Featuring Nick Baughan and a T.O.P.T.I.P from Gil David
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In This Episode
In this episode we discuss:
- A career in agencies and moving to Facebook
- Managing the scale of advertisers at Facebook
- How agencies can interact better with FB
- What skills agencies might need to succeed
- The role of the data analyst v ad buyer
- Government regulation of Facebook
- Brand safety
- Ad placements and content
- New social platforms and how competition drives the product forward
- The rise of ecommerce solutions on Facebook products
Nick’s Book Recommendations
The War of the Poor by Éric Vuillard
The Order of the Day by Éric Vuillard
Agency help: https://www.facebook.com/business/help
Agencies: The agencies link redirects to this page https://www.facebook.com/business/agencies/about
Beer by the coast – Dave Dye writes about his recollections here: https://davedye.com/2014/08/18/adnams-pt-2-words/
Nick Baughan is Facebook’s Director of Agencies leading their partnerships with the marketing, professional services and investment industries.
Prior to joining Facebook in 2019, Nick spent 13 years at WPP Plc most recently as CEO of Essence across EMEA, overseeing media investment for advertisers including Google & BT.
Nick sits on a range of industry trade bodies and committees including the Effies Council, the Advertising Standards Authority Industry Advisory Panel, The Advertising Association Trust Working Group and the IAB Board. Previously Nick also sat on the World Economic Forum’s Global Council for Information. Nick also mentors for the Marketing Academy programme.
Nick lives in North London with his wife and two children.
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Andi Jarvis, Eximo Marketing.
This transcript has been done automagically using Happy Scribe and hasn’t been checked by a real person, so there may be some hilarious mistakes where the AI can’t work out our accents – I’m sure they’re trained on just the American accent.
And welcome to the strategy sessions today I am joined by Nick Baughan from Facebook Nick. Welcome to the show. Well, thank you.
Thank you very much for having me.
So let’s first start by let’s talk about you for a moment. Tell us, how did you get to to Facebook? You didn’t just wake up one morning and you were working there.
Give us a little bit about your background. Yeah, absolutely. Well, and again, I really appreciate you taking time out of out of your morning for this conversation. I’m on where I live and I also work in in North London and in Highbury at the moment with with my wife and my two kids who who are mercifully going back to school next week. But but in terms of how I got to how I got to Facebook. So I started working in the ER in the distant past at a couple of media independence total.
Yeah, which is which is a fantastic business, still still thriving today and then moved to Group M, popped up where I spent the following 12, 13 years working across some brilliant agencies with some amazing people at a business called me see me. The CIA as then was where I was a partner then a couple of years doing business at Mindshare. And anyone who’s done new business at an agency knows how tough a job that can be. And then Lindsay Patterson was was just getting going at Maxus as as CEO.
Lindsay’s a phenomenal leader. And she was she was growing the business really, really fast, along along with the CFO that Tim. And she kinda asked me to. It’s going to be over over at Maxus. And I went and spent five billion years there is as Abdeh and then then CEO. And then I think back in in twenty eighteen, WPP decided to merge what was then ABC and Maxus to make weight. Mencap, which is a fantastic agency today, and also at the same time they’d acquired Essense, which was a media digital media independent a couple of years before.
And then they just decided to to expand Essence’s remit to make it a kind of full service, all media agency. So I went to to Essence to run that Besnik business across Europe, Middle East and Africa, which was, again, an enormous privilege with some incredibly talented people. It’s now being run by by Tim O’Brien. He’s he’s he’s he’s growing the business at a fantastic rate in in Europe.
And a couple of years down the line, I have the opportunity to to to look at Facebook. And it was it was working with Steve Hatch, who I’d worked with before. And it felt like too interesting a role to turn down because it was it was a new challenge, but it was also mentoring on working with an agency community that I’d grown up in, I respect and I loved. And and it felt just like the right mix. And two years down the line, I’m happy to say that that was absolutely the case.
And as all rolls do, it tended to expand a bit. So so I spent a huge amount of time with our agency community, but also with with the investment industries. So with venture and with private equity, with consultancies. And also spent a lot of time now with our incredible UK trade body community.
That’s that’s how I got here. I mean, all told. I’ve been enormously privileged to work at a number of incredible businesses with with. A huge number of incredible people, so I think I do count myself extremely lucky every day.
And we had Casey Jackson on a couple of episodes ago. Katie is MDE at TBWA London, which is an Omnicom agency. And I think a lot of my audience sort of grew up in digital agencies, not solely, but a lot of them did were sort of big scalable digital agencies are major, you know, sort of 10, 15, 20, 25 million turnover and a big movers and shakers in the industry.
