Facebook's most important exec outside the US talked to us about how the site is still cool among teens and why she's not afraid about the rise of ad blocking
Mendelsohn was among the recipients in the Queen's birthday honors list, and was awarded for her services to the creative industries. Alongside her day job at Facebook she is also co-chair of the Creative Industries Council, a joint forum between the creative industry and the UK government.
She was "surprised" when she first received her royal letter in the post and says she still has no idea who nominated her for the honor (anyone can nominate, and nominations are reviewed by various government departments.) Regardless, her mom is "absolutely thrilled" and while Mendelsohn says she probably won't be adding "CBE" after her name, she is a grateful recipient.
We also met with Mendelsohn ahead of another major landmark in her career. This week she celebrates her two-year anniversary at Facebook, having joined the company from London-based ad agency Karmarama, which she founded in 2008.
Mendelsohn, who has spent the last two years out on the road meeting and building teams across Europe, the Middle East, and Africa, told us about some of the nuances of the huge market she is responsible for - the ubiquity of mobile payments in Kenya and women in Saudi Arabia using Facebook to export goods, for example.
Speaking of women, she's a huge champion of diversity in the workplace, and told us about some of the initiatives she has been running within Facebook to promote equality.
Mendelsohn also countered the accusation often thrown at Facebook that it is losing its appeal among teens, with some evidence from her own "sneaky focus group." And she gave us her opinion on one of the biggest threats to digital advertising right now: the rise of ad blockers.
Below is a lightly edited version of our conversation.
BUSINESS INSIDER: It's hard to believe it's been two years since you joined Facebook, but time obviously flies and you've clearly achieved a lot since then.
NICOLA MENDELSOHN: It definitely does! It literally was two years ago this week. Or as we call it here, my "Faceversary."
BI: So what do you do on your Faceversary?
NM: I don't know! I'll let you know. People will send me lots of nice messages on Facebook.
BI: And cupcakes and things?
NM: I hope so!
BI: So tell me a little bit about how your role has changed over that time. You're still in the same role, but I imagine what you're doing now is vastly different from two years ago.
NM: Well in some ways it has but in some respects there are a lot of similarities.
I mean there's a huge number more people that have joined the Facebook platform, and since then Facebook has changed as a business. Now we're a whole family of apps and services. We didn't have advertising on Instagram then. Instagram then was 100 million people, now its's 300 million people.
Facebook has grown. If I think about the UK, it's grown from 33 million people to 37 million people. So you can see the growth in people coming on and spending time with us. We also didn't have WhatsApp, we didn't have Oculus, we didn't have Messenger broken out.
So it's changed quite a lot in a short period of time. But probably the biggest change we've seen, and I've seen, is the speed of mobile adoption in that period. Which I think nobody could have predicted quite how quickly people and businesses are transitioning more and more time spent on to mobile, because that's how much time people are spending on mobile.
BI: And what about the actual business set-up here? You've had an office move (from Covent Garden to Euston) recently. Have you added more people? Has the mix of people changed?
NM: More people have joined in London but also in other parts of the world. That's been exciting and we've obviously hired more people.
So when [you last interviewed me, back in 2013] Steve Hatch (Facebook's UK and Ireland director) hadn't joined - it's fantastic to work with Steve. Recently, I hired two more people, Ari Kesisoglu (director of Turkey, Israel, Middle East, and Africa) and Paolo Bonomo (director of Benelux, France, Spain, and Italy) who are two of my direct reports as well.
BI: You travel at least once a week across the region you are responsible for. Back when you first joined, the Middle East and Africa were almost unchartered territories from a commercial point of view. How has that region grown over that time?
NM: Every week I'm in a different country and that's brilliant because I can get to spend time with our clients, I get to spend time with our teams, and really learn on the ground how we're helping businesses grow, and seeing the work and people. I have spent a lot of time in the Middle East and also in Africa doing the same thing: listening, talking, and learning. What we're seeing is really exciting.
