New Facebook office shows it means business in Africa

But the announcement that Facebook is to open an office in South Africa has brought the other face of the company into sharp perspective for local users. That is the business end of Facebook, and the massive money machine that has been built around advertising on the social network.

The ads are often subtly integrated into the Facebook layout, or simply comprise ordinary-looking content that is “boosted” to reach tens of thousands of Facebook users instead of just the few hundred followers of a company page.

As a result, users are barely aware that their use of Facebook makes it possible for the network to generate billions of dollars from advertising. In the first quarter of 2015, that amounted to $3.5-billion (about R43-billion). Of that, mobile advertising made up no less than 73%.

By March 2015, Facebook had 1.44 billion monthly active users, of whom 120million were in Africa – and that figure had grown by 20% in six months. Little wonder Facebook decided it was time for a local presence.

With Africa making up almost 10% of total users, and South Africa in turn making up 10% of the African user base, Johannesburg was a logical choice for the company’s African headquarters.

“It’s going to make an enormous difference,” says Nicola Mendelsohn, Facebook vice-president for Europe, Middle East and Africa. “By having a business office that is open here, we are going to find new and exciting ways that business can embrace the platform to reach new customers that matter to them, and get greater returns from their marketing.”

Mendelsohn says Facebook is also making a difference in job creation.

“The jobs will come from where you might not expect. We’re finding that most of the jobs are being created among small and medium businesses.”

In February, she visited Kenya on a “market learning” trip, and met a former model running a business called Fashion 254, built almost entirely via Facebook. The store is tiny but, by sharing images on Instagram, persuading customers to purchase in-store and online through Facebook, receiving payments through mobile money, and keeping in touch through WhatsApp, she has built a global digital business – and employs eight people.

It’s a story that’s being repeated over and over.

“We see businesses across Africa using Facebook, and creating different jobs from the ones that might be expected. The key is that Facebook allows businesses that previously could only advertise in their own immediate areas to advertise across a city, state and country – and even across the world.”

According to a Deloitte report, Facebook has enabled $67-billion of economic impact and created 1.4million jobs across the Europe, Middle East and Africa region.

“It’s almost like a democratisation of business communications, because small businesses now have access to the same advertising tools as big corporations. By highlighting success stories, we can inspire other people to use the platform. Having people on the ground allows us to uncover such stories. I know there are so many more.”

Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter @art2gee