But the agencies like TBWA and the ones you’ve worked at, sort of Maxus and WPP agencies, a slightly different scale of agency aren’t the huge organisations. Yeah, I mean, that they are very big organisations, and I think historically there was probably a much more significant divide in terms of. Scale and rate of growth in I think perhaps once upon a time, particularly in the analogue world where the cost of entry into advertising is that much higher than the Billings, i.e., size of consolidated Billings were a real factor in one’s ability to compete in a scaled world, the world.
The more you spend tends to be a correlation to the to the price that you by the media at. However, that’s not the case so much anymore. And I think. I think there is a real advantage to agility, to flexibility when it comes to being a smaller agency, and because there is no advantage in scale on biddable platforms like Facebook and like a Google in terms of media pricing, realistically, it’s about value that you can deliver back to your point.
And if you are able to specialise, if you have the knowledge, if you have sophistication on the platform and you can deliver business results back to an advertiser, then the size of the parent organisation is irrelevant. And you’re still able to charge a, you know, a really good premium for adding value back to the business. So we see a lot of digital independents growing at a at a very fast rate indeed. Likewise, we also see a huge step change in the sophistication of some of the bigger agency groups on our platform as well.
So I think I think there is a really thriving, competitive industry out there, which is which is brilliant for all people.
I think historically, as as it’s the same today, there’s probably some ingredients. That are common in all successful businesses, I think, first, an ability to change and be innovative and be flexible. I think, secondly, an absolute focus on the client, I think where I’ve seen agencies fall over in the past is where perhaps they’ve become too introspective and too concerned around their own structures and taking the eye off of of their customer. And I think and lastly, by far and away, the most important element is the team.
The agencies are a services business. There are product organisations out there. If you sell shampoo and you have shampoo coming off the end of assembly line, that’s still going to happen if you have to make some changes internally for people know people out there and agency people that you have no business and therefore getting the right people, getting a diverse team, a happy team, a team that’s prepared to challenge one another, I think is is absolutely the key ingredient to success in every agency I’ve seen that’s done well has always had that kind of alchemy of team that makes all the difference.
It’s interesting and I will ask you to comment on this, but I know when I work with businesses, they have to say, how do you pick a good agency? And I said, look, there’s lots of different ways they’ve got to fit with you. You’ve got to know they can do the work. But the one question I always want you to ask an agency, any agency is about staff turnover.
I said to me, it’s the canary in the mine. If you have if you work with an agency and if they’re not tracking it, that’s a bit of a flag. And if they are tracking, it won’t tell you that’s another flag. If they are tracking it and it’s ridiculously high, that’s another flag.
You need turnover. You need new people coming in and out at zero.
That’s another worry. It’s it’s really, really high.
Or if they’re not asking that question and getting a good answer is the key is one of the key things I look for when people are trying to recruit an agency. So that’s one of the things I always advise all my clients to do.
And I, I couldn’t agree more. I think I think and it’s probably an occurrence on this statistic that the average industry turnover used to be something like twenty seven, twenty eight percent in an agency. It’s now that as you said it, you know, and I’m glad you said it, because turnover can be a really positive thing if you’re helping people develop in their career and they’re moving on in the right way and everyone’s growing and the industry is thriving and sharing talent, that can be an absolutely positive thing as as in the same way, the very line that can be a very negative thing, I think is the drivers of turnover that are really important.
And then also, you know, clearly, if if if the entire senior management has turned over in the last 12 months, you know, there’s probably something something wrong there, too. So I think we are looking at a more mobile workplace. I think that’s only going to be more pronounced over the coming 12 to 24 months. But I agree and I think I think staff churn is that is a really good business indicator.
Mm hmm. If you look at what we sort of we’ve got into agencies, it might be or if we stick on agencies for a little bit, if that’s all right.
And and look at the agencies. You know, look, they’re inherent in the Facebook business model, right? You’ve got millions, millions of advertisers just in the UK and Ireland alone, millions of advertisers.
So what are the challenges and what are the benefits that you’ve got there? Because you sometimes hear smaller advertisers saying, look, we just can’t get in touch with anyone at Facebook, but with the scale of advertising, that’s part of the problem, isn’t it, for the organisation?
Yeah, I think that’s absolutely fair. And I’m going to apologise for drinking my own almost cup of tea for those people who can say.
So I think I think there’s a couple of points to to that to that question. And I think the first is the role of agencies. I think I think this is broadly dispelled now. But there was there was a period where there was this sense that somehow businesses like ours, like Google, somehow felt that that agencies were frenemies or enemies and we were somehow looking to displace them. And that couldn’t be further from the truth. I mean, it absolutely couldn’t be further from the truth.
And I think we have something around 10, 11 million.
Paying appetisers so that the kind of universe that we’re talking about, so even with the best will in the world, we can’t provide face to face coverage for every single one of those advertisers. So what we do is we invest a huge amount of money in resource, in in tools and automated tools and best practise in education. But we also make sure that we have in-person resource, usually chats in health functions when things go wrong, because there are times when obviously people have challenges or problems with the platform or questions to ask, and therefore we have invested very heavily in our support service.
