As a digital advertising platform, Facebook is increasingly being favoured by e-commerce firms, especially in the lifestyle category. Nicolas Franchet, Facebook's global head of retail and e-commerce, talks to Ranju Sarkar about how the company can help e-commerce firms target customers. Edited excerpts:
India has a significant number of Facebook and WhatsApp users. How do you plan to improve the way you monetise them?
Globally, we have 1.32 billion people on Facebook. We have good understanding of their identities and their platforms - more than 80 per cent are on mobile. In India, 108 million come on Facebook every month; of those, 94 million access it on mobile devices.
People don't come to Facebook to shop. Facebook is a personalised newspaper; people come to see pictures of their family and friends. There is an opportunity for marketers to introduce their content in an interesting, personalised and targeted way. We are in the business of making you discover something in your newsfeed and influencing that purchase. It's closer to traditional merchandising.
10 years ago, e-commerce started disturbing retail by allowing consumers to connect to products from their homes. In a session, you saw more products on your desktop than when you visited a store. Now, the sites have figured ways to show you fewer things. Mobile is disrupting e-commerce. So, on a device as big as this, I cannot show all the products I am showing on a pamphlet. So, retailers need to figure what to show you. We are trying to get retailers to build merchandise in a way that it speaks to the consumer, as a shopkeeper does.
In terms of advertising revenues, how important is the Indian market to you?
It is significant because it is a fast-growth market. Some markets are more evolutionary; here, it is more revolutionary. People are going from no internet at all to the latest android phone, and they are buying online. Also, there are things such as cash-on-delivery, which aren't there in the US or Germany. And, the missed-call feature, which is very cultural. We are exploring ways to incorporate this into our product. India will be very important because of its sheer size. We help our clients grow their business. We have to build solutions that work with what they offer their customers. So, the more we understand what they are doing, the better the solution will be. Fundamentally, 95 per cent of the way Facebook will work for e-commerce companies in India will be the same as in the US or Germany. But the best practices we want to work on have regional or local dimensions.
In what situations will Facebook appeal to marketers more than Google?
It's complimentary. We are in the business of helping people discover products. It doesn't mean people should do only that, instead of Google-search for products. On Facebook, the opportunity is to distinguish the way you acquire customers. It's a big area of investment for marketers. We have a product that allows marketers to target an app at those who don't have one. Other strategies include retargeting and remarketing. Maybe, some visited your website and looked at a product, but didn't buy. Or, added a few products to their cart, but did not pick up. On Facebook, there are a lot of ways to reengage with such customers.
How is Facebook better than Google, in terms of targeting and segmentation? How are you leveraging this in India?
Facebook is a merchandising engine and a targeting platform. In search, you are not targeting; you are looking for products, but there's no value-add.
On Facebook, I know a lot of information about you, as you had signed up. A marketer can say 'give me all the moms in Delhi aged 30-40'. It could also target customers who haven't bought anything in the last 12 months. We are very protective about personal data; we don't allow marketers to target people at a personal level, only a small cluster. We can do that because we are a people-based targeting system.
Is this what you call affinity cluster-mapping/marketing?
Ultimately, the idea is to create clusters. We have a notion of lookalikes. So, you can say 'here's a group of my best customers-the top 10 per cent'. You could enter that into your system and we could find the top one per cent like them. Broadly speaking, creating clusters and segments is what we are all about.
How do you enable better targeting and segmentation using demographics?
We offer all the basic ways for demographics-slicing and dicing. The affinity could also be interest groups-people who like shopping or travel; we have created these interest groups based on the interactions on their home page. There's an infinite number of ways in which you can cut data. It's a challenge for companies because technology is ahead of companies.
How do you enable re-marketing?
You come to my website and look at something. I am re-targeting you with the same thing or something similar, about 30 seconds later. We have a product called Facebook Exchange, which does this well on desktops. Now, we have ways to do this on mobile, too. This is critical for e-commerce companies because in 70 per cent of the cases, carts are abandoned. If you haven't visited my site last week, I will come up with some offer. That is re-marketing.
Google has started offering more visual ad formats, which are giving good returns to advertisers-image ads or small display ads on email which, when clicked, offer full-page image ids. How have you responded to this?
We are not responding to Google. They are offering a great service, as are we. Retailers tell us this is complimentary. We push something called a link ad. For a long time, people were uploading pictures of products, particularly in fashion. We also have little links to their websites. On mobiles, you see a big picture and when you click on it, you go to the website and purchase it. Our goal is to see the content is very well targeted and the creative part is good.
E-commerce companies say Google has developed massive capacity of agencies in analytics, as well as platforms for reporting and analytics. Is this missing in the Facebook ecosystem?
We are working on something called the preferred marketing developer programme, an idea of developing an ecosystem of specialised agencies around us. They have been through a robust certification process and are at the disposal of our clients. They work on the ad front, creating and managing pages; they can help on apps.