Facebook now makes local marketing even more socially dynamic with Facebook Deals, a new geo-location app that connects users of Facebook Places to hot deals offered by local businesses. Deals can take many forms: coupon savings, group deals, loyalty rewards or even charitable deals where a portion of sales go to a charity.
Some 23 major merchants and up to 20,000 small and midsize businesses in the U.S. are part of the initial program. Big players include American Eagle Outfitters, Chipotle, H&M, Macy's, McDonald's and Starbucks. The Gap says it plans to give away 10,000 pairs of jeans via Facebook Deals.
Initially, Deals is only available through Facebook's iPhone app or via touch.facebook.com.
As this video post by Cnet demonstrates, users simply click to claim their discount and then redeem it by showing the deal on their phone at checkout. The Deals service is an extension of Facebook Places, which lets smartphone owners with Facebook accounts share their exact location and find the whereabouts of friends. This latest feature notifies users of discounts and deals at selected merchants nearby.
"Coupons have become one of the most desirable forms of mobile advertising from a consumer perspective," says Greg Sterling, an independent analyst who closely follows Facebook. “Facebook Deals not only 'accelerates' the company's big presence on mobile devices, it is 'very significant' for marketers, retailers and local businesses.
Forrester Research's social media analyst Augie Ray calls this move “a game changer,” predicting that Facebook Places could single-handedly change the way people shop by “encouraging the adoption of check-in activities among people who previously saw no reason to do so.”
Facebook doesn’t charge businesses to promote an offer on Facebook Deals. Instead, local businesses with deals have incentive to buy display ads on Facebook.
Researcher eMarketerer projects Facebook will earn $1.28 billion in worldwide advertising revenue this year, up from $665 million in 2009. Market researcher BIA/Kelsey sees revenue from mobile advertising in the U.S.
To make things even more interesting, Facebook Deals combines geo-location with other geo-social features like Yelp, Foursquare, Gowalla, Loopt, which many now use to shop, communicate, socialize and play games. Foursquare is said to be planning personal brand discovery features that leverage user recommendations and buying history.
Privacy concerns are hindering mainstream adoption of geosocial tech, however, and Facebook members may be turned off by the fact that when they activate a deal news of it gets posted to their wall.
Pew Research found that only 4 percent of adults now use location-based services like Foursquare, Gowalla, or Facebook Places, and only 1 percent of these actually use these services on any given day. Pew also found that only 8 percent of adults 18-29 use them – significant because this segment is the largest in terms of geosocial tools acceptance.
For more on Facebook's privacy issues mega PR firm MS&L offers a white paper, FacebookPrivacy: Implications for Marketers.
This story from InformationWeekcom provides good insight, too.
This story from InformationWeekcom provides good insight, too.
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