7 months ago| article
Mendelsohn has acceded to the role of ad chief at a tricky time for the owner of Facebook, as it faces both reputational questions and growing competition. So how will she approach her two main priorities: supporting clients and agencies on ad plans and working on trust and safety issues?
Dec 13, 2021 04:04:00 AM | Article | Gideon Spanier Share -
Nicola Mendelsohn’s promotion to global advertising chief of Facebook might have seemed a foregone conclusion after eight years of running EMEA but she still had to go through “eight or nine” rounds of interviews to land the job.
Following a final round with chief operating officer Sheryl Sandberg, Mendelsohn was confirmed as head of the global business group in October at a critical moment. Frances Haugen, a whistleblower, had just accused Facebook of putting “profit before safety”, while the parent company was preparing to rebrand as Meta to reflect a broader focus that goes beyond social media and encompasses the “metaverse”—of which, more later.
Manchester-born Mendelsohn, who is moving from London to New York for her new role at Meta, starts with an inbox full of challenges, although she insists to Campaign that “I absolutely do not” recognise Haugen’s portrait of the company.
Despite Meta’s reputational troubles, the departure of several senior executives, including Mendelsohn’s predecessor, Carolyn Everson, as well as what the company describes as “headwinds” from Apple’s curbs on data tracking and growing competition from rivals such as TikTok, the business continues to grow.
Revenues were up 46% in the first nine months of 2021 and are on course to hit $115 billion for the full year, with more than 97% coming from advertising. Revenues have increased more than 50-fold from $2 billion in 2010 (see graph).
Mendelsohn starts in the role with an insider’s knowledge of how Meta works. “She’s done an outstanding job in EMEA,” Mike Cooper, chief executive of Omnicom Media Group in EMEA and Asia-Pacific, says. “The way she manages the Facebook client council is quite masterful,” he adds, referring to the panel of advertisers and agencies that she set up in the region in 2014.
Still, Everson has left “big shoes to fill”, particularly in her native North America, according to another industry chief, who recalls how Facebook’s former advertising boss had “major pull” with US clients.
Mendelsohn inherits a 4,200-strong team and oversees a good chunk, but not all, of Meta’s ad sales – with responsibility for “all advertisers and agencies that we touch” but “not the things that are automated”, she explains.
Self-serve ad products, which are used by millions of small businesses around the world, have grown in importance over time. Meta’s top 100 advertisers generated less than 20% of revenue for the first time in 2019 and that is likely to have declined since then.
Mendelsohn has two priorities: supporting clients and agencies on their advertising plans and “working with the industry on trust and safety”.
“Making sure that our partners are aware of all the opportunities that Meta has to offer” is the straightforward part. Building trust is tougher, although Mendelsohn frames it as an issue that affects the wider ad industry.
"Agencies have always made sure they’ve adapted—they’ve embraced technology, they’ve found ways to stay relevant"
“A big focus is to make sure we continue the collaborative work we’re doing with the industry on trust and safety,” she says, citing the Global Alliance for Responsible Media (GARM), an industry alliance, as an example.
The timing of Mendelsohn’s arrival at Facebook in 2013 was good. Zuckerberg had acquired Instagram a year earlier for just $1bn, just before Facebook’s stock market float, and he won over investors by aggressively moving the business from desktop. “The shift to mobile was extraordinary,” Mendelsohn says.
More recently, the introduction of Stories (which Snapchat pioneered) has fuelled growth. “Definitely mobile and technology and the cameras changed the way people want to reflect themselves, want to express themselves—that format now is just essential to people and to the way brands are communicating,” she adds.
Instagram’s video product, Reels (widely regarded as a TikTok imitation), has also become a “primary driver of growth”. Mendelsohn says: “We’re seeing more and more mobile phone videos under 15 seconds and this is just going to grow. I think Reels will become as important as Stories already is.”
What’s more, “two billion people now watch videos that we would class as long form, which means they’re eligible for in-stream ads. A lot of people, 70%, watch them through to completion,” she says
Revenue growth is proof that the ad products have been delivering. Asked why brands have kept spending with Facebook, one former executive at the social media giant, who has now moved to a competitor, says: “It’s cheap and it works.”
If there’s a caveat, it’s that Apple’s “Allow apps to request to track” changes pose a threat by reducing cross-site tracking. “These changes threaten the system of measurable results that have helped small businesses spend on online ads with confidence,” Enders Analysis warns.
