Facebook has signed its first agency deal in India with WPP’s media and marketing company GroupM. This partnership was apparently announced when Facebook COO Sheryl Sandberg had visited India last month.
Facebook India head Kirthiga Reddy mentions that this deal will enable them to collaborate with GroupM to deliver personalized marketing at scale. Reddy claimed that this partnership will enable GroupM clients to reach out to over 100 million user base, of which 84 million are on mobile phones (smartphones & feature phones). They will also be able to reach out to custom audiences within its user base in urban and rural India.
The Economic Times also reports that this partnership will enable GroupM’s clients to avail better rates on Facebook, and get access to better data and consumer insights and combined research reports. The deal period or the terms of the deal were not disclosed.
Ad campaigns: GroupM mentions that it has been using Facebook marketing for several of its clients. For Nokia Lumia, it claims to have delivered a 54x return on Facebook ad spend by using Facebook’s advanced targeting capabilities.
For the premium apparel brand Arrow that was looking to drive a special discount promotion for its end-of-season sale, GroupM claims to have delivered a 30x return on its ad spend and a significant redemption rate for this exclusive Facebook campaign.
Facebook’s monetization woes in India
Note that while India is the largest market for Facebook outside United States, the company seems to be struggling with monetization in the country. Facebook has never disclosed how much money it makes in India or what the country specific ARPU is, but its Asia Pacific ARPU was only $1.08 in Q2 2014, which was the second lowest among other regions. An ET report suggests that India market accounts for less than 0.1% of Facebook’s revenues.
The company has been trying to address this issue through various initiatives. Last December, Facebook had taken a vertical-centric approach to grow its sales in India and was hiring sales heads for e-commerce, FMCG & Retail business, along with Managers for Agency Partnerships and Marketing Communications.
Earlier this month, It started testing a new type of ad unit in partnership with Bangalore-based ZipDial. The ad unit allows users to place a missed to an advertiser and in return receive additional content. At the time, Facebook had also mentioned that it has started offering state-level targeting to Indian advertisers.
Through the current partnership, GroupM’s experience in areas like search, mobile, content and measurement should also come in handy for Facebook to grow sales in the country.
We are however curious on how this deal impacts third party service providers like Komli Media, which used to exclusively sell inventory for Facebook in India. Remember that LinkedIn had a similar sales deal with NetworkPlay, which eventually wasn’t renewed after LinkedIn built its own India sales team.
What’s also interesting is that Facebook had signed a similar multi-year ad deal with WPP’s competitor Publicis Groupe in May this year. As part of the deal, Facebook was expected to collaborate with Publicis to co-create a product around data, video and images including Facebook and Instagram.