Facebook takes the social world by storm

Stephen Haines, UK commercial director of Facebook, tells Media Week how the company aims to evolve its advertising platform around its users' behaviour.

Stephen Haines, UK sales director of Facebook
Stephen Haines, UK sales director of Facebook

What started as a platform for meeting girls, the brainchild of a 20-year-old Harvard supergeek, has catapulted social networking to dizzying heights.

In just five years, Facebook has become one of the most successful technology companies on the planet. The addictive social network attracts more than 294 million users worldwide, it is the fifth-largest site on the planet and it reaches more than 22% of the global internet population.

It seems users can't get enough of poking or throwing sheep, with a massive 71% of social media users surveyed in the US saying they couldn't live without Facebook. The site attracts 78 million regular users in the US alone, while in the UK, more than a quarter of the population use the site monthly, with half of those users returning daily, spending an average of 25 minutes on the site.

"These simple facts are the most powerful figures to cite to a marketing director or media agency," says Facebook's fresh-faced, albeit slightly tired, Stephen Haines, who has been working through the night on forthcoming changes at the company.

Haines was hired as Facebook's UK sales director in 2007 from Yahoo, where he was head of agency strategy. He has since been instrumental in building Facebook's UK team from two to 50 people and developing strong relationships with the top 25 agencies and their FTSE 100 clients.

But while his transition from Yahoo to Facebook was a natural one, it was a different story when he initially joined the digital sector at Yahoo in 2003, aged 30, from outdoor media owner Viacom, now CBS Outdoor.

He says: "When I left outdoor, there were a few raised eyebrows about why I was going into the digital space, but it was a time when the internet was growing. Yahoo had a big team, a big proposition to go to market, and it was going head to head with Microsoft. I learnt a lot about the market [at Yahoo] - it showed me that digital could play a pivotal role."

While Facebook's audience reach is evident, the site that was not initially conceived as a business proposition has been criticised for not taking advantage of its vast database and failing to create a successful ad platform.

Bread and butter
Following the catastrophic launch of the Beacon ad programme last year, which shared users' data with third-party sites without their knowledge, Facebook has since launched Engagement Ads, which has become the business' "bread and butter".

With only one ad site on the homepage, the interactive ad service is used as both a direct response tool that directs users to brands' homepages and a brand engagement tool that enables users to become a fan of the brands, which is then visible to users' friends lists.

Facebook's EMEA commercial director, Blake Chandlee, describes Haines as "an ambassador and evangelist for agencies and clients, and obsessive about delivering innovative and valuable campaigns and partnerships". So it is no surprise that Haines says 2009 will be a key year for the company, focusing on clients and agencies and adding value to its proposition.

However, he concedes a lot more needs to be done. He says: "There's still education to be done about what social media can do. For example, it's a myth that only the youth use social media - our biggest growth market is the over-25s."

Like Twitter, Facebook aims to evolve its advertising platform around its users and their behaviour, using its targeting ad tool. Haines comments: "The user is at the forefront and then the ad product will evolve."

The sudden emergence of micro-blogging site Twitter is no doubt keeping Facebook on its toes. Facebook recently launched a status update model that, like Twitter, allows users to receive a continuous stream of updates from their friends, instead of every 10 or 15 minutes.

However, Haines says the move was not made as a response to Twitter, rather it was a natural evolution for the site. In fact, Haines maintains Twitter is good for Facebook, because the more social networking advocates there are, the better.

He says: "If Twitter is going to the market about the power of social media, then that is good for us. Facebook can't fight [the social media cause] on its own. There is still a big pull, with so many people still consuming media online."

Breaking even
While Facebook is reportedly on track to bring in $500m (£305m) in revenue this year, it is not expected to break even before the end of next year. Founder Mark Zuckerberg has said he will look at micro-charging for games and applications, which is set to become a good stream of revenue for the business.

However, experts predict that getting users to put their hands in their pockets will be a challenge, having become accustomed to using the network for free.

This month, Facebook received a second cash injection from Russian investment firm Digital Sky Technologies, boosting its 1.96% stake in the company to 3.5%. With the company now valued at $6.5bn, Facebook is in an enviable position.

Haines is, therefore, unsurprisingly upbeat about the future. He says: "Brands are waking up and realising that online is playing a significant part in their strategies. Online is a great place to be - it changes so quickly and the penetration is fascinating."

He adds: "I wonder where the whole thing will end up. We've overtaken outdoor, radio and magazines, so how long will it take the internet to overtake TV and press? I believe anyone in this space should remain motivated."

UK sales director, Facebook
Head of agency strategy, Yahoo UK & Ireland
Head of agency sales, Yahoo UK & Ireland
Head of strategic sales, Yahoo UK & Ireland
Agency sales manager, Viacom
Co-founder, contract sales company CHA Media Sales
Playing cricket and football in Australia
Senior sales executive, Future Publishing

Lives Earlsfield, London
Cricket, tennis, The Killers and cooking
Football team
Manchester United

Haines on...

Twitter: Twitter is a force for good because it is talking about consumers changing their habits, which is good for social media as a whole, not just Facebook. I don't use Twitter, but the more companies that promote social media the better. Then at least it's not just us going and banging on clients' doors.

The year ahead: It will still be quite challenging, but platforms basing themselves on technology and offering a genuine value to users' lives on the internet will prosper. Business models will have to change as technology moves quickly or they will get left behind. At Facebook, we will offer better services and continue to work with a group of advertisers on both a regular and long-term basis.

MySpace: In a way, MySpace and the likes of YouTube are not direct competitors. The portals with a big reach are our competition, because we are a platform. If you get away from the clutter, that's where brands get [social networking]. Whether you get Facebook or not, it still reaches 18 million people. Good brands that have a business model and offer value will still be here in the future.