The metaverse—more theory than reality for now
Zuckerberg has said his belief that the “metaverse”—a phrase coined by science-fiction writer Neal Stephenson in his 1992 novel Snow Crash—will transform our lives prompted him to change the parent company’s name from Facebook to Meta.
Critics claimed the new name was an attempt by Zuckerberg to shift attention from the under-fire Facebook brand but many industry watchers said the switch carried genuine significance.
Enders described Zuckerberg’s 90-minute “metaverse” presentation in October as “a once-in-a-decade tech event, akin to the environment-altering keynotes of Steve Jobs at his peak at Apple”.
Asked to give an elevator pitch for advertisers, Mendelsohn says “it’s probably a bit more than 30 seconds” before offering a soundbite: “It’s about making sure that advertisers are starting to see the ways in which we communicate that aren’t just about looking at the screen but allowing consumers to be more involved in the screen.”
Meta acknowledges the metaverse is more theory than reality at this stage. The creative shop within Mendelsohn’s team is planning “a whole series of events and resources to help creatives learn how to design in the metaverse” by using AR and 3D tools.
A world of new possibilities will open up as brands “can put digital objects into the physical world and then allow people to interact with them”, she says, citing how Made.com and Charlotte Tilbury are already doing this with furniture and make-up.
Trust and safety
Selling advertising is easy compared with the firefighting on trust and safety that Mendelsohn and her bosses have had to do for more than three years.
First, the Cambridge Analytica scandal broke in 2018 over the misuse of Facebook data to influence elections. This was followed by the outrage over the live-streaming of a terror attack in Christchurch, New Zealand in 2019 and then the “Stop Hate For Profit” boycott by hundreds of advertisers in 2020 in response to abhorrent comments on social media in the wake of the killing of George Floyd. Most recently, Haugen’s testimony to the US Congress and release of thousands of documents have raised questions about whether the company is willing to tackle problems about hate and misinformation on its platforms.
“There is a sense that there are more questions than answers,” Mark Read, WPP chief executive, said at its Q3 results. “The imperative is for Facebook to demonstrate to our clients and to government that they can ensure that the platform is safe.”
"We make our money from advertising and advertisers are very clear that they don’t want their ads next to harmful or angry content"
Mendelsohn acknowledges clients’ concerns but uses emollient language: “I would describe it as having very thoughtful, considered conversations with them.” Convincing brands that Meta is a safe place to advertise is “an important part” of her role – “making sure that people are aware of the progress and investments that we’re making”, she says, referring to the 40,000 people involved in content moderation and the company’s $5bn spend on “safety and security” this year.
“[Advertisers and agencies] acknowledge the work we’re doing. They tell us that they have got confidence in the work we’re doing and the fact that we’re not satisfied with where we are – we’re going to continue to build on that. I am proud of the work we’ve done. I know there’s more that we need to do. We’re going to keep making progress.”
But Mendelsohn adds—in a line often pushed by Sir Nick Clegg, vice-president of global affairs—“I think there’s an acknowledgement by the industry that we’re better when we work together, so that’s why we support regulation to make sure that rules for the internet are updated. And that’s why I think things like the partnership with GARM are so important, driving the industry forward.”
Collaboration sounds persuasive but a good number of senior marketing executives don’t see it quite that way. Facebook blunts criticism, they say, by inviting brands and agencies to join its client council and through its own membership of GARM.
Doesn’t that make it harder for advertisers to criticise Facebook or hold it to account because the company has forced its way into the room or kept itself in the room? That doesn’t elicit a direct answer from Mendelsohn. She says: “What’s behind your question is: ‘Do we want regulation?’ The answer is, we do. We want to find the ways in which we can—or as an industry, I think it’s much better as an industry—come and say: ‘This is what the industry wants, not just Meta, but all of the tech companies to adhere to a set of standards that we can align on.’”
She cites both industry-wide and company-specific examples of collaboration, ranging from GARM’s brand suitability framework (which grades the risk level of different types of content across platforms) to Facebook’s own community standards report and “topic exclusion controls for feed”.
“Absolutely not” putting profit before safety
Haugen’s whistleblower testimony struck a chord in both the political and advertising worlds because it suggested that Zuckerberg’s company has systemic issues—in her words, that “over and over again, it chooses profits over safety”.
Does Mendelsohn recognise that picture? “No, I absolutely do not,” she insists. “Our job is to make sure people feel good about the experiences that they have on [the platform]. We make our money from advertising and advertisers are very clear that they don’t want their ads next to harmful or angry content and we don’t want it on the platform either.
