Facebook Defies China Headwinds with New ad Sales Push

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Facebook Inc. is setting up a new engineering team in Singapore to focus on its lucrative China advertising business, according to three people familiar with the effort, even as chief executive Mark Zuckerberg ramps up criticism of a country that blocks the social network.

The team at Facebook’s Asia-Pacific headquarters is tasked with developing better ad-buying tools for Chinese customers who have to work around internet restrictions in China known as the “great firewall,” the sources said.

Reuters reported that one of the people described it as Facebook’s first significant attempt at developing regionally localised ads tools outside of its Silicon Valley headquarters, where China-related engineering work previously took place.

Facebook confirmed the creation of the new team, describing it as having an “Asia-first” mission and consisting of both product and “business integrity” sub-teams. Its existence has not previously been reported.

A spokeswoman said the team would serve, “Asia as well as our global advertisers.”

Facebook sells more than $5 billion a year worth of ad space to Chinese businesses and government agencies looking to promote their messages abroad, analysts estimate. That makes China Facebook’s biggest country for revenue after the United States, which delivered $24.1 billion in advertising sales in 2018.

Zuckerberg once hoped Facebook could find a way to operate its social network in China, making a high-profile visit to the country in 2016 and vowing to learn Mandarin. Product managers went on “knowledge-exchange” trips to China, swapping expertise on app features and advertising tools with counterparts at companies like Tencent and Alibaba, one source said.

The company’s China dreams were ultimately dashed by ever-more-restrictive Chinese government internet policies, compounded by political and business tensions associated with the U.S.-China trade war.

But Facebook remains eager to expand its China ad business, which boasts customers in industries including fashion, social media and gaming. With Beijing aware its businesses must operate beyond the “great firewall” to grow, Facebook is positioning itself as the conduit for them to reach global audiences.

“Facebook is committed to becoming the best marketing platform for Chinese companies going abroad,” Facebook wrote in Chinese on local social network WeChat in November.

Bytedance, the parent company of social media sensation TikTok, used Facebook’s advertising tools to do exactly that.
In late 2018, the company surged app-install ads on Facebook’s ad network, becoming its biggest Chinese customer as it grew TikTok’s footprint, a former Facebook employee said.

It cut back drastically in 2019, to nearly nothing, according to previously unreported data from research company Sensor Tower. One source said
TikTok calculated it had reached most people likely to use the app, so it shifted to building an ads business to compete against Facebook’s