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Facebook earns 51% of its ad revenue from overseas markets; pushes video ads in India

Facebook company executives told Reuters that overseas markets bring in more advertising revenue than the United States for the company, amounting to 51 percent of global ad sales in the first quarter, with growth in Asia the fastest in the world at 57 percent.

Facebook company executives told Reuters that overseas markets bring in more advertising revenue than the United States for the company, amounting to 51 percent of global ad sales in the first quarter, with growth in Asia the fastest in the world at 57 percent.

While Facebook has reported regional growth in percentage terms, this is the first time it has detailed ad sales outside the United States and Canada as a percent of worldwide sales. According to a Reuters report, like the advertisers it courts, the world’s largest social media platform looks at international markets for growth.

“The next 1 billion consumers are going to come from these countries,” Carolyn Everson, vice president, global marketing solutions at Facebook, was quoted in the report as saying.

Total advertising revenue for the quarter increased 46 percent to $3.3 billion, the vast majority of Facebook’s $3.5 billion in quarterly revenue. Fifty-one percent of total ad revenue would be about $1.7 billion for international markets. International advertising revenue rose 36 percent from a year earlier, Facebook said in the report.

While Europe is growing slower than the United States, the Asia Pacific region is ahead and a focus for Facebook.By comparison, Google said that 57 percent of its revenue was from international markets in the first quarter, although it did not break out ad revenue specifically. Mobile advertising represents more than 70 percent of Facebook’s total ad revenue, and mobile is particularly strong and attractive to advertisers in emerging markets, Everson told Reuters.

Facebook is benefiting from exporters in China trying to reach people outside its country and from an influx of venture capital funding into India, giving start-ups funds for advertising.Chinese businesses are getting more sophisticated about promoting their brands, Dan Neary, vice president of Facebook’s Asia Pacific region, told Reuters.“Increasingly manufactures are becoming savvy marketers in their own right,” he added.

In India, e-commerce startups are exploding and many are using Facebook’s advertising platform to reach new consumers, Neary added in the report.The company has also initiated specific methods tailored to the country including optimizing video and pictures for slower connections in India, where an ad product called “missed call” also helps customers avoid phone call charges. Many people in India dial a friend and hang up to send a signal without incurring charges. Facebook incorporated this system into its ads. A person can place a “missed call” by clicking on a mobile ad from Facebook and receive a return call with information, for example the score of a cricket game, sponsored by a brand.

According to the report, Facebook also plans to capitalize on the visual images, specifically photography and videos, that are being embraced by younger audiences across the world. Instagram, the popular photo app, announced on June 2 it is opening up its platform to all types of businesses, not just hand-selected brands and will begin rolling out more specific targeting capability globally this year.

In other news, according to the managing director of Facebook India, smartphone adoption in India may not be as deep as in mature economies, but the country’s broad range of devices should be no barrier to the delivery of compelling visual ads.

Speaking to exchange4media, Kirthiga Reddy said that people around the world are gravitating to video and that the channel is particularly effective for advertising as long as advertisers know their audience and take account of device capabilities.

To reach consumers with a 3G or 4G smartphone, she recommended that advertisers create an engaging, short video to ensure the smoothest load times and to deliver a message quickly. It is even better to customise a digital video ad to appeal to different audiences, such as men and women, and that the ad is tested and optimised as it progresses.

But even for those consumers still relying on feature phones, they can be reached through visual communication, she added in the report, while adding that marketers should consider deploying ads with images or links that bolster their brand story.

“It is important to deliver the most well-designed ad based on that mobile device and the bandwidth,” Krithiga told exchange4media. “The best part is you can tell your story across all devices.

“We encourage publishers and advertisers to upload native videos to Facebook as they can take advantage of two benefits – videos will play automatically in News Feed, and videos will have view counts.”

She said it is also important for advertisers to understand what type of message consumers want to receive – whether it is to be informed, entertained or to find out how to improve their lives.

Reddy was speaking after Facebook delivered its first update about its Creative Accelerator programme, which was launched in March to encourage growth in emerging markets.

The social network said video consumption is “sky-rocketing” across the world, particularly in high-growth regions, and that FMCG giant Nestlé had seen success with its “Theatre in a Cup” campaign in India. The campaign “connected with people across rural and metro areas in India using photo or video ads, depending on the person’s device and connection speed,” the company said. 

According to Facebook, the campaign increased brand awareness by 9% and purchase intent by 5%.

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