Facebook eyes Asian advertising dollar

U.S. social networking giant appoints Singapore-based advertising sales representative in a bid to capture regional advertising dollar.
Written by Victoria Ho, Contributor

Facebook is reaching out to advertisers in the region, and has appointed a Singapore-based company as a sales representative.

ihub Media announced the partnership Tuesday, saying it will market a range of additional advertising formats to customers that are not available to "walk-in" advertisers in the region--those who create "DIY" advertisements via Facebook's site itself.

These include banner advertisements and embedded videos in the site's side bar. Currently, "DIY" ads come in the forms of inline text advertisements and smaller boxes on the side bar, which ihub said are less eye-catching.

ihub could not disclose the financial details of the agreement, but said the partnership will provide Facebook with direct contact in four countries: Singapore, Malaysia, Indonesia and Taiwan.

George Foo, ihub COO, said in an interview with ZDNet Asia, the company was in talks with the U.S. social networking giant for eight months, and has already signed a first "regional" client for the platform.

With a larger base of regional companies headquartered in Singapore and Malaysia, Foo said these two countries will likely bring in higher sales, but noted that the reach of such advertisements will extend to users of all four Asian countries.

Mike Murphy, vice president of media sales, Facebook, said: "We are very excited about how this relationship will enable even more marketers in Asia to forge trusted connections with consumers."

Foo said Facebook's audience of working professionals is expected to attract a greater proportion of luxury brand advertisers to come online--a shift from today's online advertisers who tend to target a younger age group, he said.

Foo also said ihub has received interest from various business-to-business (B2B) entities such as IT and aviation companies wanting to advertise on Facebook.

"With only 2 percent of advertising spend in Singapore going on Web sites, there is huge opportunity here," said Foo.

He noted that advertiser adoption of online media in the region "lags" behind that of consumers, where "online users are growing at a faster rate than advertisers".

He attributed the gap to two factors: a lack of qualified online advertising sales representatives and the need for Asian advertisers to be educated on the pros and cons of taking out an advertisement online.

"Many have unrealistic expectations," he said.

JPMorgan, however, predicted in a recent research note, the current financial slowdown will take a toll on the online advertising industry. Its original forecast of 28 percent was lowered to 25 percent for this year, with next year expected to grow at 13 percent, compared to an earlier forecast of 19 percent.

According to comScore statistics, Facebook's overall visitor count grew 153 percent as of June 2008. In the Asia-Pacific region, the growth was 458 percent.

Rival social networking site Friendster, however, claims it has the biggest Asian user base.

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