So I think I had a I had a look yesterday, actually, and I think the current waiting times to speak to somebody in the health centre on a two or three minutes. But we are always making sure that we are providing as much resource in the shortest time possible and to be the most effective health as we can be, because, as you say, we are a very scalable business. And go back to the dichotomy between, you know, the old as ecosystem where it was ready for blue chip businesses, higher cost of entry, higher cost of production, where any kind of a select few could compete to a far more disaggregated scale scale, decentralised business where every business can be on the platform.
But that comes with its infrastructural and operational challenges that we have to continue investing in. So it’s it’s something that’s always a focus for us and for those sort of medium and smaller agencies.
What type of resources?
And there isn’t a lot out there for from Facebook that was available for these agencies. What could you signpost people to? What services and documents and things could you point people to? Yeah, absolutely.
So I think I think well, let’s talk more generally and then we’ll get on to agency. So I think I think the the two things for all business audiences are absolutely the kind of support function, which I think is Facebook dot com for such a business, for its help, which is just search for business help centre for Facebook and that. And that’s where you’ll get into the kind of traction support functions for business. And then what we would call blueprint, which is our business education offering and blueprint, is a phenomenally detailed, rich platform for learning that covers everything from, you know, from very granular kind of marketing developer qualifications through to marketing science through to more straightforward basics, finding and buying on on the platform so that that’s where anyone across the business when it comes to agencies, clearly that there are agencies we have direct relationships with where that’s not possible, then it’s absolutely worth going on to Facebook dot com forward slash agency, which takes you to a to a programme which effectively allows you to sign up to Facebook as an agency.
It allows us to recognise the business. And then and then what that platform does is it gives you access again to a lot more specific best practises, which is more kind of germane and relevant to the agency category. Again, provides a kind of way into to support and just effectively starts that journey so that people starting up an agency today. Then by signing up to that platform and kind of looking on your business managers, an agency one, it allows us to make sure that we’re supporting the right level of resource at every stage in your journey until it’s down the line 10 years.
You’re a thriving business of thousands of people. That that that’s that’s the ambition. Yeah.
And we’ll put links to all of those things that I just mentioned in the show. Not so. Just have a look around where you listen and you can click on them and go straight to those platforms and sign up. I think it’s trite sometimes just having that same posting to those resources is really helpful. And when we spoke with phone, you mentioned about the agency thing, it wasn’t something I was aware of. So just having that door open to know.
Right, OK, let’s go and look. They’re registered and we can pick up from there. Yeah.
What about in an agency world? What are you seeing in terms of specialisms and agencies are cyclical. Right? You know, you go through agencies that do everything through to hyper specialised agencies and then back to agencies that do everything. Are you seeing any trends from the agencies that are doing well on Facebook and the way that they’re approaching specialisation?
I mean, it’s a really interesting insight there, and they kind of ebb and flow of specialism to journalism and local residents to globalism, and we do see those kind of currents that play out on a slightly longer term basis. I think what we’re seeing right now and we probably have been seeing for the last couple of years and probably will see to the next few years is is a bias towards fascism. And and I think that is that is absolutely correct.
Now, I think for any business, whether it’s an appetiser or an agency, that has to come a point where you do generalise and I think increasingly that sort of measurement basis. So there needs to be an individual or a team that’s empowered in the business, that understands the dynamics of cross-channel media, can then make effective channel allocation choices based on the mentality or aggressive modelling or whatever it might be, that that’s the layer of the organisation that needs to understand cross-media.
It’s the efficacy of it. I think once you are into execution, I really don’t think you can specialise too much. And I think where where somebody has a hand in business manager or social probably at the broadest trying to get them to then stretch across to search, for example, I think is asking too much to then charge a premium for to an advertiser because they’re just the rate at which we ship products, innovation, new products, new opportunities means they’re trying to cover everything at an institutional level across social across all the platforms in the United States and then and then onto onto Google as well.
It just feels like far too great to stretch out as an execution level.
So I think where we’re seeing agencies winning is nearly always where they have a deep specialism and where they’re subsequently able to take that specialism and diversify across revenue streams. And that is very hard to provide new products and services at a generalist level because affectivity just becomes a question of where does the resource fit? Whereas you have that deep specialism. If you really understand the nuance and the platforms, then it is easier. You are up to date your current and it’s it becomes a really valuable service.
So I would always advocate and I see more success from businesses who are specialising than businesses who are taking a more generalist executional approach.
And I think that’s something I see in agencies, too, in that they the difference between a small to medium size agency and a large one is often the bigger ones.