“We have got very clear rules about what is allowed and what isn’t. I just don’t agree with the characterisation of what [Haugen] said. I don’t recognise the company that she is talking about.”
However, some of the leaked documents that Haugen has released paint an unflattering picture. Instagram made body image issues worse for one third of teen girls, according to one piece of internal company research that came to light because of Haugen. According to The Wall Street Journal, which worked with the whistleblower, that demonstrated “Facebook knows its platforms are flawed”. Meta strongly denied that, pointing out its research found Instagram made girls “feel better” in 11 out of 12 areas and boys in 12 out of 12.
Mendelsohn maintains that “some of the accusations about why we do research” are unfair. “We do research because we care. We want to learn about where there are issues, so that we can adjust and then act accordingly and continue to make investments in a different way,” she says, citing its Oversight Board of external experts. “Our systems now are the most effective at reducing harmful content across the industry.”
The company’s AI and machine-learning systems, plus 40,000 moderators, are removing “billions” of pieces of hateful content and fake accounts and catching the vast majority of that content “before it even hits the platform”.
Facebook’s latest community standards enforcement report showed it has been removing “more and more” hateful content and the volume that makes it onto the platform has dropped for the past four quarters. “We’re now at a point on prevalence where for every 10,000 posts, a person could potentially see three [that are inappropriate],” she says. While she is “not sure we will ever get it to zero”, the aim is to “get that number as low as possible”. The “assertion” that Meta’s platforms are “awash with hate” isn’t accurate, she maintains.
Living with cancer
Mendelsohn has taken on her new role and is working “full-on”, despite living with follicular lymphoma. She had successful treatment to clear the rare blood cancer in 2018, but “it still exists on a microscopic level” and the outlook is uncertain. “It might be 10 or 15 years before it grows back to a point where it compromises me or it might not.”
She has set up a Follicular Lymphoma Foundation to investigate the disease but decided against giving up work or making other radical changes, because “I am really lucky to live the life that I live” and “I love my job”.
Born into a “very tight-knit Jewish family” with a strong “sense of community and charity”, Mendelsohn decided she wanted to get into the ad industry while doing her degree in English and Theatre Studies at Leeds University (she went to the library each week to read Campaign and photocopy articles about the agencies she wanted to work at).
Mendelsohn applied successfully to Bartle Bogle Hegarty as a graduate trainee. Jobs followed at Grey London and then independent shop Karmarama, where she was executive chairman, before being head-hunted by Facebook. “I love agencies. It’s where I learnt my craft, I learnt my skills,” she says.
Mendelsohn’s move to the media-owner side coincided with a power shift from agencies to the platforms. Some big creative agencies have struggled to shift from making big-brand TV work to producing the high volumes of short-form content required in the social media age, while media agencies risk being by-passed by clients, which can buy direct from the platforms.
However, Mendelsohn says she sees agencies adapting and “embracing” commerce, creators and the metaverse. “Going back to the Mad Men days, agencies have always made sure they’ve adapted—they’ve embraced technology, they’ve found ways to stay relevant. It’s probably the most exciting time to work in an agency.”
She adds agencies act as “critical friends” and “a great collective voice for advertisers and they help us to shape our products and services”. (Facebook will also make clear its private displeasure at some of that criticism, according to agency executives who have been on the receiving end.)
Is Facebook good for the world?
Mendelsohn’s role will mean a higher level of exposure at a time when scrutiny of Facebook is relentless and likely to intensify. But if Zuckerberg’s company can maintain revenue growth and keep rivals such as TikTok at bay, investors may stay loyal.
However, for many advertisers and political and civic leaders, there is a bigger, existential question: is the existence of Facebook good for the world? The mere fact that this is asked—by advertising insiders, speaking privately, and ethical brands such as Patagonia and Lush, which won’t advertise on the platform—says a lot about the company’s standing.
Mendelsohn herself is in no doubt. “I absolutely believe that Meta is good for the world… I look to the $5bn that has been raised by people on Facebook and Instagram for charitable causes, the 100 million people who use our blood donations, the 160 million people that use safety check, the fact that in the pandemic we were able to communicate with one another through the platform,” she says, adding she also loves being able to see friends and family.
If Mendelsohn ever tires of ad sales, perhaps she could give Clegg a run for his money as Meta’s top spin doctor.
(This article first appeared on CampaignLive.co.uk)
7 months ago| article