It was in September, last year that Facebook rolled out its new gift systems that allowed users to send real gifts to their friends online. Some thought this new idea will turn into a billion dollar revenue stream. That doesn’t seem to be the case. According to a report based on public statement made by the social network, only 0.4% of U.S. users made use of that feature in the fourth quarter of 2012. But again it is quite earlier to draw any conclusion. The reality though is that it may take Facebook some time to be able to transform the Gift feature into a real business.
It is important to note that even though the feature itself was launched in September, it was in December that it got rolled out to all U.S. users. This clearly shows that there was an opportunity that got missing throughout the process. Nonetheless, December was a Christmas period and one would have expected the sales to skyrocket. Facebook also did an effort to publicize the feature by hawking the “Gift” on the birthday sidebar and making sure it sticks to the top of the mobile feed. There was also a big callout for last minute holiday presents.
The biggest social network still has to find a way to persuade its users to take advantage of the Gift feature or else, the sales generated through that stream is not going to be anything to write about. Apparently the Facebook team is already working on it.
Last week, the website “Inside Facebook” reported the social network appeared to be scanning users status updates to find keywords based on which they are going to encourage friends to buy gifts to one another. For example words related to pregnancy, childbirth and jobs were used to stimulate friends to buy gifts to the authors of the updates having those words. Some few days later CNET also reported that Facebook is offering a discount of $4 to users that were willing to spend $5 on Gifts. Another strategy the social came up with is the “Facebook Gift Card”. A plastic card that can be loaded with credits to be used in real stores like Target and Olive Garden.
It will take some time for the social network to get their users to see the Gift option as an integral part of the social experience but for now Facebook is trying to also improve its advertising revenue stream by allowing advertiser to tap into the hashed list of potential customers.
Facebook’s new deal with advertisers
Facebook has struck a new partnership with purchase data providers like Acxiom, Datalogix, BlueKai, Epsilon and that should now give the power to advertiser to target hashed list of potential and existing customers including categories. This expansion can turn into a new big stream of revenue for Facebook as it attracts more businesses to the platform to target real spenders.
This is Facebook’s strategy to prove to businesses that advertising on the social network can really generate sales. In the past it has been a big struggle for certain inexperienced businesses to produce any significant results on the platform. The consequence has been that those businesses, under frustration, go out of the way to blame Facebook as being the wrong platform to advertise products and in the process they scare away other potential advertisers. It is to deal with that issue that Facebook launched the Custom Audience Program in September.
If this new program turns to be successful, for advertisers, that will mean they can now switch from targeting users that only liked a page to users that have shown a real intent to buy a product within a specific geographical location. Obviously, this increases the chances for a sale to occur and if more businesses generate sales on Facebook there will be more advertisers coming in to spend on the platform. Aside that the advertising revenue stream, Facebook is constantly trying to improve on the user’s experience and that is why it is holding on a new event on the 7th March.
Facebook’s new event coming on the 7th March
Facebook has sent invitations to journalists to attend its event that is going to be held on Thursday 7th March at 10 AM. The social giant intends to showcase the redesign of its news feed. From those who have seen the test version of the design, the new look is more keeping up with the design of other mobile apps like Flipboard and Google +, showcasing full screen photo tiles with text overlaid on them.
We will surely know how the new design looks like on the d-day.
Loic
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