Facebook Deals: Facebook on collision course with Google in the battle for local advertising revenue?
It seems like we’re having one huge market changing announcement after another at the moment.
Just while we’re still adjusting to the implications of Google Places, and the huge changes that means for local search marketing, we now get rocked with Facebook Deals.
Facebook Deals – announced in the US market in November last year but this morning rolled out in the UK and parts of Europe – is Facebook’s first bold move into local business advertising.
Deals means that users will be able to check in at a location on Facebook via their smartphone, and then be offered a range of deals from businesses in that area. Users checking into an area will see local businesses that have special discount deals offered nearby, and be able to click on a yellow icon for more information. They’ll then be able to sign up for a discount, and claim it just by presenting their phone at the relevant local business.
From today, the first 30,000 users to check in at Starbucks will get a free coffee, the first 1,000 users to check in at Debenhams get some free mascara and makeover (I’m on my way directly after this post), and a number of other leading UK nationwide retailers are offering similar stuff.
To start, Facebook is running this without sign up fees, revenue share or other obstacles – this is the phase of growing mass usage among local advertisers and users. The fees will come later. But come they will, be sure, and that’s why some commentators are already talking about Facebook increasingly going head to head with Google.
Certainly the likes of Foursquare and Groupon will be looking over their shoulders nervously.
For Google’s part, having been turned down in their recent $3.5 billion bid for Groupon, and soon now launching Google Offers instead, they’re pressing strongly ahead with their surge to capture local business advertising revenue.
How will Facebook Deals impact local business advertising?
It’s early to say, but an important and fundamental difference between Facebook Places and Google Places is that Google Places is search-driven. Facebook Places is not. So as an advertiser, generally speaking you might expect to see higher ROIs on search advertising than on social advertising – as search generally sees higher conversions to sales. Especially if with social advertising you have to throw a compelling discount into the mix, on top of your advertising fees to Facebook.
But that’s probably too general. Some local businesses may find that Facebook Places works better for their offering: a large number of businesses aren’t always well suited to search (if you have the kind of business that people don’t necessarily search for, or if you’re selling something that people don’t know they want). And in any case, there’s no doubt that Facebook Places will get a lot of attention, and steal a large share of advertising spend – not ideal for Google. So this seems to mark a really interesting development, although the search – social divide between Google and Facebook means they aren’t necessarily quite going head to head.
What’s Next?
One thing that really could give Facebook an extra cutting edge could be Facebook Credits. This is Facebook’s payment platform, that is currently restricted only to gaming. The implications of this, tied into Facebook, could be quite massive – the idea of a whole “Facebook Economy” might not be exaggerating it.
Imagine that with your Facebook account, your full credit card details are kept stored, like with Amazon. As has been suggested: you’re logged into Facebook, you see something cool, and instead of just clicking LIKE, you click LIKE AND BUY. Your friends share something cool with you, they’re all buying too, your details are all already stored: bringing the social media phenomenon of viral spreading to buying. Facebook already has all your contact information, adding BUY functionality seems only a small step away.
Facebook: soon to become your default site for all your shopping experiences?
Watch very very closely. There’s a whole lot more to come from Facebook.
February 4, 2011
Am I right in thinking that this only works from a Facebook phone or from any smartphone. If it does work only on the Facebook phone no doubt they’ll be rolling it out at a later date to all phones.
The other thing that tickles my interest here with the Groupon thing is that as a provider to Groupon you have to heavily discount your offer and the take 40% of the money that comes in. So for sometimes you have to raise your price so you can discount it and still make a few quid out of the whole thing. I’m in the process of setting up an offer at the moment for them.
Saying that I think that Google Places is still critical to all local businesses and should be exploited to its fullest.
Nick