Have somebody sat in our team of people setting on reporting on analysis, data analysts or whatever they call them, who are looking at reporting across. Whereas if you come to a smaller performance, marketing agencies often call themselves, they will be hands on and they may have specialists in Google and social ads or whatever, but a reporting level that they’re trying to mark their own homework or trying to report across to things when they need to make one of them look better for their own individual specialism.
So it’s interesting that when you get to that big a level, they do take that more global approach to reporting. And I think it’s it’s important that we do that because we drummed by stats in marketing at the minute, certainly in performance and in ads. And you’ve got to be able to objectively pull out the best ones to report on the campaigns, not just as I said, mark your own homework, which I think still happens a little bit in some agencies, some smaller agencies.
But it’s unfair. Fair to ask you to comment on that. So I’ll move on.
Let’s talk a little bit more about Facebook product and some of the issues and some of the headwinds and things that the product comes across because regulation in terms of it’s something of interest to lots of people, but specifically in agencies and advertisers, some of the regulation that’s being talked about will affect them particularly.
So what’s Facebook’s your view in terms of the regulation coming to the industry?
Yeah, so this is this is a pretty expansive topic, as I know, you know, so I’d like to a couple of minutes on this, if that’s OK.
So at a at a different level, regulation is is a good thing. So we’ve been very clear for the last two years that the Internet needs more rules, more regulation, and we’re not standing still waiting for it and maybe come on some of that later. But I think last year, this year, next year, when we’re actually going to see these new rules come into place. And there is a huge amount of activity in in policy and regulation and standards around the Internet.
And and as I say, it’s probably a positive development. I think it is very easy to conflate regulation. So a lot of people sort of talk about regulation as a as a kind of amorphous mass, which I’m not sure is completely helpful. I think it’s it’s more helpful to try and split it out into different and relevant areas of regulation. I think to answer your question squarely, I think there are probably four different types of regulation that that are particularly relevant to us, our agencies, our advertisers.
And I think those are content. I think that competition is privacy. And I think those ads, or all of which are really important areas of regulation and busy in their own right. So if we can take that little bit into into each of those, if it’s that would be helpful.
I think so. Yeah, absolutely.
I think I think probably the busiest at the moment is is content regulation. And so it can be quite helpful to look at geographies. So when it comes to content, clearly there’s no such thing as a kind of global regulator or global government to set standards which, given the kind of different mores and cheats in different markets, makes a lot of sense. The first time we probably see meaningful regulation here is is around regional level within the media. So this is obviously the EU.
So they are looking at the Digital Services Act, which is going to be kind of governing online content standards and things like take down time. So that’s contravening content equities, moving it. And then I think we look closer to home. Then the government is just moving on to the next stages of its online hommes consultation, having done the white paper dispute, some of the first recommendations. And what that’s going to say is Ofcom take responsibility for social media in the UK.
And this is this is a really positive development. Ofcom provide a gold standard regulatory framework for for broadcast and have done for for a very long time. Prices obviously sits in a self-regulatory environment. So that’s that’s that’s content. So there’s a huge amount going on there which will change dramatically over the next 12 months. I think in competition, you’ve then got, again, the EU, I think it’s the Digital Markets Act and that that looks to create the most pro competition market possible across the EU and in the in the UK.
That’s being looked at by the Competition and Markets Authority CMA, who sets up the digital market unit. So are quite similar language in a lot of these organisations. And again, the remit here is to to make this market as competition as it possibly can be within ads and digital advertising. And that’s clearly going to be a body that we’re going to be engaged with on on a on a on a on a on a heavy basis, I think.
And then once we get into privacy again, closest to home, that’s mainly going to come under the auspices of the CMA. Again in the digital markets unit, which is being set up at the moment. The EU have had already enshrined their position on this through the general directive.
And then you’ve probably got the more controversial position of of Apple sitting as more of a kind of unelected global regulator for privacy across their ecosystem. And then I things I lost the last say that I think adds that that is worth mentioning often gets overlooked, which is odd given, you know, the industry that we work in. So the Advertising Standards Authority is is the organisation that regulates ads across all channels, all media types now from broadcast.
It’s a regulatory organisation with with Ofcom for non broadcast, it’s self-regulatory. And then occasionally also the government will seek to to legislate on a statutory basis. Areas like ISIS, which is obviously a current topic, but it’s always, I think, very important to note that that the NSA covers all channels. So that’s where we are, I think, on it on a broader regulation perspective.
I mean, as I say, this is the next 12 to 24 months, I think is going to be a time of huge development and progress and change that. We’re not standing still waiting for it. I’m sure we’ll talk about community standards perhaps later. But, you know, we have invested billions of dollars and we continue to do so every year in in content, in terms of community standards and policy. We have north of thirty five thousand people working in this space, as I was for the adage that if you want to know what’s important to a business and where it’s spending its money and integrity is where we spend a huge amount of money and resource.