In the Middle East and Africa now we are up to 191 million people that are coming on to Facebook. Eight-five percent of them are coming on through mobile and that's a massive change. We're seeing that increase of people coming on to technology who have never been using technology before, and in many ways Africa is a mobile continent. In some ways Africa is far more advanced than we see in the UK.
I was in Nairobi, Kenya, earlier this year and their whole payment system there is mobile. M-Pesa is unbelievable. So you can be walking down the streets of a market, and the market will be no different to something that you could have been in a thousand years ago, but everyone is trading by using their mobile phone. And you kind of go, "well how come I can go shopping on the streets of London and it's unfathomable [to be able to do that]?" So there's a lot we can learn from being over there.
But we are also seeing some really sophisticated use of advertising over there in terms of how people are utilizing Facebook and Instagram as well. So we have set up the Creative Accelerator program [which helps brands and agencies make their ads work on every mobile device and connection] as one of the areas to really help with that.
In Kenya in particular we did some great work with Coca-Cola, which was a way of really harnessing the power of the creativity of the platform and how you can tell stories at scale in a different way, never mind what the device is, you can adapt it to the device. So that was good to be on the ground to understand and see, and in the Coca-Cola case there was an 18% increase in brand recall.
BI: In terms of how people use Facebook or indeed the wider internet, what are people in developing regions doing better than we are already, perhaps because they're not being held back by archaic ways of using technology because they skipped it and went straight to mobile?
NM: On the Kenya trip we met a woman called Isabella who was utilizing the Instagram platform to sell dresses: she has a fashion business called Fashion 254. Now we haven't even got an Instagram advertising product in that market yet, but she's finding ways to be creative.
Similarly, in Saudi Arabia, I met with a number of female entrepreneurs through an organization called Glowork, and they're utilizing Facebook to sell through. There are very different rules and laws within that country and they have found the internet as a way of connecting to the world. They have found Facebook as a way to connect with their friends, families, businesses they are interested in. So what they talked about was that Facebook gave them a gateway to the world that they wouldn't have had otherwise - [and also using Facebook as a vehicle to help export their goods overseas.]
BI: A lot of your ad products in regions like Africa, the Middle East, and India are aimed at users with feature phones, who may not have good - or any - internet connection. I was at Mobile World Congress in Barcelona in March when Mark Zuckerberg was speaking, and he was very adamant that Facebook and Internet.org [Zuckerberg's initiative to connect developing countries to the internet for free] are two very separate things. But at the start it didn't really seem like that, it seemed like Internet.org was a very much Facebook-led program. Do you personally get involved with Internet.org still, for example, or is it simply not under your job description?
NM: So I'm certainly very passionate about it because it's part of the Facebook mission, to make the world more open and connected, so that people can share more. One of the barriers to doing that is the lack of connectivity in some parts of the world.
Internet.org is a collection of different groups, organizations, NGOs, that have come together to try and bring connectivity to the world. So one of the things that will be part of the Internet.org initiative is the Facebook app that comes on. Why? Because if you try to explain what the internet is to people, it's very complicated. Whereas if you say would you like to connect with your friends, then that's much more simple. But they are kept very, very separate.
BI: When you look at the differences between the US and Europe for Facebook form a commercial perspective, there still is a massive discrepancy there. ARPU [average revenue per user] in the US and Canada is more than double Europe. But yet we do have quite a sophisticated ad market here, even if advertising on Facebook launched here later. What kind of work are you doing to close up that gap, and is that a priority for you?
NM: Actually, my biggest priority is making sure our clients are getting the best return on investment they can make. That is the only thing I care about. I do not want to take a single pound, euro, or sheqel from a client if it doesn't give them a strong return.
And one of the big changes we have seen is the investment that we've made on the measurement side so we can really demonstrably track the impact Facebook advertising is having. And it is. Across all of the measures that any client or agency would measure by, Facebook is being proved to contribute very significantly to the bottom line across all verticals and across all countries.
So that's the thing I care about, that's the thing that all the people are here are working on is: What are we doing to change the business [for clients]. It's just as simple as that.
BI: One of the first big changes you made early on was launching the first ever Facebook Women's Conference. How is that working out?
