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WHEN: Today, Tuesday, September 27th
WHERE: CNBC's "Squawk Alley"
Following is the unofficial transcript of a CNBC interview with Facebook COO Sheryl Sandberg on CNBC's "Squawk Alley" (M-F, 11AM-12PM ET) with Julia Boorstin today, Tuesday, September 27th. Following is a video link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000554525.
All references must be sourced to CNBC.
JULIA BOORSTIN: THANK YOU SO MUCH. SHERYL SANDBERG THANKS FOR TAKING TIME FOR US AT AD WEEK. YOU'RE ABOUT TO GO OFF AND MEET WITH PROCTER & GAMBLE AND GM BIG ADVERTISERS BUT HOW DO YOU EXPLAIN TO ADVERTISERS THAT FOR TWO YEARS YOU INFLATED MEASUREMENT FOR HOW LONG PEOPLE ARE WATCHING VIDEOS ON FACEBOOK?
SHERYL SANDBERG: OUR SUCCESS IS DEPENDENT ON GROWING THE BUSINESSES OF THE COMPANIES WE WORK WITH LIKE P&G, LIKE GM. WHAT HAPPENED IN THIS CASE IS ABOUT A MONTH AGO, WE REALIZED THERE WAS A MISTAKE IN HOW WE WERE CALCULATING ONE OF OUR VIDEO VIEWING METRIC. IT WASN'T HOW WE WERE CHARGING ADVERTISERS. IT WASN'T THE METRIC WE WERE BILLING ON. STILL WE TAKE ANY MISTAKE REALLY SERIOUSLY AND TRUST IT SO IMPORTANT. AS SOON AS WE FOUND THE MISTAKE, ABOUT A MONTH AGO, WE WENT TO ALL OUR CLIENTS, EXPLAINED IT AND FIXED THE PROBLEM. WE ALSO BELIEVE VERY STRONGLY IN THIRD-PARTY MEASUREMENT. WE'RE NOT JUST SIMPLY GRADING OUR OWN HOMEWORK BUT OTHER PEOPLE CAN VALIDATE METRICS. WE WORK WITH A BROAD VARIETY OF PARTNERS.
BOORSTIN: WHAT ARE YOU DOING TO REASSURE ADVERTISERS THAT THERE AREN'T ANY OTHER DISCREPANCIES WITH THE METRICS AND THAT THIS WON'T HAPPEN AGAIN?
SANDBERG: WELL, WE CAN NEVER PROMISE THAT THERE WILL NEVER BE ANOTHER MISTAKE AGAIN BUT WE CERTAINLY DO ALL WE CAN TO GET ALL OUR METRICS RIGHT AND REALLY WORK ON MEASUREMENT. THE MOST IMPORTANT THING TO OUR CLIENTS IS THAT WE MEASURE ALL THE WAY THROUGH SALES. WHEN YOU THINK ABOUT WHAT ADVERTISERS HAVE LOOKED FOR AND MEASURED, WHAT THEY'VE ALWAYS LOOKED FOR IS WHO SEES THEIR ADS, HOW ARE THEY SPENDING THEIR AD BUDGETS AND IS THAT MOVING PRODUCTS OFF SHELVES, DRIVING CARS OFF LOTS? SO WHAT WE'RE WORKING ON IS ALL OF THAT MEASUREMENT SO THAT WE CAN GO ALL THE WAY THROUGH FROM WHAT SOMEONE SEES TO THEIR PURCHASES. AND THAT'S WHERE WE'RE REALLY FOCUSED.
BOORSTIN: YESTERDAY, THE CEO OF ONE OF THE MAJOR AD CONGLOMERATES IBG SAID THAT HE THINKS THE WHOLE DIGITAL AD INDUSTRY NEEDS TO BE MORE TRANSPARENT DO YOU THINK THERE'S A TRUST ISSUE?
