In a freewheeling chat with ET’s Anumeha Chaturvedi and Vinod Mahanta, Mohan talks about India being a focus country for Facebook, the rapid growth of Instagram, digital advertising during the pandemic and how Instagram versus Facebook is panning out.
Instagram Reels has just completed a year in India. How is Instagram’s usage shaping up in India in terms of Reels, Live Rooms, etc.?
Two years back, it was an intentional part of our (Facebook’s) India approach to put disproportionate energy on Instagram’s growth in India. And we have seen it grow quite materially over the last couple of years. Since we have introduced Reels, we have seen massive growth.
The India focus has been an approach for Facebook as a company overall. For Instagram, India has really been used as a testing ground for innovation—given the context of the 700 million people online and a demography that is very young.
India has been the first market where we have tested Reels, piloted it and then finally launched the product. India is one of the focus countries for Instagram Lite—the lighter version of Instagram—and the experience works across devices, platforms and networks. India continues to champion innovation for Instagram. India is clearly a video-first market, and we’ve seen that across Facebook and WhatsApp.
Globally, Instagram is setting the tone for popular culture. And in India too, a lot of the expression of culture comes in the form of video, and short-form in particular. Therefore, I think the growth of Reels has to be seen in the context of Instagram essentially playing a huge role in creating new trends.
We have looked at supporting the emergence of new creators from India who have a global following. We have moved the needle dramatically on that front. Reels and Instagram make it quite easy to have global discovery and followership. In India, there are 6 million Reels being produced every day at the moment.
Were you expecting this kind of explosive growth?
I think it would have been difficult to predict that kind of growth, and it happened on the back of multiple things. During the pandemic, we have seen adoption and increase in usage and engagement on all platforms, and that clearly shows up on Instagram and Reels. And secondly, I think creators first—and people more broadly—have embraced the short form format.
I think the growth is above what we would have expected a year ago.
Instagram Reels was launched post the TikTok ban. With the ban continuing, the India growth would be much more than any other geography?
The reality is that there are quite a few alternatives and in the last couple of years you’ve seen a lot of action, both on the product front as well as investment from venture capital and private equity.
Have we done well? Yeah, we have done well but we have done well in multiple countries around the world. But this is true for the Facebook app, and WhatsApp as well.
The growth in India continues to be quite exciting. We have also gotten the creation tools right. You’re making it easy for creators to find followers, to grow dramatically. And increasingly, you know, we are starting to think about, how do you help these creators, drive monetisation better.
What kind of impact on advertising did Facebook and Instagram experience during the pandemic?
We are seeing marketers shift more and more attention from traditional media to digital media driven by the growth of these platforms, and also increase in the usage and engagement levels. Equally, we’re also seeing that our platforms are naturally geared towards small businesses because of their ease of use.
There is accountability for the amount you spend. You can quite quickly get a sense of how much returns you are getting. We are seeing that there is a lot of entrepreneurship that has been unleashed in the direct-to-consumer sector. They naturally gravitate towards platforms like ours, and that is driving revenue growth as well. Most of us have adopted a more digital way of living in the last 15 months. And that’s showing up in the use of our platform for marketing and advertising, and therefore our revenues as well.
Have you seen the consumer behaviour change on both Instagram and Facebook during the pandemic?
Yeah, I think we’ve seen them spend more time. In a world in which we were not physically connected to our friends and family. The desire to be connected didn’t go away. And therefore, I think social platforms like us cater to that need.
People were using voice calls, video calls and using Rooms because there were limitations in terms of the ability to connect with each other. And since there were mobility constraints, people were also experimenting with discovering products online.
That translated into growth of e-commerce. And also people are connecting with local businesses, or a larger number of digital businesses. All of these factors spurred growth in the digital space even more so than it would have been organically. If we didn’t have the kind of world we had for the last few months.
Are you planning to offer more paid services in India like Google?
