When Mike Murphy joined Facebook in March 2006, he was coming aboard a promising startup with 5 million users, nearly all of whom were in college. A little more than four years later, Facebook is one of the most important companies on the Internet and last week reached 500 million users.
Along the way, Murphy (pictured), who leads Facebook ad efforts as vp, global sales, has seen brands and agencies change their tune. The service was originally seen as a nice way to reach students, although the effectiveness of the site was widely questioned. Now, with a massive global audience and top brands relying on the platform to connect with their customers, Facebook boasts ad relationships with 83 of the top 100 advertisers.
“Somewhere midway between 5 million to 500 million, we became far more relevant to marketers,” he said.
Facebook has done so without following conventional wisdom when it comes to advertising. Like Google, Facebook is an engineer-driven culture. That translates into an intense focus on user experience, even if it gets in the way of commercial interests. Facebook doesn’t run rich media animations, for example, only user initiated video clips.
It’s easy to forget that Facebook was initially viewed as a laggard to MySpace in responding to the desires of advertisers. While MySpace would offer home-page takeovers and branded skins, Facebook provided little in the way of creative leeway, just a simple thumbnail photo and a few lines of text.
That’s turned out to be a smart move, Murphy believes, since Facebook designed its ad products around how people use the site. Ad units act like other content, with voting, “likes” and other features, allowing brands to act less like intruders.
“They’ve become more social over time,” said Murphy. “It’s our hope they get more and more social.”
His view is seconded by an unlikely source: MySpace co-founder and former CEO Chris DeWolfe, who recently said the social network erred by giving in to revenue pressures from parent company News Corp. “We probably had too many ads on our site,” he said last week.
To be sure, Facebook isn’t ad-free. Last quarter, it passed Yahoo as the top server of display ads to U.S. users, according to comScore. Much of its efforts, particularly with big brands, have focused on social formats that encourage users to spread the message.
But getting brands more social hasn’t always been easy. Facebook made one of its biggest missteps with Beacon, a feature for sharing off-site activity that ignited a privacy firestorm.
The company announced Beacon in November 2007, at the same time it debuted its ad platform. Beacon was never intended as an ad product, Murphy insisted, but it got portrayed that way.
“The mistake was doing it the same day and not communicating in advance the value it brings,” he said. “I think we’ve shown we’ve learned from it.”
Facebook’s sheer size makes it an attractive target for brands. Starbucks has over 10 million likes on its page there. Skittles passed the 7 million mark last week. The next step for brands is cracking the code on making those fan bases into a valuable resource.
“The marketers we’ve been working with the longest and [that] are the most progressive are getting huge value out of the connections they have on the platform,” Murphy said. “They’re talking much more about, ‘How do we get value out of the connections we’re getting?’ It’s much more than a beauty contest of who has the most fans.”
Now, Murphy and his team are trying to get creative agencies excited about the platform. The pitch: don’t look at the visual limitations of Facebook advertising, but focus on how to make creative use of the social connections the service enables.
“At first glance, it’s a small canvas,” he said. “It’s all about what you can do with the presence on the page. The interesting future for us is bringing creatives into the experience.”