SANDBERG: ANY TIME THERE'S A SHIFT IN PLATFORM YOU HAVE TO ESTABLISH NEW METRICS AND NEW WAYS OF WORKING WITH THAT PLATFORM. IT'S SO INTERESTING IN A COMPANY LIKE P & G IS A GREAT EXAMPLE. THEY'RE 175 YEARS OLD. THEY'VE WATCHED ADVERTISING MORE FROM PLATFORM TO PLATFORM TO PLATFORM. THE FIRST TV ADS, PEOPLE LITERALLY STANDING AT MICROPHONES READING THEIR RADIO ADS THAT WASN'T SHIFTING A PLATFORM. AND WHAT WE SEE IS THE BEST ADS ON SOCIAL MEDIA ARE REALLY CREATED FOR THE SOCIAL MEDIA, FOR THE SOCIAL MEDIA ENVIRONMENT.
BOORSTIN: NOW THIS MEASUREMENT ISSUE COMES AT A TIME WHERE COMPETITION IS INCREASING FROM ALL SIDES. JUST THIS WEEK GOOGLE AND YOU TUBE ANNOUNCED SOME NEW TARGETING TOOLS. WHAT ARE YOU DOING ABOUT THIS PRESSURE TO MAINTAIN FACEBOOK'S VERY FAST GROWTH RATE?
SANDBERG: I THINK THE REASON PEOPLE ARE MARKETING ON FACEBOOK BECAUSE PEOPLE ARE SPENDING SO MUCH TIME ON FACEBOOK AND INSTAGRAM. THREE YEARS AGO, THE LINES CROSSED FOR THE FIRST TIME. THE AVERAGE AMERICAN CONSUMER IS NOW SPENDING FOUR HOURS ON TV AND 5 3/4 ON MOBILE, DIGITAL LARGELY DRIVEN BY MOBILE. OF THE TIME PEOPLE SPENT ON MOBILE, WE GET 20% BETWEEN FACEBOOK AND INSTAGRAM SO WE GET BY FAR, MORE THAN THE NEXT SEVERAL COMBINED. AND IT'S OUR OPPORTUNITY TO TAKE THAT TIME AND ATTENTION FROM PEOPLE AND WORK WITH MARKETERS TO SHOW THE RIGHT AD TO THE RIGHT PERSON WITH THE RIGHT FORMAT SO THAT IT SELLS THEIR PRODUCT AND MOVES THEM OFF SHELVES.
BOORSTIN: DO YOU HAVE ANYTHING SPECIFIC THAT YOU COULD SAY YOU'RE DOING TO STAY AHEAD OF THE COMPETITION?
SANDBERG: MOST IMPORTANT THING WE DO IS CONTINUE TO ITERATE ON OUR PRODUCT SO HAVE THE REALLY LARGE PORTION OF TIME AND ATTENTION WE HAVE. MARKETERS KNOW PEOPLE ARE ON MOBILE THE AVERAGE AMERICAN CONSUMER IS CHECKING HIS OR HER SMART PHONE 150 TIMES A DAY. IF YOU NEED TO REACH PEOPLE, YOU NEED TO BE WHERE THEY ARE. THE BEST PLACE TO DO THAT IS FACEBOOK AND INSTAGRAM.
BOORSTIN: YOU'RE INVESTING A LOT IN LIVE VIDEOS. HOW WILL YOU MAKE MONEY FROM THE LIVE STREAMING PEOPLE ARE DOING IF ADVERTISERS MAY NOT WANT TO ATTACH AN AD TO A LIVE VIDEO?
SANDBERG: VIDEO IS EXPLODING ACROSS FACEBOOK, ACROSS ALL MOBILE PHONES. THAT MAKES SENSE, RIGHT? A FEW YEARS AGO, YOU HAD A PHONE. IT WOULD BUFFER. YOU COULDN'T REALLY WATCH A VIDEO, TAKE A VIDEO OF SUCH HIGH QUALITY EASILY. NOW ALL OF US CAN TAKE VIDEO. ALL OF US CAN SHARE VIDEO. WHAT'S HAPPENING WITH LIVE ON FACEBOOK IS REALLY EXCITING. WE'RE NOT YET FOCUSED ON MONITIZATION WER ARE DOING SOME EARLY TESTS WITH AD BREAKS. WE'RE REALLY FOCUSED ON THE EXPERIENCE – LAST NIGHT IN THE DEBATES ALONE OVER 55 MILLION FACEBOOK LIVE SHARES OF SOME KIND OR ANOTHER, WHETHER THAT WAS PEOPLE WATCHING PART OF THE DEBATE OR JOURNALISTS OR JUST EVERYDAY CITIZENS COMMENTING ON THE DEBATE BUT IN A LIVE FORMAT, WHICH WE THINK IS AN INCREDIBLY STRONG SOCIAL EXPERIENCE.