If you look at the nature of our products and platforms, you will find we have a deep conviction in keeping these services free to consumers. It’s a way for us to have the maximum utility to people around the world.
The most affordable form of a service like Facebook or Instagram or WhatsApp is the free version. It means that everyone in the world can have equal access to realising the value derived from using the services.
Now, once you make that as a philosophical choice, then obviously, the material revenue stream will be advertising and that’s the case today. Advertising continues to account for a bulk of our revenues, and that’s the case in a model where we are choosing to keep all the services for free. I do think Facebook has opened the world to the possibility that users see value in these ads, rather than seeing ads as disruptive.
Is Instagram cannibalising on Facebook’s growth?
Instagram is growing quite quickly in India. Reels has really helped Instagram to go deeper. Go across geographies. But the reality is that the Facebook app is growing quite strongly as well. People use them for different things: the utility of Facebook is really for friends and family and building communities and groups, while for Instagram it has always bent towards followership of interests, brands and passions.
Has Reels helped you increase the regional connect with the rising popularity of short-form videos?
Absolutely. If I look at the growth of Instagram over the last three years, it definitely is going way deeper into India, way beyond the large metro cities. But again, I think that’s due to the accessibility of a format like Reels where people find it easy to use it as a mechanism of both expression and entertainment. Reels has definitely taken Instagram into different parts of the country, and it has activated multiple creative ecosystems—by language, by different music or fashion or humour.
And what’s the feedback on the test that you initiated—sharing of Reels from Instagram to Facebook?
I think we’re quite excited about the test. The test was essentially for public figures, too, and we’re going to open that to everyone in the next few weeks, So, everyone will be able to share Reels on the Facebook app soon. We like what we see in the test.
So will there be closer integration of the various apps?
If you look at the Facebook and Instagram, they have a very distinct identity. The Facebook app continues to be used primarily for friends and family. And in Instagram, because of its origin, the product energy has been more naturally suited to the followership of interests and passions. The brand and celebrities have always liked it.
The use case is different in Instagram than Facebook which is more focussed on friends and family. But there is an opportunity for us to create for a content creator on Instagram, a way to find and build a larger audience and followership. So we are providing an option to make something like a Reels format on the Facebook app. It’s going to be an exciting proposition for creators.
Large companies and smaller businesses are using Instagram and Facebook differently. What’s surprising is how the smaller businesses have taken to Instagram and Facebook…
A disproportionate number of our advertisers tend to be very small businesses, single person, entrepreneurial outfits that find the apps quite easy to use to acquire customers across geographies.
I genuinely do believe we have helped grow the advertising pie. The biggest role that we play in the advertising space is making it very easy for a new advertiser to come in and start getting value by spending a small amount of money. We are also seeing that there’s a lot more ambition to go international than earlier. With easier access to capital and a great platform to leverage, small businesses are thinking about exploiting global opportunities.
You know the ad tech company, WhiteHat Jr, that moved from launching in India to addressing the US in a matter of weeks. Almost all of it happened on Facebook and Instagram. We’re seeing a lot more ambition to go international and a lot sooner, which again is great for the entrepreneurial ecosystem in India. The larger companies are definitely thinking much harder and much deeper about what parts of the traditional model have to change. Across sectors many large companies may have thought of digital transformation as something to be done, three years from now, but it’s all become more urgent. More here and now.
What about ads on Reels? These are early days but how has the initial interest been from advertisers?
Very early days but we like what we’re seeing. We want to do it carefully. So right now the ads on Reels are essentially up to 30 seconds, vertical ads. And I think there’s going to be a period of experimentation. We have to get it right in the context of the consumption of Reels.
Do you find ad agencies focussing more on digital now or are they still trying to find a balance between traditional and new media?
Ad agencies have had a focus on digital for quite a while, right. I think that focus and energy has shifted even more dramatically in the last 24 months. The ad agencies are leaning in. They understand power of digital, they understand that their clients are looking for more help, and they are steering marketing, energy and focusing more on digital.