EXCLUSIVE: Facebook’s Australian sales chief, Liam Walsh, confirmed he has relinquished his current role to lead a crack performance advertising unit for the social media juggernaut in Australia and Japan.
The venture is aimed squarely at diverting hundreds of millions from Google’s “rivers of gold” in paid search and online portals direct response advertising volumes – OMG chief executive Leigh Terry estimated Facebook could take up to 30% of the $2 billion-plus online direct response ad market in Australia in two years.
Facebook’s new move is also likely to flood the market with cheap advertising inventory which will only generate revenue when those same ads trigger a response from Facebook users. Walsh will simultaneously launch Facebook’s Performance division in Australia and Japan, the second biggest ad market in the world behind North America.
He has also been tasked with leading Facebook’s plan to automate its sales processes in Australia via a shift to biddable trading platforms and partners, a term Walsh has in his new title as Head of PMD [Preferred Marketing Developers] and Performance.
Walsh refused to be drawn on specific numbers but said there was “enormous opportunity” for Facebook in the digital direct response ad market because of the detailed data which the platform gleans from users and what they are posting. That user information could be turned into direct response ads in a user’s News Feed on a cost-per-click or cost-per-acquisition basis.
“Facebook contacts 80%-85% of the entire population and there’s not that many doing that,” Walsh told AdNews. “It’s pretty much Facebook and Google doing that and with Facebook we have incredible amounts of personal data.”
He cited “life events” that users post on their Timeline or News Feed as examples of how direct response ads on Facebook would work. If someone posts they have a newborn child, for instance, ads for life insurance could be instantly delivered on a cost-per-acquisition or cost-per-click deals.
“Search is powerful in direct response advertising, but it’s not the only game in town making direct response work,” Walsh said. “All the ad networks and portals are writing large volumes in DR so I think we will do incredibly well.”
The sectors which get immediate priority for Facebook’s Performance division include travel, retail banking, insurance and telecommunications. Some say Walsh has a challenge ahead of him because the market thinks brand and display advertising when using Facebook. The company has spent the best part of four years in Australia preaching social for business and now it is offering performance-led ad bundles.
“This move will certainly provide more competition to Google in performance,” OMG’s Terry said. “The biggest challenge is the proof around ROI. It’s not inconceivable Facebook can take 20%-30% of the digital direct response market in a couple of years. I expect this to be a big success if they get their ROI right.”
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