Facebook Ad Chief David Fischer: Making Ads ‘the Best Thing on the Page’

In March of last year, just as market watchers Hitwise and comScore reported that Facebook overtook Google as the most visited website for the first time, Facebook also stole one of Google’s top ad executives: David Fischer. The former deputy of Facebook COO Sheryl Sandberg at Google and a onetime editor at U.S. News & World Report, the 37-year-old Fischer left a job spearheading the search giant’s local ad effort to become Facebook’s vice president of advertising and global operations.

Despite his sales background, insiders say Fischer was a good fit with Facebook’s geek culture. At Google, “he made (sales) people in an engineering culture feel that they were valued,” says David Scacco, Google’s first ad salesman and now chief revenue officer at MyLikes, which pays celebrities and other online influencers to promote ads on social sites. And despite a modest demeanor in public, he was known for sometimes cutting loose, dressing up as Ozzy Osbourne and singing ‘80s songs at sales conferences. That said, he’s clearly a sales guy: In a 50-minute interview, he used the word “opportunity” or its plural 58 times.

In this edited interview for my story on Facebook’s advertising strategy in the latest issue of MIT’s Technology Review magazine, Fischer talks about how Facebook hopes to transform marketing into “the most useful thing on the page.”

Q: What’s your vision of advertising, and how can Facebook make that happen?

A: The Web is being rewritten around people. There’s this transformation that’s happening from an information Web to a social Web. Once the Internet was great for answering questions like “What is the weather going to be like in Cambridge tomorrow?” and “What flights can I get from Boston to San Francisco?” It wasn’t so good at aggregating information about the way we actually live our lives, which is people.

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Facebook’s Sheryl Sandberg: “Now Is When We’re Going Big” in Ads

When Sheryl Sandberg left Google to join Facebook as chief operating officer three years ago, many people thought the pairing with CEO Mark Zuckerberg was doomed. Sandberg, a then-38-year-old former chief of staff for Clinton Treasury Secretary Larry Summers before building Google’s ad operation to 4,000 people, was as gregarious and polished as 23-year-old Zuckerberg was awkward and nerdy.

But it wasn’t long before Sandberg became Zuckerberg’s most valuable friend, thanks to her Madison Avenue connections and her ability to articulate a vision of advertising for them. In an interview for my article on Facebook’s ad strategy, Sandberg expanded on that vision, outlining the company’s unique advertising opportunity in social ads driven by what she calls word-of-mouth marketing at scale. Here’s an edited version of that interview:

Q: You’ve said Facebook’s sweet spot is the top of the marketing funnel–that is, ads that create awareness and consideration of a brand, rather than direct marketing. Is that turning out to be true?

A: It’s demand generation. We’re not really demand fulfillment, when you’ve already figured it out what you’re going to buy–that’s search. We’re demand generation, before you know you want something, before you know you’re interested in something.

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Pres. Obama Live at Facebook Town Hall Meeting

President Obama is about to start his town hall meeting at Facebook headquarters in Palo Alto, as thousands of Facebook members watch it live online. I wasn’t able to attend live, but I’ll join the online throng to hear what he has to say to his interviewers, Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg, and to the many people (supporters, enemies and wingnuts alike, if comments here are any indication) who will be asking questions online. I’m liveblogging it here.

And it’s underway as Sandberg welcomes the president. “Even though it’s Facebook, no poking the president,” she says. Now Zuckerberg comes on in a suit (CORRECTION: nice jeans and a jacket), (loose) tie, white dress shirt… and running shoes. He pauses. “Sorry, I’m kind of nervous, we’ve got the president of the United States here!” And so he introduces Obama, who appears to get almost as many cheers from the studio audience as Zuck.

“I’m the guy who got Mark to wear a jacket and tie,” Obama says. So now we know. “Second time!” adds Zuckerberg. (First time was a January dinner with Silicon Valley luminaries and Obama.) Now they both have their jackets off–no sweating (visibly) for Zuckerberg.

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You Are the Ad: Digging Into Facebook’s Advertising Strategy

When I first  started looking closely at Facebook’s booming advertising business for an article that just appeared in MIT’s Technology Review, I was soon struck by an apparent disconnect. The social networking juggernaut clearly is gunning for big brand advertisers, hoping they will view its 600 million-plus audience as the next big ad opportunity beyond television.

Yet it appears that most of the ads on Facebook are actually from either small businesses or no-longer-small businesses (but not traditional brands) such as social games maker Zynga and daily deal service Groupon. What’s more, those ads seem more aimed at eliciting a direct response such as an email registration or a purchase on another Web site than they are aimed at branding, which is intended to implant a brand into consumers’ minds that might get triggered later when they’re ready to buy something. And between Google’s search ads and a gazillion display ad networks, online direct-response advertising is already a wee bit crowded–even if Facebook’s massive database of personal info holds a lot of appeal for targeting likely prospects.

In other words, it looks like most advertisers on Facebook aren’t yet using its ad platform for the very purpose it’s designed for: branding. Of course, it’s tough to complain about a company whose ad revenues are doubling, to an estimated $4 billion this year. But if Facebook is to fulfill the huge expectations of its investors, who are valuing Facebook at around $65 billion (give or take $10 billion or $15 billion depending on who’s counting), it needs to do more than provide just another way to drive a direct sale. It needs to capture–or create–a market out of the vast majority of ad spending overall that’s aimed at branding.

One way to do that is providing what Facebook has been doggedly pitching to Madison Avenue for years: ads with a social component, such as its recently introduced Sponsored Stories, in which people’s stated “likes” for a product or brand are turned into ads. These essentially are word-of-mouth marketing on steroids. David Fischer, Facebook’s vice president of advertising and global operations, lays out this possibility in detail in an interview I’ll post here shortly. Suffice to say, there’s certainly potential for brands to divert a significant portion of their television and print ad budgets–and a few are starting–but for a lot of brands and their agencies, that’s still on the come. For now, they seem more enamored of Facebook marketing tools such as Likes and Pages–which are free.

Another strategy is to create a new advertising market, as Google did with its search advertising. Search ads enabled very small businesses, as well as those with just an online presence, to place effective direct-response ads for a global audience for the first time. Likewise, Facebook could open up brand advertising to the business masses in a way no medium has yet done. That’s something Facebook COO Sheryl Sandberg makes a good case for in my interview with her. Depending on how you define branding vs. direct-response, this may already constitute a good bit of Facebook’s advertising.

Either way, I came away understanding why investors seem so enamored of the company’s potential–but also why many people in the advertising business aren’t yet ready to place all their chips on Facebook.

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