Facebook Q&A Keynote: Danny Sullivan Interviews FB’s VP of Global Marketing Solutions Grady Burnett

Welcome to AIMCLEAR‘s coverage of #SMX West 2013!  Day 2 at the  main event kicked off with an intimate keynote conversation shared between Danny Sullivan, Founding Editor, Search Engine Land and Grady Burnett, Vice President of Global Marketing Solutions for Facebook. The two sat down for an in-depth Q&A that covered the numerous platform developments and recently-launched features FB has rolled out over the past year, including Facebook Exchange, Graph Search, an acquisition of Instagram, and much more. AIMCLEAR live-tweeted the spirited chit-chat via @beebow. Read on a discussion recap.

(Note: Speakers are attributed as Name:, but the following are not always direct quotes!)

Danny: Let’s start off with a little tour through the evolution and landscape of Facebook advertising.

Grady: The last year at FB focused on various stages of the marketing funnel. We’ve done a lot of work at the top of the funnel, driving awareness, and further down the funnel driving conversions.

We think of advertisers in 4 segments: brand advertisers, direct response advertisers, local advertisers, and developers. In the rolling out of custom audiences, FB exchange, and FB offers, for example, we were offering tools to enhance the work these advertisers are already. We’ve worked hard to simplify the advertising experience and the functionality of new ad units and features to make things easier for SMBs and local advertisers.

Promoted posts, for example, were a solution for SMB and local business owners to streamline the advertising of their pages by leveraging organic content in a promotional way.

Standard ads on FB have performed well for some time now, whether they’re driving traffic to an app, a page, or off-site.

We’ve  seen FB Exchange drive energy much more down the funnel, closer towards the conversion. Marketers are using it to greatly enhance the work they’ve already been doing. It’s been a terrific way to layer the ability to find an audience with the ability to identify and re-engage users who, at one time, expressed intent.

Custom audiences are a great way to look at a giant audience and slice and dice it to see who’s doing what… and who’s not.

Danny: Are there new ads we can expect to see coming out in 2013?

Grady: We’re always looking to improve our types of ads. The existing ad units that have rolled out demonstrate that. We’re looking to increase that across the board. We’re working very much with the bottom end of the funnel to drive conversions, and on the top end, to drive better awareness and targeting. For a long time now, we’ve seen advertisers focus on last-click attribution. But there’s a lot more going on. We have a strong interest in saying, “What’s happening across the whole playing field?” Looking at last-click is only looking at “shots on goal” for soccer, rather than looking at what all the players did to work towards those shots.

Danny: When do we get FacebookSense? Ads are happening on FB, retargeting is fascinating… but why not take FB ads out there into the web?

Grady: There’s so much to do within our own site, so much growth and engagement. The average user is engaged 50% more this year than they were the year before… so we’ve been really zeroed-in on how to help marketers do the most they can… ON Facebook.

Danny: One big focus with Facebook lately has been mobile, and the emphasis of getting local businesses on board. How has that changed panned out?

Grady: Local business response was good. They’re becoming increasingly active, and as a result, increasingly visible. A sizable number of local businesses have FB pages now, and more and more, they’re becoming advertisers, too. Because of this, for users, Facebook mobile is a great way to discover more and more local businesses. Facebook mobile and local search are important parts of FB graph, of people’s daily lives, of our communities.

Danny: When you went public, there was a lot of attention on mobile as being a weakest link for Facebook. So, is that all reversed now?

Grady: Mobile for FB is terrific – usage has always been high. About a year and a half ago, we realized we weren’t as invested as we could be in mobile from a user perspective. Mark wanted that to change. It’s been a pretty big transformation since then, trending towards FB being more of a mobile experience. Mobile adoption has grown, tremendously– now 680 mil users on mobile, which is higher than desktop usage. Revenue has literally grown from zero to 25% in the last year. We’ve always focused on the UX first. If we can find that, we can find ways to deliver relevant & meaningful advertising. People really share themselves on FB – tell the world about who they are and what they like. as a result, ads have often been relevant.

Danny: What’s the perception been like for the “new” FB mobile feed, launched last Thursday?