BOORSTIN: A LOT OF ATTENTION ON TWITTER LIVE STREAMING NFL GAMES. ARE YOU INTERESTED IN BUYING ANY SPORTS RIGHTS?
SANDBERG: I THINK YOU'RE SEEING BROAD EXPERIMENTATION. PEOPLE ARE CONTENT PRODUCERS LIKE THE NFL ARE GOING TO KEEP EXPERIMENTING WITH DIFFERENT FORMS OF DISTRIBUTION. WE ARE WATCHING CAREFULLY TO WHAT OUR USERS DO. WE'RE NOT WORKING ON THE NFL GAMES BUT ARE SEEING EXPERIMENTATION ACROSS THE PLATFORMS. AND I THINK YOU ARE GOING TO CONTINUE TO SEE THAT.
BOORSTIN: EVERYONE IS TALKING ABOUT WHO IS GOING TO BUY TWITTER. DOES IT MAKE SENSE FOR FACEBOOK?
SANDBERG: WE NEVER COMMENT ON RUMORS AND SPECULATION OR M&A.
BOORSTIN: NOW, SNAP INC., ANOTHER RIVAL, JUST LAUNCHED SPECTACLES. YOU'RE GOING TO BE CAPTURING A LOT MORE LIVE VIDEO. DOES THAT MAKE SNAPCHAT A BIGGER COMPETITOR TO FACEBOOK?
SANDBERG: I THINK WHAT YOU'RE SEEING IS PEOPLE ARE MOVING TO MOBILE. SO, WE HAVE MORE PEOPLE USING FACEBOOK, MORE PEOPLE USING INSTAGRAM. VERY STRONG IN TERMS OF OUR TIME SPENT IN METRICS. YOU'RE ALSO SEEING PEOPLE USE OTHER MOBILE APPS BECAUSE ALL OF THIS IS PART OF A SHIFT FROM WHAT PEOPLE WERE DOING BEFORE WITH THEIR TIME TO MOBILE.
BOORSTIN: YOU HAVE SO MANY DIFFERENT APPS NOW. YOU MENTIONED INSTAGRAM, THERE'S MESSENGER, THERE'S WHATSAPP. DOES IT MAKE SENSE TO SPLIT UP FACEBOOK? IS IT GOING TO GET TOO BIG?
SANDBERG: WELL, I THINK WE'RE REALLY FOCUSED ON HAVING SEPARATE TEAMS THAT HAVE REAL PRODUCT AUTONOMY TO BUILD GREAT PRODUCTS. AND I THINK YOU'RE SEEING THAT IN OUR GROWTH. WE ARE REALLY PROUD OF WHATSAPP. WHATSAPP HIT A BILLION USERS. INSTAGRAM GROWTH HAS BEEN REALLY STRONG BOTH ON THE USER FRONT, BUT ALSO ON THE ADVERTISER FRONT. INSTAGRAM JUST HIT 500,000 ADVERTISERS.
BOORSTIN: AND YOU ALSO HIT A NEW MILESTONE WITH THOSE FACEBOOK ADVERTISERS AS WELL.
SANDBERG: WE DID. WE ARE ANNOUNCING TODAY THAT FACEBOOK HIT 4 MILLION ADVERTISERS UP FROM 3 MILLION ADVERTISERS IN MARCH. AND I THINK THAT'S BECAUSE BUSINESSES KNOW THAT CONSUMERS ARE SPENDING TIME ON MOBILE AND THEY NEED TO BE THERE. SO EVERYTHING FROM OUR LARGEST CLIENTS TO THE SMALLEST MOM AND POP BUSINESS ARE TRYING TO REACH PEOPLE ON MOBILE.
BOORSTIN: CAN YOU TELL US ANYTHING ABOUT MAKING MONEY FROM WHATSAPP AND MESSENGER? HOW SOON DO YOU THINK THEY'LL BE A BIG PART OF YOUR BUSINESS?
