?

GB: We have a terrific ability to deliver advertising that is as meaningful to you as your friends’ posts, so I don’t see that for us.

DS: How do you make money with Instagram?

GB: They run independently, and they’ve always had plans to build advertising into their model, it’s a choice of how you do that and when. There’s no plans for ads now, focused on user growth. We’ll integrate where it makes sense over time.

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Q&A

Q: Will FB Graph Search replace Bing?

GB: He sees Graph Search replacing FB search. The relationship with Bing is good now and he doesn’t see that changing.

Q: What’s the performance of ads on mobile, ad load impact? Multi-touch attribution across devices?

GB: No noticeable change in engagement on mobile ads. The pricing on mobile has been good, and we think there have been efficient cost and conversion.

Q: Is there a way to get support when we’re spending more than $100k a month and hitting the $5k a day max?

GB: He wants to provide great service and support for advertiser, whether a small business up to the largest marketers in the world. It’s useful to hear about your experience and understand that trail. I run those teams so I’d like to understand why that wasn’t the goal. Room for improvement, but that’d never be a stated goal, that you haven’t done X or Y you don’t get this experience.

Quick reactions from Grady based on the following words:

Twitter: I don’t use it
Google: Great company
LinkedIn: Great way to discover people
Microsoft: Strong operating system
Yahoo: Strong global brand
Instagram: Fast growth
Facebook: Incredible discovery vehicle

We’ll keep it going in Facebook flavor with the next session all about FB Graph Search, so check out the following post for that.

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