Facebook officially in the Deals business

Facebook officially in the Deals business

Facebook, once upon a time, had their own Daily Deal program. Trying to compete with the likes of Groupon, Livings social and Google Offer. Shortly after their launch they shut down their deals program. They realized that hiring a local sales force to get offers was simply not the model they wanted to pursue. (among other things).

Last year, however, they revamped their program and launched a limited product called Offers where they allowed Brands to offer deals and coupons to its Facebook fans. Last week, they rolled this product out world wide. So now, or rather soon, Facebook will officially be the world’s largest distributor of Deals. Are they a Deals site or are they an aggregator? They are both.

 

Here are further details:

  • Facebook now allows business pages or Fan Pages to promote deals to their “Liked” audience.
  • The page MUST have atleast 400 likes in order to promote a deal
  • Promoting the deal is NO longer free. Instead you must buy based on click rates or views just like buying a Facebook ad (more on this later)
  • The offer must be targeted and not offered to just anyone who “walks into the Facebook page”
  • The user grabs the deal and redeems it with the business/brand NOT Facebook. There is no money that is exchanged between the user and Facebook.

Comments: Who gains?

Certainly Facebook. It will increase its hits and engagement from users. It will be an entrance into online shopping for Facebook. And of course, Facebook will generate a new revenue stream by charging businesses for promotion or redemption of those deals. This also makes “LIKES” far more valuable and now measurable in terms of revenue produced from the FAN Community.Given Facebook’s “trouble” with shareholders and financial communities, having another revenue stream within a popular category like Deals is a positive step. Charging for the right to post deals makes sense and it also sends a message to brands saying “we will provide the platform, the audience and distribution method…but don’t expect things to be free any more. Value must be paid for.” Also bringing more value to a LIKE is certainly welcoming to the investment and advertising community.

How about the Business. How do they gain? We all know how popular deals are and if a business already has a vibrant and involved community of fans on Facebook, then promoting a deal will drive further interest and engagement from that community. Making social shopping that much more successful for those companies.If the deal is a great one or if it is tied to an effective sharing feature then there is a real opportunity to significantly increase the amount of fans through sharing. My suggestion is to get the user to redeem the deal by entering the email address. If not then all you have is a like as opposed to an email. And email addresses are far more valuable. And one more thing, Businesses do not have to share any revenue from the Deal with Facebook or anyone else. They keep 100%. Their only cost is the actual promotion of the deal. So this reverts back to an advertising play. The success of the campaign now depends on how large their fan audience is on Facebook and how well their audience shares the offer. Big brands have a real choice and leverage, but for the small business owner, no marketing distribution vehicle presently available, including the Facebook Offers feature can compare to the effectiveness of promoting a good deal through a reputable Deal provider. Some of these deal provider have millions of users and that is the point….distribution. Probably 95% of Facebook fan pages have less than 2000 fans and that simply won’t be effective as a distribution for Deals. That simply will not generate enough for the small business nor will it attract enough new fans. Oh and the small business still has to pay ad fees to promote that offer. Using a Deal provider still has plenty of value.

Users? Yup, they gain as well. Now instead of endless and perhaps meaningless content on Facebook fan pages, there is now a reason to be engaged…deals. If the user is already on Facebook often then this is a bonus. For those casual users it is a way for the business to get people onto Facebook and engage within the Fan community.

Daily Deal companies? Sure, some brands/businesses may opt to promote deals just through their fan pages, especially if they have a large number of fans. But this will not reduce the necessity or the importance of using a Deal provider. As mentioned, probably 95% of Fan pages on Facebook have less than 2000 fans. In essence the distribution of deals is not large enough to make a real impact. As such, Deal provider will not lose many merchants to the Facebook distribution model. What this will do though is increase the amount of merchants that start using Deals as a marketing/advertising vehicle.

All in all, Facebook is now part of the Deals distribution business and will help increase the amount of deal inventory on the market…..all a good thing.

For more information in Facebook offers, please visit http://www.facebook.com/help/offers

 

Here is a major question and comment I have though:

If Facebook will now have thousands and thousands of businesses ( local, online and national) promote DEALS through their respective Facebook Fan pages, then how can a user search ALL deals in a given city or region. A user LIKING 100 businesses is not effective or reasonable. There should be a mechanism that either Facebook offers or a 3rd party offers that helps aggregate all these deals. Perhaps an aggregator can work with Facebook’s API in order to search for, collect and organize all these deals promoted on Facebook. If all these deals can be searched and organized in a matter where Users can easily find and redeem deals, then Facebook as a distributor of deals is that much more powerful. Without it and it becomes a tool to grab deals from just a handful of businesses. Users will not LIKE a dozen businesses to see deals just like they no longer subscribe to a dozen Daily Deal providers…They subscribe to 2-3 and also to an aggregator of deals. I would certainly like to see that feature or tool available for Facebook Offers.

What does this mean for Canada?

  • Well, the feature is now available to Canadian businesses. So they can start posting offers right away.
  • A Canadian aggregator organizing all those Canadian only deals would be great.
  • My advice to Deal providers: figure out a way to search Facebook for businesses that run deals in the city you are also in, then contact those merchants to run deals with you, with your Facebook audience, etc…

 

Facebook…..welcome back to the deals space.