SANDBERG: WE'RE REALLY FOCUSED FOR BOTH WHATSAPP AND MESSENGER ON USER GROWTH. HOW MANY PEOPLE USE IT, HOW MUCH TIME THEY SPEND, HOW MANY MESSAGES THEY SEND. AND WE REALLY WANT TO DRIVE THAT. WE WILL EVENTUALLY DO THAT. WHERE WE ARE RIGHT NOW IS JUST DOING A LITTLE BIT OF EXPERIMENTATION IN MESSENGER. WE'RE LOOKING AT WHAT'S HAPPENING ORGANICALLY. BUSINESSES AND PEOPLE ARE USING MESSENGER TO CONNECT TOGETHER AND WE ARE CONTINUING TO SEE THAT GROWTH.
BOORSTIN: AND I KNOW YOU'RE VERY TIGHT ON TIME, BUT I HAVE TO ASK YOU ABOUT THIS OP-ED YOU WROTE IN "THE WALL STREET JOURNAL" TODAY ABOUT THE NEED FOR GENDER EQUALITY IN THE WORKFORCE. NOW, I KNOW THIS IS AN AREA YOU'VE BEEN REALLY FOCUSED ON. BUT AT FACEBOOK, THE NUMBERS HAVE BARELY BUDGED. YOU ARE ONLY A THIRD FEMALE IN TERMS OF YOUR WORKFORCE AT FACEBOOK AND ONLY 27% OF YOUR MANAGEMENT TEAM IS FEMALE. WHY AREN'T THE NUMBERS CHANGING FASTER EVEN AT FACEBOOK?
SANDBERG: WHAT WE PUT OUT THIS MORNING THE LARGEST, MOST COMPREHENSIVE STUDY THAT'S DONE OF WOMEN IN THE AMERICAN WORKFORCE EVERY YEAR. THIS IS OUR SECOND YEAR. IT IS DONE WITH LEAN IN, MY FOUNDATION, AND MCKINSEY. AND WHAT IT SHOWS IS THAT WOMEN REMAIN UNDERREPRESENTED AT EVERY STAGE IN THE CORPORATE PIPELINE AND, IMPORTANTLY, MEN ARE 30% MORE LIKELY TO GET THAT FIRST CRITICAL PROMOTION TO MANAGER. AND SO I THINK SOMETIMES PEOPLE THINK IT'S A PROBLEM THAT HAPPENS LATER ON. IT'S NOT. IT IS HAPPENING EARLY. NOW, ALL OF THIS IS EVEN HARDER AND THE NUMBERS ARE WORSE FOR WOMEN OF COLOR. AND SO IT'S ENCUMBENT UPON FACEBOOK, ON ALL OF US, TO DO MORE TO HIRE MORE WOMEN IN UNDERREPRESENTED MINORITIES, TO GET THEM INTO THE PIPELINE, TO MAKE SURE WE ARE DOING THOSE SALARY REVIEWS AND PROMOTION REVIEWS, TO MAKE SURE WE ARE PAYING WOMEN FAIRLY AND PROMOTING AT THE SAME RATE. AND REALLY, TO WORK ON MANAGING BIAS. ON UNCOVERING UNCONSCIOUS BIAS SO THAT WE CAN DEAL WITH IT IN THE WORKPLACE.
BOORSTIN: BUT IS IT A FAILURE OF FACEBOOK NOT TO HAVE HIGHER PERCENTAGES OF WOMEN AND PEOPLE OF COLOR?
SANDBERG: YEAH, WE KNOW WE NEED TO DO BETTER. EVERY COMPANY IN AMERICA NEEDS TO DO BETTER. AND THAT'S WHAT THIS SURVEY SHOWS. I THINK WE DO BETTER BY FACING THE ISSUE HEAD ON. SO JUST IN THE LAST COUPLE OF YEARS, WE DEVELOPED A MANAGING BIAS COURSE, WHICH WE NOW MAKE AVAILABLE AND LOTS OF OTHER COMPANIES ARE DOING AS WELL.
BOORSTIN: I'M SO SORRY THAT I UNDERSTAND YOU HAVE TO GO. I WISH WE HAD MORE TIME. I COULD KEEP TALKING TO YOU ABOUT ALL THESE TOPICS FOR MUCH LONGER. BUT SHERYL SANDBERG, THANKS SO MUCH FOR TAKING THE TIME TO TALK TO US TODAY.
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