Facebook has taken a lot of flak for its dismal post-IPO stock price and the poor Facebook Ads ROI reported by many companies who have tested the platform. A revamping of its Facebook Gifts program, however, has the potential to reverse the company’s earnings outlook by capturing a portion of the revenue generated by millions of highly targeted merchandise sales through its site, while also providing a new way for brands to market.
No Longer Just Digital Goods
The Gifts program on Facebook was originally a way for a user to send a digital gift, typically to a friend on their birthday, for a nominal fee. The program was not a big hit, most likely due to the reluctance of Facebook users to pay for essentially valueless items, such as virtual teddy bears or bouquets of roses, which recipients simply viewed on their web browsers.
As reported on Mashable, however, the new and improved Gifts program will now allow users to send real, physical gifts to their friends and families. Facebook already reminds users when their friends’ birthdays are; now all a user has to do is click the “Gifts” icon next to the reminder, choose an item, and the recipient “unwraps” it and confirms their shipping address, receiving the physical product in a few days. Senders can pay instantly or add their card information later.
It is assumed that Facebook will recommend gifts based on a user’s profile and demographics, meaning that a user who likes aromatherapy and cosmetics pages might have spa treatments as a recommendation, while a teen who likes a lot of band pages might receive an iTunes gift card recommendation—all of which is intended to make gift-giving a no-brainer.
A Marketer’s Bonanza
This program has the potential to generate lots of activity for brands and revitalize Facebook as a marketing platform. First, vendors who can get their products listed in the Gifts market itself will receive a lot of exposure and potential sales.
Second, brands can leverage Gifts to build their social media presence even more. One idea is to run contests for giveaways right from Facebook, potentially building their Fan Page subscriber base and exposing many more people to their social media content. Blog posts, tweets, and even Pinterest pins can be used to flow traffic to their Fan Page to capture more likes, and therefore, eyes to market to.
In summary, Facebook’s surprising move in revamping this program proves that the company continues to innovate in providing a better user experience, while now also taking into greater consideration the interests of marketers and shareholders. Should the program take off as predicted, it might even put a dent in the market share of giants such as eBay and Amazon—something no analyst would have expected.
Facebook Gifts could truly be a game changer in the social media and e-commerce worlds.
Photo Source: Facebook