But likewise, you know, we try to innovate. So as I said at the beginning, when it comes to content, there is no such thing as a as a global content regulator. We engage in what I think is one of the most innovative, pioneering forms of self-regulation that I’ve seen through the creation of the independent oversight board. So this was 20 individuals taken from from many judiciary journalism NGOs.
Government represents, I think, in the U.K. by Alan Rusbridger is the editor of The Guardian, and they will then recruit an additional 20 members themselves. So just to really make that that independence pronounced from Facebook, they are empowered to make content decisions on individual cases that are binding by Facebook on overturn the mark on, and that they are completely independent in their judgement. And they are also empowered to make policy recommendations, the changes which they are already doing.
And I think this is going to be a heavily scrutinised exercise, but I think one of the most far reaching innovations in in in global media regulation that’s been and know I’m really looking forward to seeing how that that group develops over the coming years.
And on Facebook, as you mentioned, are engaged in all those different regulatory pillars, I suppose, at levels talking to that. And that’s sometimes perceived in the media as Facebook, trying to shape the regulation. But that’s not what it is, is it’s more just a you talk to all the stakeholders. Government has a responsibility to talk to all the stakeholders as they start to shape up the policy. Absolutely.
And I don’t think we’d be doing our job properly if we weren’t engaging with policymakers on on regulation. Ultimately, it’s going to be down to the policymakers to to set policy. However, we will always have a perspective on on what we think is is a sensible regulation. And we are always asked for input into into that kind of policy creation. So so absolutely. I think it’s right and proper that we put a perspective forward and that and then it’s down to the regulators to to develop policy as they see fit.
No, no. Those those four areas you mentioned, we could probably do a whole podcast on each one of them and probably some more as well on that.
But looking at some of the things that I think might be relevant to advertisers and things like that are brand safety is a big issue for lots of people.
So you’ve done a lot at Facebook in terms of brand safety.
But you know what? I’m talking to people who don’t book out looking at your content and your ads, appearing next to content that might not be matching what your brand values, basically, and that can be harmful content. Sometimes it just might be places you don’t want to be. So what Facebook done to to help advertisers with that type type of content and that approach?
Yeah, so brand safety is obviously legitimately that towards the top of every every has every appetisers priority list. And I think there’s there’s two or three areas to touch on here. The first is that when it comes to our platform, making the platforms safe for consumers is the best way to ensure a safe environment for advertisers. That absolutely sits at the heart of our approach here. So this is this is what I referred to earlier, is community standards. So for those people who aren’t aware of how we develop standards over the course of history, we developed policy and standards across multiple themes and areas.
And the standards are developed by policy experts generally in conjunction with with NGOs and subject matter experts to make sure that we have the robust, most robust set of policies available. And they cover all sorts of spheres. So we’re talking about things like terrorism or hate speech or nudity of any country areas on our platform standards against them. And those standards are completely available for scrutiny. So anyone can look at those standards in complete detail.
So it’s important to have the community standards, but it’s even more important to enforce against them. And for the advertising community, it’s even more important to know how well we’re enforcing against them. So once a quarter, we released something called the Community Standards Enforcement, which again is available for public scrutiny. And what that does is in the most. Granular level, possible looks at over the previous quarter how much content was on the platform in those kinds of areas that I that I referred to earlier, I think there’s 12 areas, but for Facebook and Instagram, and it then goes into a lot of detail as to what the prevalence is, i.e., how frequent are we seeing that kind of content on the platform?
How much actual volume of content was taken down? How much of that taken down content was appealed? And therefore how much was reinstated on appeal? And really, I think is is is the gold standard for full platform of transparency. So certainly over the last 12 months, I think hate speech was a real focus for the platform and for for advertisers. So I think the last two quarters we’ve been able to publish a prevalence score. I think the quarter before last, the prevalence of hate speech on the platform is point one percent.
So that’s roughly ten pieces of content for every ten thousand in on view. In the last quarter, we were able to bring that down to, I think, point zero seven two point zero eight percent. So content for every ten thousand. And what that does is it gives advertisers a currency as a metric. And and we are completely upfront about that. And we go into great detail as to why we are there and why we make improvements or why we go backwards.
And that’s critically important to be fair for our advertisers and our agencies to to judge us against so that those are the community standards, as they say, that that’s the most important thing for our business to get. Right. So then it gets a little bit more detail in terms of pricing. So for certain placements, generally, the more contextual ones like instant articles, audience, network in stream, we have a very standard and sophisticated suite of tools to allow for exclusionists and content contextual.
Limitations that that that other other platforms as well as well, we work with a range of third parties in this space and it’s it’s it’s overall a very sophisticated brand safety environment. And we continue to evolve that over time for speed so that the feed portion of our business historically that has actually been governed by community standards. We are in the process of running a very limited test with a very small group of advertisers for brand contextual controls in feed. Now that say it’s a very significant engineering task because we classify content by feed in everybody’s feed is completely different.