NM: We have carried on with that. Diversity in all of its guises is massively important here, and to me personally as well, as you know. We now have an annual Women's Leadership Day. All the women come from EMEA and I made a pledge in December that for the next year, wherever I went, I would do a women's event - either for women in the office or for women and external people, whatever the office wants.
Last week I was in Italy and we sat with two women who had been small business entrepreneurs. One of them had built their business Buru Buru from a team of 12 people in three years selling Italian product, I mean who doesn't love Italian produce to be honest - the fashion, the design? And they were sharing their story with us. Men and women came to that but it was designed to be billed as a women's event.
I took all the women in the office here to the House of Lords and we had a very inspirational speech from [Mediacom UK CEO] Karen Blackett [OBE] who was incredible and she wowed us all.
Then for International Women's Day, all the offices in the region held different sorts of events. The event we did here was [in conjunction with] Theirworld, a charity run by Sarah Brown [also the wife of former UK Prime Minister Gordon Brown] which campaigns for free education for all children around the world, girls and boys. Lorraine Candy [Elle editor in chief] was also involved. Also some inspirational young women talking about setting up businesses through different programs like Apps for Good and that was amazing. We had about 250 women who came to that event.
BI: Lots of different initiatives there. What kind of impact do they have on the business?
NM: I think it gives women, specifically on the women point, but across any of the areas we are talking about, I think it gives people the confidence that this is a company that's interested in people for their whole selves, that's there to help people progress, and to do so in an environment that's conducive to to whatever their needs, wants, and desires are.
All business today is about having the best people, attracting the best people, keeping the best people, and I think the more that you look at people as their whole lives the better.
BI: You'll have seen recently Tom Knox, the new president of [UK advertising trade body] the IPA, put forward his agenda for the year recently. And one of the initiatives he's pushing is for every advertising agency in the UK to publish their employee gender diversity numbers, to be displayed in an annual league table. What do you think about this? Do you think it's a positive thing for businesses?
We are very conscious [of diversity] here. One of the outputs I think we've seen is that we do have more women in senior positions now. Some of the senior hires I've made recently are women. And I think it's important that companies know where they are, where they stack up, and therefore what kind of plans they might need to put in place to bring in a more diverse workforce.
Why does that matter? Why does that matter here? Because if we are looking after 1.4 billion people, then you want to be sure that the people looking after those people are reflective of those people. Because people think in different ways. Men and women do think differently in different respects. And so we want to be making sure that the platform we are creating best reflects the people that are using it. But I think that's true for any business. I think it's a global issue that is true for every business, including Facebook. We're not happy with our numbers either.
BI: One of the other things you introduced not long after you joined Facebook was the first "Facebook client council" outside of the US [made up of senior UK marketers from both brands and agencies to give Facebook advice on how it can build out a better product for them.] Where are you at with it now?
NM: We now have a number of councils: The UK client council, which Steve Hatch is running, I have the EMEA council, and we're meeting in Cannes - can you believe it's going to be my thirteenth Cannes! Which is very exciting, I love Cannes! - we are also going to be setting up a creative one as well. And it's something we've carried on around the world. We now have an India one, a Brazil one, and a global one.
BI: And these councils give you brutal, honest feedback about what's working for Facebooks and what's not. What kinds of discussions have been coming up recently? Back in 2013 those were around advertising measurement, but I guess those conversations have moved on a bit now?
NM: First of all, I'm incredibly grateful for the time they give to us because they definitely make us better, and they have influenced the product and changed the product as a results.The insights they have provided, their needs and desires [outside of the US] have absolutely [influenced product decisions in Menlo Park.]
The biggest focus I think at the moment is on creative. With these incredibly rich canvases that we have - and the fact that video on mobile has just exploded in the last year. We've gone from 1 billion video views to 4 billion video views a day [on both desktop and mobile on Facebook.]
They ask: can we make the work better? We want to tell stories at scale on this rich creative canvas, what can you share with us, teach us? And, vice versa: What's working well for them? How we can improve? Those are some of the areas that are really making a difference.
