Facebook's New Ad Effort Focuses on Emerging Markets
Social Network's User Base Is Expanding Rapidly in South America and Asia
By Jack Marshall
July 2, 2014
Facebook Inc.'s user growth has slowed in the U.S., but in emerging markets such as South America and Asia, its user base is expanding rapidly. Now, the social network is attempting to extract greater revenue from those markets with new, tailored ad formats and more local sales offices.
In India, for example, the company has been testing new ads designed to appeal to the popular "missed call" behavior. Similar to a collect call, people in India often dial a number and hang up before connecting to send a signal to a friend or family member, such as "I'm outside" or "call me back," without incurring charges.
Facebook now is letting users give brands such as L'Oreal SA's Garnier "missed calls" from their mobile devices by clicking or tapping an ad. A subsequent, automated return call might include content such as music, sports scores or messages from celebrities, alongside messaging from an advertiser.
India is one of Facebook's largest markets with more than 100 million users, up from eight million in 2010. Meanwhile in the U.S., user growth has leveled off as the market has become saturated.
The company is working on additional ad options customized for other regions and countries, too. The goal is to have ads "better suited to meet the needs of people and advertisers in high-growth countries," said Kelly MacLean, a product-marketing manager who leads Facebook's emerging-market ad team. "We're thinking through where there are nuances from a local standpoint we can capitalize on."
Meanwhile, Facebook is also extending ad capabilities that have proved successful in established markets, such as the ability to target ads to users based on geographical information.
The company is hoping to capitalize on marketers' growing interest in emerging markets. According to forecasts from ZenithOptimedia, ad spending in Latin America will grow 12.5% between 2013 and 2014, and by 10.9% in the "fast-track Asia" region which includes China, India and Indonesia. By comparison, ad spending in North America is forecast to grow 4.7%, ZenithOptimedia said.
Facebook is promising to help marketers reach people in countries where it has previously proved difficult to do so, owing to fragmented media landscapes and expensive Internet connections.
In many emerging markets, users don't generally access Facebook through desktop computers, tablets, or smartphones but rather through "feature phones"--low-cost handsets that offer limited functionality.
But introducing new ad products and selling them to marketers can be tricky. In 2012 General Motors Co. stopped advertising with Facebook because ads on the service had little impact on consumers' car purchases. It has since resumed buying ads  last year, however.
Facebook said it would continue to expand its global footprint and increase its sales and marketing efforts in high-growth regions. So far this year, for example, the company has opened new sales offices in Indonesia and Colombia.
Write to Jack Marshall at Jack.Marshall@wsj.com