So this is a it’s a it’s a trial that we’re taking incredibly seriously and therefore has a lot of scrutiny. It will roll out reasonably slowly over the next 12 to 18 months. But that is something that we are exploring, as I say, with a small group of controlled advertisers to begin with.
And that sounds like a really interesting development, though, in terms of where feed advertising could go. It sounds like it starts in a brand safety place, but could actually contextual advertising and feed is a really interesting development as opposed to an advertising perspective.
It’s a really interesting development and one that that, as I say, we’re taking very seriously and one that we need to make sure that we’re getting right for our users and for our for our advertisers. So I think watch this space, more developments over that over the coming months. Definitely.
I mean, even you said it’s a significant engineering challenge. And just as we’re talking, trying to even imagine the scale of the engineering challenge is making my head hurt, given how I used to say everyone’s food is individualised and the number of factors that go into deciding that and trying to listen that, which is why I’m not an engineer. I’m a marketer because my brain can’t compute that.
So from a safety point of view, that’s driving the product forward and the product, she said, is being driven forward. The product is being driven forward by agencies and advertisers pushing for new things. You’re also being pushed by competition, driving you forward some in the last you know, if we’d have done this interview two years ago, nobody would be saying, are you worried about Tick taking your advertisers because nobody wants a tick tock. What would be that sort of discussion?
So it was Snapchat before that. And there’s lots of there’s always a new competitor coming in trying to hoover up some of your ad money, I suppose.
Is that a concern or are you look, do you take that approach that, you know, when Channel five launched, it didn’t kill advertising on ITV or Channel four? The generally speaking, the pie just got bigger.
So is competition welcomed by you?
Is it you know, does it cause sort of furrowed brow at Facebook?
I was it viewed so I mean, I think I think the first thing I say is it’s not our ad money. It’s it’s the advertisers have money and they’ll you know, they’ll put that money where they think it’s going to work hard. And I think at a general basis, we absolutely welcome competition, I think. I think there’s sometimes a bit of a lazy narrative that that’s been allowed to develop and you’ve touched on it, which is somehow that the ad revenue always has to be directly substitutionary.
So if you know, if if you know Instagram’s doing well and stops not doing so well or top tick tock doing well, then Facebook’s not doing so well. And and the market doesn’t work like that. You know, the ability to grow the overall market is completely contingent on a healthy industry.
And we compete on a number of levels across a number of different sources, whether it’s a broad share wallet or share of mind with broadcasters and publishers, whether it’s at a far more social basis where we take talk or or with SNAP or with Pinterest or Twitter, there is a huge and very vibrant market out there and a vibrant market and a competitive market pushes us all to be better.
And for us, for businesses like ours, that’s about shipping products. It’s about innovation. And Facebook’s never been a business to sit back on its laurels for a second. And, you know, we know really well that if we don’t invent the next iteration of Facebook and then somebody else will. And therefore, it’s absolutely critically important for us to innovate. And we have been innovating at an extraordinarily fast rate in terms of products, particularly over the last 12 months.
And more and more people have turned to our platforms in order to maintain that community, in order to keep in touch with people. And we’ve invested phenomenal resources into improving our community tools and making sure that where we’re staying up to date with demand. So is is is competition good? Absolutely. Just forces us all to be better. And I think that you certainly don’t see any furrowed brow. I mean, there’s plenty of our eyebrows for other reasons.
I said big business, isn’t it?
There’s always brags about about something along the lines that I used and and that drive of innovation in the products that are coming through.
Is that how much of that is driven by internal good ideas and how much that is driven by, you know, agencies and advertisers. And it would be lovely if we could do and have simplified the process a little bit there. But is it just a little bit of both going on?
Yes, it’s definitely a little bit of both.
Know we have teams whose role it is to be the voice of of sales and engineering and the voice of engineering and sales. So there’s always that dialogue going on between our partners and on our product teams to make sure that we’re shaping Facebook’s suite of apps and services for the future. And we absolutely rely on input from from third parties.
And that can be at a product level, but it can also be at a very granular brand safety level. And you know, what I can’t say is that is that we hear sensible feedback and we can turn around a product change in the space of a week. Sometimes these things take time, but ANSYS is a good business at this thing. And I think if it wasn’t if we weren’t responsive to consumer or business feedback, then then we probably wouldn’t be as successful as businesses as as we are now saying that the challenge for Facebook is as we grow in size in terms of a number of people, is to try and be as fast and quick and as agile was reactive as we can be to to development.
But I think I think we maintain a pretty good balance. If the if the rate of product development over the last 12 months is anything to go by, then, then I think we should be doing a good job.
