It’s first agency deal in the country signifies the social network’s aggressive intentions to mop up ad revenues
Facebook, which just reported its second quarter 2014 earnings that saw a $2.68 billion revenue from advertising, has signed its first big agency deal in India. The social network announced a tie up with WPP’s integrated media and marketing company GroupM. The size of the deal was not mentioned.
According to a GroupM spokesperson, with this deal GroupM will get access to unique data and marketing insights that Facebook generates and be in a better position to deliver targetted personalised campaigns.
For Facebook which has globally seen a 67 percent increase in ad revenues from the same quarter last year, such deals signify its intentions of milking more from the ad space. In May this year, it signed a multi-year digital marketing deal (rumoured to be in the vicinity of $500 million) with French advertising agency Publicis Groupe. The deal involving the co-creation of product around data, video and images is mainly for North America but could extend to other regions too. Earlier in the year Instagram, owned by Facebook, had inked a $100 million deal with Omnicom. FB also announced that it was opening up ad space in Instagram. Other ad networks have similarly inked multi-million dollar deals with Google Plus and Youtube, showing the rise and importance of digital media.
"Our partnership with GroupM will benefit clients to reach over 100 million people in India, 84 million on mobile — both smartphone and feature phone — and custom audiences within the 100 million in urban and rural India.” said Kirthiga Reddy, Head, Facebook India.
Significantly, mobile advertising revenues are what have propped up Facebook’s strong showing this quarter. Its mobile advertising business spiraled over 151 percent year-over-year and now contributes 62 percent of its total ad revenue. Obviously it would like more brands to come on to its platform and an assured media revenue is to its interest.
For GroupM, the benefits lie in the data it gets access to and the ability to deliver personalized ads. According to GroupM South Asia CEO CVL Srinivas, "We are delighted with the Facebook partnership that can help unlock even greater value for our clients.This partnership adds to the set of enablers we have created over the years that can help drive digital adoption in our market."
But early reactions pouring in on the FB-GroupM deal from the client side are one of alarm. Companies fear that such deals may see them getting forced on to the Facebook platform even if they are not keen. They also fear "rate arbitrage".
A GroupM spokesperson allayed such fears saying that "as a media agency it would put client's needs first" and if the client preferred search marketing to investing on a social platform, it would do so based on strategic fit.
GroupM has been using Facebook for several of its clients. For Nokia Lumia, GroupM had deployed Facebook’s outcome measurement and sophisticated targeting capabilities to deliver a 54x return on Facebook ad spend.
To add to its digital offerings, last year GroupM India launched Mash Up a digital content unit which has been creating engaging digital content solutions for brands, the most recent being the digital video campaign with Kapil Sharma for Honda Mobilio.
Facebook, which just reported its second quarter 2014 earnings that saw a $2.68 billion revenue from advertising, has signed its first big agency deal in India. The social network announced a tie up with WPP’s integrated media and marketing company GroupM. The size of the deal was not mentioned.
According to a GroupM spokesperson, with this deal GroupM will get access to unique data and marketing insights that Facebook generates and be in a better position to deliver targetted personalised campaigns.
For Facebook which has globally seen a 67 percent increase in ad revenues from the same quarter last year, such deals signify its intentions of milking more from the ad space. In May this year, it signed a multi-year digital marketing deal (rumoured to be in the vicinity of $500 million) with French advertising agency Publicis Groupe. The deal involving the co-creation of product around data, video and images is mainly for North America but could extend to other regions too. Earlier in the year Instagram, owned by Facebook, had inked a $100 million deal with Omnicom. FB also announced that it was opening up ad space in Instagram. Other ad networks have similarly inked multi-million dollar deals with Google Plus and Youtube, showing the rise and importance of digital media.
"Our partnership with GroupM will benefit clients to reach over 100 million people in India, 84 million on mobile — both smartphone and feature phone — and custom audiences within the 100 million in urban and rural India.” said Kirthiga Reddy, Head, Facebook India.
Significantly, mobile advertising revenues are what have propped up Facebook’s strong showing this quarter. Its mobile advertising business spiraled over 151 percent year-over-year and now contributes 62 percent of its total ad revenue. Obviously it would like more brands to come on to its platform and an assured media revenue is to its interest.
For GroupM, the benefits lie in the data it gets access to and the ability to deliver personalized ads. According to GroupM South Asia CEO CVL Srinivas, "We are delighted with the Facebook partnership that can help unlock even greater value for our clients.This partnership adds to the set of enablers we have created over the years that can help drive digital adoption in our market."
But early reactions pouring in on the FB-GroupM deal from the client side are one of alarm. Companies fear that such deals may see them getting forced on to the Facebook platform even if they are not keen. They also fear "rate arbitrage".
A GroupM spokesperson allayed such fears saying that "as a media agency it would put client's needs first" and if the client preferred search marketing to investing on a social platform, it would do so based on strategic fit.
GroupM has been using Facebook for several of its clients. For Nokia Lumia, GroupM had deployed Facebook’s outcome measurement and sophisticated targeting capabilities to deliver a 54x return on Facebook ad spend.
To add to its digital offerings, last year GroupM India launched Mash Up a digital content unit which has been creating engaging digital content solutions for brands, the most recent being the digital video campaign with Kapil Sharma for Honda Mobilio.
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