Facebook Starts Stuffing Coupons in Users' News Feeds
Apr 16, 2012 10:44 AM PT
Facebook is rolling out its Facebook Offers service, a way for users to get discounts and promotions from local businesses via the social networking site.
The offers will be distributed through users' Facebook news feeds. Users can then sign up to receive the offers via email and redeem them at participating businesses. Users are more likely to see offers from businesses that they've "liked" on Facebook.
Facebook is rolling out the offers launch gradually. The site promised more page owners access to create offers soon.
The social network experimented with a similar ad launch before, a Facebook Deals product that offered deals and coupons from local vendors. It killed the pilot program last August after four months of testing it in eight cities. Facebook also pushes ad-like content with its Sponsored Stories, which promotes content that a user's Facebook friends posted or liked to make it seem like an endorsement.
Facebook didn't respond to our requests for more comment.
Facebook's approach at its latest ad initiative is similar to online daily deal hubs such as Groupon and LivingSocial. Offers is in some ways different, however -- with Groupon, for example, a deal must be purchased before it's used. A Facebook Offers discount or promotion is free and simply must be presented at the time of purchase.
Groupon and Facebook Offers are similar, though, in the way they provide businesses with an alternative means to advertising.
"Survey research shows that getting a deal is the top reason that people 'like' brands and businesses," Greg Sterling, founder of Sterling Market Intelligence, told the E-Commerce Times. "So the program makes sense for both businesses and users. And offers and coupons can be extremely effective in driving store visits and sales."
Facebook has the advantage of seeing where Groupon -- and the social network's own failed attempts at daily deal ads -- have faltered in the past. It also has the insight to roll out a system that won't drive away users, said Ty Downing, CEO of SayItSocial.
"We are seeing gradual rollout of news feed deals, so in an effort of learning from past rollouts and deals failure in the past, it appears Facebook is trying to ward off resentment by rolling this out slowly," Downing told the E-Commerce Times.
Facebook also has the advantage of pushing highly targeted offers, since users will receive promotions from pages they've liked in the past.
"The daily deals product is one where targeting the right user is extremely key to the offers success, which is one of Facebook's strengths," Dilip Venkatachari, CEO of Compass Labs, told the E-Commerce Times. "Given the amount of information publicly shared across Facebook, advertisers will be able to precision target and ahieve strong performance for their offers."
Maintaining a Balance
While users might be more excited to receive a personalized offer from Facebook than they do other ads, there is concern about overkill.
"Consumers are generally receptive to money-saving offers," said Sterling. "However, if brands or local businesses make too many or weak Offers they might become annoying or be regarded as spam and alienate users. It all depends on the quality and frequency of the Offers."
As always, though, informed consumers have the power to control what information they release, and in turn, what daily offers are heading their way, said Downing.
"Ultimately I don't see this too much of a turn-off, as the consumer will always be in control. If they see too many ads in their news feed, they could easily 'unlike' that brand," said Downing.