I would say probably in terms of the excitement that new products have generated in the market, it’s been a while since I’ve heard as many agencies and business owners are as excited about e-commerce coming to Instagram in a meaningful way. Yeah, it’s probably been the most exciting development and people are waiting for or wanting to jump into for the last couple of years, I would say, because it’s got a scale and attraction that something like tick tock maybe doesn’t have yet for for businesses and much more sort of it’s just a natural place for all product and purchase and a path to purchase.
And businesses see that and feel excitement for it. So can we expect to see more in that space coming from your and I know you’re a product owner as such, but, you know, is that sort of a direction that that is coming and a big priority for the company?
Yes, definitely. So I think I make a general point for which is which is really relevant for. The types of partners that we work with, whether that be agencies or venture or consultancies in the I think the best possible shift. Facebook has been the perception from. Provider of ad inventory to providers sales. And that is a it’s a really critical nuance and we’re not there with every part of that we work with yet, but certainly across large portions of the advertiser and marketing services industries, I think we’ve made that shift from from being a cost centre to a profit centre.
And and that is that’s completely critical for the success of our business and even more critical. It’s it’s important for the success of all the businesses that that work with us. You know, one of our core strategies is to grow our own business by growing other people’s businesses.
And that’s that’s more and more right in the in the small business landscape as well, where, you know, we we we offer an extraordinarily efficient way and effective way for small businesses to reach audiences, to help people discover their brands and their services and to grow. And that that word discovery is is really, really important here. And I think we’ll be talking a lot more about what we call discovery commerce over the next 12 months. And I think that that breaks down to a couple of areas.
Clearly, we’ve seen this absolutely massive shift in e-commerce adoption over the last 12 months. And this is kind of a common theme of squeezing maybe five years of development into into 12 months or perhaps 10 years. I think we’d look at discovery in probably a couple of levels. The first is, is the similar advertising tools that we’ve had and developed and evolved over the last years, which allow big businesses, small businesses to have their products discovered, to be able to reach relevant and personalised audiences, and that that kind of commerce economy engine that that Facebook has become, which is being able to deliver so much back to domestic GDP’s, particularly in the small business environment, but beyond the kind of an ecosystem, it’s also about fulfilment.
So we launch things like Instagram, shopping, Facebook shop. And what these allow us to do is just effectively give a really seamless retail experience for businesses of all sizes. So historically, if we were on a platform and you’d see an ad and you click through to the ads, you’d usually get sort of taken over some kind of slightly chunky landing page, which wasn’t in the least bit tailored to you as an individual or for your purchase. Whereas by doing that in in the same platform, businesses were able to to actually keep the experience a incredibly streamlined and frictionless, but also completely tailored to an individual.
And just really those massive drop offs that you get from taking people off site and a really suboptimal experience. And then I think as part of that is just the ability to engage more.
So we whether it’s a messenger or WhatsApp, the ability for businesses to engage with customers is is is critical. I mean, you and I were both speaking just before we got started today about our experience with telco engineering teams at our houses to fix the Wi-Fi. And, you know, on the on my experience, I did the whole thing over chat. And it was it was so much more so much less painful than two to three.
You know, all is important to please hold for another 45 minutes.
And it’s just so much more seamless. And I think that that combination of discovery and signal, I think that the fulfilment process and and then the ability to have a low touch but really efficient engagement model through through chat is what’s really going to make the difference to us in the next 12 months.
No, Brilliant said. And that’s it. And I think it allows a democratisation, I think of being able to offer silico services, you know, people buying online. Now, I used to Amazon’s level of service and expect that everywhere and of these tools can, if they can help businesses not necessarily compete with Prime, because that’s difficult to do, but it can help you compete on response times and customer service and slickness of experience. And I think it’s a positive generally.
Look, I think if there’s one thing that ties together a lot of what we talked about in the last hour, it’s democratisation. It’s about the ability to bring tools, services, advertising experiences to consumers and businesses at low cost or no cost through efficient cost and in an ecosystem that never existed before. And that’s why we feel pretty passionate about ads in the. Exchange France is it allows us to effectively democratise business, and I don’t just mean locally know the ad revenue go off at a slight tangent here, but the ads, ads, revenue model that we have globally, I think is.
Genuinely progressive, because what it allows us to do is allows us to take ad revenue from developed markets like the UK and the US and take that revenue and provide our services and our access for free in developing markets.
And that. In turn, then stimulates those economies, and I think that kind of virtuous circle of of being able to recycle, develop tax revenue into developing markets is it’s incredibly powerful. It’s one that that often goes overlooked. But it’s the reason why in a historical in a sector, in media that’s been more domestic than autos or financial services or whatever, that the globalised media markets and the value exchange platforms is is really powerful because it allows that kind of recycling.
But as I say, a slight tangent. But I think a really democratisation element here is is is really fascinating. And it’s absolutely at the heart of what we’re trying to do in terms of building community. And I think it’s really great to get the Facebook perspective on that and hear, you know, the way that globalised view effectively, you know, of what you do.
