Facebook Inc. has tapped its top Canadian manager to lead a global team that will look for new ways the social network can serve large corporations in key industries – and increase its own revenue.
The move will make Jordan Banks one of Facebook’s most influential strategists as the company looks to increase its share of marketing and advertising budgets around the world.
Mr. Banks will retain his role as managing director of Facebook Canada as he takes on the newly created position of global head of vertical strategy. He will need to figure out how some of the world’s largest brands can use Facebook, either to sell products or to engage with their customers in a new way.
“We want a direct connection between our efforts and a business either selling more stuff, increasing brand awareness, driving more foot traffic or whatever else their objective may be,” said Mr. Banks, who joined Facebook in 2010 and previously ran eBay Inc.’s Canadian unit and JumpTV Inc.
The social network has about 1.1 billion users and 18 million brands trying to reach those users through corporate Facebook pages. It also has a million clients using its service to deliver ads to Facebook users.
All of that activity has translated into rapid revenue growth and sky-high expectations among investors. The company will earn $1.2-billion in profit (U.S.) this year, according to a Bloomberg estimate, but after a summertime rally in its share price, Facebook is worth $116-billion – about as much as Walt Disney Co.
To grow into a valuation that is nearly 100 times earnings, the company needs to tap into big companies with big marketing budgets. Mr. Banks and his yet-to-be-hired team of industry veterans will develop specific strategies for the financial, automotive, consumer products, technology and telecommunications, e-commerce, gaming and travel sectors.
He used the example of the financial services industry, which is “to a large extent driven by credit card sign-ups.”
“Our global domain expert in the financial services space will understand the dynamics of acquiring and retaining credit-card users and suggest ways Facebook can drive those sales,” he said. “If we don’t have a product that exists right now, they can influence the product and development teams to build something to take advantage of that opportunity.”
It’s no mistake that the new division will be run out of Toronto. Canadians are among the heaviest users of Facebook, and Mr. Banks said the California-based company likes the idea of running the operation out of another country given its international focus.
Other social media companies have taken a similar approach. When Twitter Inc. approached Kirstine Stewart to be its Canadian managing director, for example, company executives expressed interest in her background in television broadcasting. In addition to her Canadian duties, Ms. Stewart spends time working with the company’s main office as it works to build a global television strategy.
Facebook’s shares have been sitting at all-time highs following the release of second-quarter results in July that showed the company’s focus on mobile advertising was contributing to rapid growth. Mobile ad revenue was $655-million, or 41 per cent of the company’s quarterly ad revenue of $1.6-billion, helping to push the company to a $333-million second quarter profit.
Chief operating officer Sheryl Sandberg told analysts in July that the company must focus on particular industries to increase profits, foreshadowing the creation of Mr. Banks’ new division.
“Even in the verticals where I think we’ve done very well, there’s a lot of room for growth,” she said. “I think as you think about different industries using the power of online marketing, we see different levels of adoption.
“But I’m a believer that over time, this is where people will be spending their time. And any marketer who’s trying to reach people is going to spend their resources here as well.”