Grady: Very few people have it as of right now, but reception has been great. It’s largely a visual redesign– the algorithm and search functionality hasn’t changed. The biggest change is that images are now represented much larger, perfect for mobile screens.

Danny: One of the biggest changes in terms of FB ads is more space, more canvas.

Grady: Yes, we see that’s led to better results for advertisers.

Danny: What’s your thoughts on Nick Bilton’s recent New York Times article on a drop in post engagement for reasons unknown?

Grady: Our newsfeed algo constantly looks at relevance – what’s the most likely thing for you to engage in? We’re constantly tweaking that, but changes we’ve done have not affected the median reach of posts. It’s all based on relevance.

Danny: Another big change has been the launch of Graph Search. Can we get a top-level progress report?

Grady: It’s a pretty small userbase at this point, but early results are great. There’s always been a tremendous amount of search on FB targeted primarily at people, photos, and places (in that order). We thought there was area to improve that, using more natural language queries.

Danny: It’s certainly a better tool for Facebook, but are you happy if all this turns into is a better way for people to search FB? Or do you want it to grow to be a Google Local challenger? Bring people into Facebook who may not have thought to use FB as a search tool?

Grady: We’re focused on working inside FB for now. There’s a lot going on, and we want to help people discover the content they care about.

Danny: Do you ever see FB owning Bing as its external search engine?

Grady: I’d say no. We have to focus on what’s going on inside FB for now.We were even hesitant to call it Facebook Graph “Search” (and deemphasize the social element).

Danny: What are your thought son Google+?

Grady: The world has always been a social place, and we are social beings, so I think all products should have a social element to them.

Danny: Do you do well if more people are social, even if they aren’t social with FB tools?

Grady: I think being social a positive thing in general. We don’t have to be THE place for people to be social on the web. If we can encourage people to be social on other sites, that’s fantastic.

Danny: How do you get the balance of relevant ad targeting and privacy?

Grady: We think a lot about privacy as we design all of our products. We want to deliver more relevant ads, too. We think we have a terrific ability to deliver relevant ads, and we’re very transparent about that with users on how data is used, and we give people the power to mark ads as offensive or irrelevant, etc. We’ve even given privacy controls in-line for each post (share this post with group X, share this post with everyone, and so on).

Danny: Speak a bit to your union with Instagram and advertising.

Grady: They’ve always had plans to build advertising into their model, but there’s no plans now. We’re focused on user growth.

Danny: When you get to that stage, will advertisers have to sign up for an Instagram Ads account, or will it work through FB?

Grady: We’re just not at that stage yet. We’ll cross that bridge when we get to it.

Danny: When you think about features on Facebook, is there one that you’re particularly proud of?

Grady: I’m really proud of what we’ve done with promoted posts for small businesses – to help make things easier for them. With one SMB, they started using promoted posts and held constant all of their other advertising efforts. And they saw an 83% increase in online store sales… just by employing promoted posts. Small businesses are the lifeblood of the country and the lifeblood of the world

Lastly, Danny wrapped up with a little free-word association. He said a word, and prompted Grady to respond with one word reactions. 

Danny: Twitter.

Grady: Don’t use it. (Pause for much audience laughter and one slightly flustered Grady.) That’s I don’t use it. I don’t have a reaction because I don’t use it. I didn’t mean that you shouldn’t use it!

Danny: Google:

Grady: Great company.

Danny: LinkedIn.

Grady: Great way to discover people.

Danny: Microsoft.

Grady: Strong operating system.

Danny: Yahoo.

Grady: (Some more flustered laughter… and I actually didn’t hear his answer.. something about strong… brand… something….)

Danny: Instagram.

Grady: Fast growth.

Danny: Facebook.

Grady: Incredible for discovering people.

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And there you have it! Thanks to our interviewer, Danny, and interviewee, Grady, for an insightful kickoff to Day 2 here at #SMX West 2013. Stick around AIMCLEAR Blog for more coverage straight from the convention center, and of course, follow along with yours truly @beebow for continued live tweets!

photo credit: double07design on deviantart