Q&A: Facebook's Steve Hatch on rebuilding trust and the influence of the UK ad market

He also discussed how brands can leverage the increasing popularity of sister app Instagram and – crucially – how Facebook has been working to regain following a series of data breaches that have dominated the headlines this year.

Congratulations on winning The Digital Individual of the Year prize - where will you keep your award?

Thank you, and a special thank you to your readers for my nomination. Being named Digital Individual of the Year is quite something. I'm truly flattered. However, I can't accept this without acknowledging that it's really the work of the team at Facebook that deserve this recognition, so I'll find somewhere suitable for it in the office to represent us all.

What would you say has been the most significant development in digital advertising this year?

In a word: responsibility.

This is all about the rebuilding of trust between people, advertisers, and the digital economy that is in many ways fuelled by advertising. There is no doubt that this past year has meant that the relationship between people and their data, and the trust in anybody using that data, has become paramount.

People have expectations that their data is both safe and free from misuse, and it is also paramount that people have a clearer understanding of the controls that they personally have on their data.

Many people see that value. Just recently when I was on a BBC Newsbeat live Q&A, the first question was: 'I understand that my browser history is tracked and that means I get to see more relevant ads, which is a good thing. However, I want to know all of the data that you have available to me?' People want greater transparency, greater openness, and above all for us as an industry to take a step-up and lead.

It’s been an incredibly difficult year for Facebook. What has your own role been within the business such events like Cambridge Analytica and the recent data breach? How will Facebook aim to regain trust with users going forward?

Undoubtedly there has been a breach of trust this year. We have a responsibility to 2 billion people to provide a safe environment to connect and share the things that matter to them, and part of my role is continually working to ensure we live up to that. Tackling this is some of the most important work we're doing as a business right now.

Trust is earned every day by our actions, and we have to demonstrate to both marketers and the people on our platforms how seriously we take their trust.

We shouldn’t underestimate just how influential and important the UK is in the advertising market. Both creatively and strategically, and increasingly global in it’s voice with organisations such as the World Federation of Advertisers (WFA) and also the Media Rating Council (MRC).

That means that in tough times, it’s very important for us to have close relationships with the industry, whether that’s through the Advertising Association (AA) or the Incorporated Society of British Advertisers (Isba), or the Institute for Practitioners in Advertising (IPA) or the Internet Advertising Bureau (IAB) – all close partners to Facebook as a business but also to me personally.

In the days after Cambridge Analytica I was presenting to the president of Isba, Phil Smith, on the actions that we immediately instigated directly afterwards, followed by a Townhall with an open invitation to all ISBA clients. We have recently just conducted a six month update. Principally, this is about an openness and transparency and making sure that we are living up to that expectation people and our partners rightly hold us to.

Yes, it has being a challenging year for us, but it’s also been a year where we have been very proud of many initiatives and so many of the actions that have taken place with the company on our platforms.

Whether that is the thousands of women that have participated in #SheMeansBusiness, which aims to train 50,000 female entrepreneurs this year, the number of large and small businesses that use our platform and have been able to bring on new employees thanks to growth driven by Facebook and Instagram, or the inspiring communities that are using our platforms, from Help Refugees through to the Grenfell community.

These experiences don’t always capture the headlines, but they are reflective of most people's experience on the platform each day, and are indicative of just what could happen when one person has an idea and builds a community around that idea to make things happen.

What single development would you predict to happen over the coming 12 months in the digital ad sector?

It's not a particularly counter-intuitive answer, but if you're not thinking about Stories, you should be.

Unquestionably the biggest impact of the past year has been the rise and rise of the Stories format. At Facebook, we anticipate this will become the dominant way that people share. From Instagram to Facebook, from Messenger to WhatsApp, this is the format of the present and the future. Brands that get this right will be in a very strong position.

Instagram continues to grow in popularity - what is it about the platform that users, young and old, are enjoying most? And how are you advising brands to better use it?

Am I excited about what Instagram is doing? Absolutely. It's a hugely exciting platform for us and for marketers, and we're super excited to see what the future holds here. This quarter we reached an important milestone, and we now have more than 1 billion active users on Instagram. It has been an amazing success, and it's bonkers to think that when they joined us they were a team of just 16 people.

For me the most powerful thing about Instagram is its global community, and the kind and supportive individuals who connect online through the platform. People go to Instagram for passions, and brands are crucial to this.

It's important to remember, when people come to Instagram they are in a mindset of discovery. They use it as a shop window and come from all over the world to be inspired, so content from brands must seek to help them do this, not just push products.

We're building tools for both businesses and their followers to get the experience just right, and we're doing it at pace. So my advice would be to experiment and adapt, and consider the whole opportunity in terms of direct response and brand building. Still, with the choice available to marketers, it's more important than ever to remember the importance of leading campaign planning with strategy and objectives. When execution leads, we’re on the wrong track.

How do you foresee Facebook and publishers working together better in the future from your point of view?

Publishers play a vital role in building informed societies. We want to support credible, reliable journalism on Facebook and we work closely with publishers in a number of ways.

We've recently worked to help more partners monetise their premium video content through ad breaks. And we're continuing to test subscriptions Instant Articles, whereby publishers keep a hundred per cent of the revenue.

We also regularly visit newsrooms to train journalists on digital skills. And, importantly, we work together with our news partners to offer people more information and context about the stories they read on Facebook to improve media literacy.

What’s your advice for anyone entering the digital advertising sector?

I think the advice to anyone in the “digital” sector is not to think of yourself necessarily in the digital, but to think of yourself as being in advertising. What does that really mean? It means understanding marketing strategy, it means understanding clients objectives, and it means understanding what they are trying to do. Only then, does it mean understanding how digital can play a role in that.

That said, undoubtedly the future belongs to practitioners. I think the more people have an understanding of platforms and systems, and can relate those back to the clients' objectives, you have the greatest chance of success.

But let's always, always remember the wise words of the economist Theodore Levitt: “People don’t want to buy a drill, they want to have a quarter inch hole.”

People don’t necessarily want to buy digital advertising, what they want to do is drive their market share from X-to-Y, or increase the loyalty to their brands from A-to-B. Anyone that's able to understand that and combine that with a deep understanding of how digital advertising is able to do those things then you are very well set.

The full list of winners from The DADI awards can be viewed here, while The Drum Digerati - a list of 100 outstanding digital professionals for the year - of which Hatch was named top, will be published online throughout this week.