So you see campaigns like from [UK mobile carrier] EE [its marketing director, Spencer McHugh, sits on the UK client council] with Kevin Bacon where they created very bespoke different pieces of film especially for Facebook which made a demonstrable difference to their business.
BI: The next EMEA council meeting is being held at Cannes, the biggest advertising event of the year. What has Facebook got planned there?
NM: Cannes is incredibly important to us and it is one of my favorite weeks of the year. It always has been. It's a week of inspiration and all about creativity. Given my background, it's something that speaks to every fiber I have in me.
We will be talking a lot about mobile and that big shift, because it's something that clients want us to talk about, we'll be talking about creativity at scale on both Facebook and Instagram, and we will be down the "Hackaway," our space this year. There we'll be looking to hack some of the questions people have got for us, to share best practices we are seeing at the moment.
We will also be saluting the winners of the Facebook Creative Studio Awards. It was a record year for entries, and a lot actually from the emerging markets, which is really exciting to see. [There was also a] 70% increase in video submissions coming through.
I bet you a lot of that work will also win at Cannes. [The Facebook Creative Studio Awards] are sort of becoming like the BAFTAs to the Oscars, you can see what's coming on the shortlists going forward.
BI: One of the things I'm really looking forward to seeing at Cannes is Snapchat CEO Evan Spiegel, who is delivering a keynote. Snapchat has a user base of very engaged millennials, and that's why they can command these huge advertising rates for what is very un-targeted advertising.
I haven't heard the Facebook and teenagers question being asked very much recently publicly but it's something that always comes up in conversation. You're growing your audience massively, but teenagers are being swayed by other apps. So the "Facebook losing its cool among teenagers" argument, is it true? Is it not? Are they still engaging with Facebook as much as they were? Are your new users millennials, or older people?
NM: I think [our new users] are everybody [of all ages]. I have my own sneaky focus group: Three of my four children are teenagers. They are definitely still on Facebook, very much so.
Why are they there? Because they are their real selves. The personal identity is absolutely crucial to them. So if you [as a teenager] want to have a night out, and see all your friends, and discuss where you're going to go, what you're going to wear - and I'm telling you that's what teenagers do because I watch it quite a lot - they do it on Facebook.
Now, do they do other things? Of course they do, they're teenagers. They experiment, they go to other places. They spend a lot of time on Instagram. We see a lot of young people coming on to Instagram. And, of course they use other things, that's what teens do! But we have very high usage with teenagers on both Facebook and Instagram.
BI: The big debate started after Facebook admitted in its annual report a couple of years ago that usage was going down among teenagers. Was that just an anomaly at that time?
NM: We haven't released anything else.
BI: I wanted to get your thoughts on something that has been sparking a lot of debate in the advertising and publishing industry over the past couple of months: The rise of ad blocking. There have been lots of interesting movements in this area recently: The launch of the Adblock Plus Android browser which can apparently block Facebook ads, a carrier-backed plan to block ads at a network level, Apple looks like it is going to allow ad blocking on iPhones, and so on. What's Facebook's or your personal stand on the rise of ad blocking?
If you have conversations with people, one of the things that has linked us as a common experience has been the advertising we've enjoyed throughout our lives. When advertising is relevant, humorous, entertaining, informative, helps you to discover, it's the most amazing thing in the world.
We're all heading off to Cannes, and we're again about to see the most amazing advertising in the world, which, for me, has always been an inspiration. And that's one of my definite things to always do at Cannes: To ensure I look, study, and understand what is the best of the best of the world at the moment. There's always something you learn from it. And usually there's something being bought as a result. So I love advertising.
BI: So does the advertising industry, then, need to do a better job to say how great advertising can actually be to change the mindset of the ad blockers' users?
NM: You'll have to speak to [IPA president] Mr Knox about that!
* We also asked Mendelsohn whether she had any response to the news that Facebook is being taken to court by Belgium's privacy commission because it allegedly violated European privacy laws by tracking users on other sites via its "like" and "share buttons", but at the time, she declined to comment. We are awaiting a response from a Facebook spokesperson.