Facebook gives region's advertisers fresh avenues
Tech juggernaut says its platform is an ideal tool for communication during a difficult period for the industry
It may be an over-earnest teenager in the US, but in the Middle East, Facebook is a lively, fast-growing, fast-learning five-year-old with a passion for making friends.
The world’s most successful tech company has had operations in the region for five years now and has an excellent school report to show the grown-ups back in California.
It was 2012, shortly after the Arab Spring uprisings, that Jonathan Labin, the regional director for Facebook in the Middle East and North Africa (Mena) opened in an office in Dubai’s Internet City, with just a couple of staff.
True to start-up culture, Mr Labin did everything, including running downstairs to buy paper when the printer ran out.
The former advertising executive was lured to Facebook from London by the prospect of building this potentially huge market. In 2012 the social media platform had 45 million users in the region, now there are 158 million, spanning all ages and nationalities. Egypt has 35 million users, the UAE 8.7 million and Saudi Arabia has 17 million.
Last month, the company revealed that globally it had made more than US$9 billion in revenue in just the past three months.
“Dubai has been a very good, welcoming home for us,” says Mr Labin, 39. “It’s become a hub for the region with the Dubai office having a remit that now goes beyond the Middle East.”
One number that Mr Labin, who is half-German, half-Venezuelan, is particularly proud of is the 158 million users – 100 million visit the site at least once a day. “It’s a very sticky platform,” he says.
And that attracts advertisers: five years ago revenues in the region from advertising were between $200 million and $300m, now that figure is $1.5bn, against a backdrop of a declining advertising market, the company says.
“It’s not an easy time for advertising in the region but that’s not the case for digital advertising or for Facebook. It’s not just that it’s a new medium, it’s that companies big and small really see value in advertising with us,” Mr Labin says.
His ambition for the region is to carry on growing the number of users and advertisers. There is a saying at Facebook that only 1 per cent of the journey is done. “We never get even to 2 per cent,” he says wryly.
Facebook also owns Instagram, WhatsApp, Messenger and a business collaboration tool called Workplace. Much future growth will probably come from these platforms.
Mr Labin insists that people can use all of these tools together, so there is no danger of classic FB being cannibalised by the upstarts.
Instagram is the fashion-lovers’ feed, which offers inspiration and is used by many retailers to help drive sales. WhatsApp and Messenger are businesses that California has signalled are ripe for growth in revenue – presumably through more advertising.
Facebook is now one of the biggest consumer brands in the world, but there is also a desire to tap into the lucrative business-to-business sector.
Businesses are being encouraged to use Messenger to communicate with customers. So far its use has been largely restricted to customer service, but Mena corporates are interested in using it in other ways.
Recently Mercedes-Benz used Messenger to entice customers to check out its new model and arrange a test drive, its Messenger campaign reached 5 million people and reaped 10,000 test drives in the region.
Facebook also launched a Bots for Messenger challenge this summer in 64 countries in Mena which drew more than 1,000 entries. The company worked with 60 entries to mentor them over three weeks before announcing winners and runners-up across the region who won prizes of between $20,000 and $10,000 and further mentoring.
“Facebook is working with developers and the ecosystem closely in the region, but a lot of the good things that happen, happen without us knowing about them,” Mr Labin says.
Of the tech ecosystem in the region, he says: “It was a very small community of developers but it has grown very considerably in the last 12 months. The Amazon acquisition of Souq.com in March means that the Mena region is now on the radar of international players. The area has had its first exits [tech company jargon for a sale to a bigger player, or a flotation] and there is money for funding – although that is still behind the US and Europe.”
Kudos for the region also came when two developers were chosen by the Facebook chief executive Mark Zuckerberg to attend a VIP roundtable at the firm’s Menlo Park headquarters. The businesses were InstaDeep of Tunisia, which creates 3D, augmented reality and virtual reality solutions, and MindRockets, a Jordanian company that creates assistive technologies for the deaf.
So what next for the company? Mr Labin says that video is one of the mega-trends that will become a mainstay of how we communicate.
But the company is also anxious to make sure it does not exclude people in a region where bandwidth can be patchy. It has developed advertising solutions, like slideshows, that work for users with more basic phones and infrastructure.
“When I arrived in Dubai, people were texting frantically. Then there was the desktop to mobile trend, the next big shift we will see is from text to image,” he says.
Mr Labin points out that Facebook is a mission driven company and last month it revised its mission, for the first time in its history.
“Our focus was on making the world a more open, connected place but part of our new mission is giving people the power to build community and bring the world closer together,” Mr Labin says.
Of the many thousands of Facebook groups in the region, Mr Labin is particularly proud of Ramadan Sharing Fridges. This UAE community initiative started in 2016, when local people placed fridges full of food outside during the month of Ramadan, so poorer workers could help themselves to food. The initiative took off on Facebook and returned this year, with even more support and followers for the group.
Mr Labin thinks that the next big shift in communication can be found in the success of groups and messaging tools.
“In future I think that the default way to communicate will be through a platform like Messenger. If I want to reach out to someone, why would I send an email? No one wants to wake up to loads of emails,” he says.
And that will surely become another global trend with which the Middle East region is definitely on the ball.
Updated: August 2, 2017 05:27 PM