And sometimes it can be difficult when you’re an agency sitting in Belfast, in Bradford, in Birmingham or anywhere else, beginning with B in the U.K. and, you know, looking at dealing with the challenges or problems you have internally for your clients. But, you know, this is a global business looking at these things globally. So, you know, it’s interesting to hear that perspective and just aware of the time. So I have to wrap up questions which ask everybody who was on the show and you’re not getting away without being a cynic.
So here we go.
In terms of books or podcasts or newsletters that you sign up to, there’s a page on my website, which is Ximo marketing strategy, dot com forward slash reading hyphen list. Again, there’s a link in the show and just go and click on that. Every guest who’s on gets asked, what do they recommend. It’s all kept on that page so you can have a look.
What’s your sort of reading of choice. Niccol where do you go to stay abreast of the industry.
I’m going to be a massive disappointment to you, and I’m afraid in that I think especially over the last 12 months, I’ve tried to keep that the line between home and work in incredibly clear. So so obviously during the day, I don’t have an enormous amount of time to read, but I would say that’s all competition point. I do spend. I do rely on Twitter, I think, to keep the most abreast of kind of industry developments. I often follow links on Twitter to some of the people, people that I follow.
They’re the kind of I trust to keep me educated and on top of things. But but after the laptop closes, that it’s it’s generally generally fiction. So I think I think I subscribe to The Economist, which I really enjoy and tend to tend to tend to read at the weekend. But now it tends to tends to be fiction after the ends. At the moment I’m reading and it’s on my desk, a very interesting book, a very small book called The War of the Poor by an incredible French author.
We are. He wrote, I’m reading this because I read his previous one, which was also a very small book called The Order of the Day, which was about the origins of the war in Germany. And he just he just writes beautifully. I mean, it’s probably only 50, 80 pages long. But you if you come out of it feeling like you’ve read something much larger, this one’s about a creature called Thomas Munzar, which was part of the Reformation.
And it’s just it’s it’s an incredible, absolutely incredible read. And the the next podcast after this one, I’ve already recorded it.
And the guest on that, Stuart Robertson, the guy who invented 20/20 cricket, and he’s he gave me a cookbook, which is when he said I honestly said I stopped reading marketing books years ago.
I’m currently reading he gave me a cookbook and a fiction as well.
So, yeah, look, it’s always a theme there, isn’t there? I mean, I come to scratch cooking a lot over the course of the lockdown, really just to stretch the days out. So we’re making a lot of pasta at the moment, doing a lot of sushi and just starting out with Ryan. And you’ve got a place to a different side of your brain. You know, I much like you have cut down business books. I always used to switch between I read one businessman fiction just because, you know, there’s only so many self-help books you can read right now.
I’ve read a lot. I’m currently reading Obama’s book. Oh, yeah. I mean, so the next three years, I think it’s a monster, but it’s a different, different sized book, isn’t it?
But he’s another beautiful writer and it’s not ghostwritten as well, which I really I like that so that he’s got a look.
My my last question then. Yeah. What question do you usually get asked that I haven’t asked.
Well it’s probably again is a bit pedestrian but but I normally, I normally get asked what’s my favourite.
And that’s that, that normally that normally comes up when, when, when I’m talking about Facebook and those kinds of things. So that would be the only question that I think is probably conspicuous in its absence going.
And give us a quick answer for that. And what is your favourite?
Well, it’s my favourite campaign was it’s a really niche one, which was an Adams campaign. I think it was copied by the coast. It’s a small north that’s actually quite large Norfolk based brewery. Now think Norfolk of and they just did. The most beautiful thing was an agency called Campbell Doyle Die and they just did the most beautiful artwork for it. If you look at Atom’s Beer by the case, you’ll see and it’s just so wonderful and so evocative and paid out beautifully on Facebook.
But but but unfortunately, this was this was well before, I think, even events. But that one reason is always absolutely stuck in my head in terms of actually who I think is doing brilliant work on Facebook. I go back to the economist who actually they they always stick out to me, is one of our best advertisers that they they get it right every single time. I find that copy copies always really intriguing. I mean, I you know, I like the brand, so I’m predisposed to like their ads.
But it’s you know, they’re fantastic advertised on platform. But yes, I wish I wish the Adams campaign was still going. But it’s such a lovely bit about what I do.
And I’ve talked to several people from Agency World on this podcast and will continue to do. But I am thinking maybe like a Christmas episode of just getting a load of old ad agency execs and getting them talking about some of the old ads. I think there’s some classics out there that I just I don’t want them to die.
I think there’s some brilliant ones that we could roll back out and talk about forever. So that might be Christmas time this year. There’s an more I mean. Nick, thank you very much for your time and thank you again for listening to.