CardLinx Summit: Facebook Eyes Role in ‘Unlocking Commerce’

Facebook isn’t often thought of in terms of “commerce,“ a la retailers such as Amazon or financial institutions such as American Express, but it makes a strong case for itself as a company that “unlocks” commerce. Speaking at The CardLinx Association’s Mobile conference in San Mateo on Feb. 24, Facebook Head of Payments and Commerce PJ Linarducci joked that his “day job” is “collecting (payments) from two million advertisers a month to help them connect with their audience.” These involve payments in 55 currencies, with 800+ payment methods. One million transactions take place daily.

Is there is a clear link to commerce from Facebook’s base in advertising? Linarducci thinks it is fairly obvious. “Commerce is about information,” he said.

With placement on 95 of the world’s cellphones, and detailed profile and usage information on its users, commerce also extends the company’s broader social mission. “Payments are just a point in social; helping people get what they want,” Linarducci said. He suggested that many marketers might post offers instead of ads, if given the opportunity.

While Facebook does not appear to have moved forward with several tests involving virtual gift cards, prepaid deals and virtual credits, the company is actively exploring all its commerce options. For instance, it is currently highlighting buy buttons attached to ads, and classifieds for groups.

The big picture is to look at Facebook in terms of its access to audiences, its payments infrastructure and as providing world class tools,” said Linarducci. And commerce is happening on the site whether Facebook is directly involved or not. “People hack around the system to make commerce on Facebook — despite us not doing anything to help them,” he said.

Facebook’s PJ Linarducci

Facebook Goes Up Against Craigslist and eBay (Sort of)


Craigslist has outlasted its challengers, and remains the platform to beat for classifieds, or “things to sell” marketplaces. eBay, similarly, remains a leader for the sale of goods – although most are not geographically oriented. Amazon is also active in that space.

Can Facebook, with its huge volume and trust networks, cut into their business? It is going to try via a new “For Sale” offering that allow users of its groups to post items for sale. Items are listed with prices, photos, descriptions, pick-up location and prices. They can also be listed as “available” or “sold” to let buyers know what’s still on the market.

The listings are currently free – and probably won’t go into the paid areas that provide the bulk of Craigslist’s revenue: apartments, cars, jobs and “personal services.” But if Facebook decides to provide a greater emphasis on classifieds, it could conceivably move into transactions (and commissions). It could also open the service up beyond its groups to have more of a geo-orientation.

It isn’t the first time that Facebook has been used for classifieds. Oodle, a large classifieds platform that launched in 2005, took over a nascent Facebook classifieds service in 2008 and focused on Facebook’s huge scale to offer items for sale to friends and groups within the service. Oodle was sold to QVC several years ago.

It also isn’t the first time that online groups have been used for classifieds. In their heydays, Yahoo Groups and Big Tent – each with hundreds of thousands of users — had active lists of classifieds. Many associations and groups currently host classifieds on their websites and pages.

The classifieds project is the latest transaction-oriented effort from Facebook, which may want to diversify its revenue beyond advertising. Facebook has been experimenting with various transaction models for several years, including tests with virtual gift cards, deals and virtual currencies. Facebook has also developed an Amazon-like capability to enable transactions on other sites by collecting credit card information on its profiles.

Angie’s List Goes ‘Mobile First’

Angie’s List, which has recently seen a deterioration in its stock as investors have lost confidence in its ability to grow its premium subscription and ad model, has announced that it has gone Mobile First. The changeover is significant because the company, which has nearly three million users, has continued to support a wide variety of media. Many years after other companies went all digital, for instance, Angie’s has continued to provide personalized phone referrals to its well heeled (and older) home owner customer base.

The move to mobile first is accompanied by the launch of a new mobile app, which offers “concierge level” help for consumers seeking to hire the right service and medical professionals. It provides research for providers; shop for specific home improvement services; and “SnapFix” a project, automatically assigning service pros to projects based on specifications.

“We studied our members’ behavior and directly asked them what they want from us,” noted a company press release quoting founder Angie Hicks. “As a result, we’re not just connecting them to highly rated service companies through a swipe or a click, we’re stepping into the transaction, improving their experiences start to finish.”

A press note added that the new efforts are “symbolic of the corporate shift from just providing highly reliable information to getting in the middle of transactions to make the hiring process easier and the results better, faster.”

We’ll be diving deep into the future of Home Improvement services with local digital leaders from The Home Depot, Thumbtack and Serviz on Day 1 of the Leading in Local conference in San Francisco Dec. 3-5. You may register here.

Ex Reach Local CEO Revisits Home Improvement; Groupon is Lead Investor

ReachLocal cofounder Zorik Gordon left the company last year after veering sharply to the left with ClubLocal, a consumer-facing brand that would collect home improvement pricing and reviews, and assign jobs to home improvement pros.

Now, Gordon and several ClubLocal alumnis are back with Serviz, a similar service that has launched in southern California after running a beta since February. Groupon is Serviz’s largest investor, with an undisclosed ownership share. ReachLocal, where much of the intellectual work was developed, still controls 19.8 percent of the company.

Groupon could theoretically apply its sales forces to recruit home improvement pros, but Gordon tells us that Serviz is being launched with its own sales forces. Most of the core concepts remain the same from ClubLocal –recruit consumers with convenience, price and service guarantees and a strong review base, and recruit home improvement pros with guaranteed work. “They are fundamentally on demand home services,” said Gordon. “”What we’ve done is focus on transparency, and transparency of pricing. Uber has shown what it takes to really hold and disrupt the conventional ecosystem.

The key differences this time take off from this theme: there is a focus on sole practitioners, who have more flexibility in their time and ability to charge, and ultimately, much lower prices. “You don’t need to charge $250 for a home visit from a home tech, who is being paid $15 an hour,” said Gordon.

Gordon acknowledges there is a lot of competition in the space, with the emergence of players like Thumbtack, Pro.com, Handy, Home Joy and even Amazon coming in, all building on a base that already has Angie’s List and Home Advisor.

Amazon will come in as a marketplace, and won’t be a direct competitor, he says. In fact, he hopes to participate in the Amazon marketplace. “No one is going to come to your house with an Amazon shirt,” says Gordon.

The other services range from what Gordon characterizes as directory listers, like Thumbtack and Pro.com; to low end service fulfillment players like Handy. Serviz will work at higher point in the value chain by focusing more on specialized service providers like HVAC and electrical. “We’re building a horizontal platform around higher end home services,” he says.

Zorik Gordon and Thumbtack CEO Marco Zappacosta are among the initial speakers appearing at Leading in Local: Interactive Local Media, Dec. 3-5 in San Francisco. Get early pricing now.

Facebook’s Joe Devoy, BIA/Kelsey New Orleans: ‘Pairing Advertising, Sales Data’

Facebook announced today an ambitious program to match sales related data from a variety of sources to show ROI. Speaking at BIA/Kelsey’s Leading in Local: SMB Digital Marketing event in New Orleans, Product Marketing Manager Joe Devoy noted that the program reaches out to Facebook users for feedback because sales results cannot really be ascertained from click thrus. The program is being tested with national advertisers, but is clearly aimed at SMBs, who make up the vast majority of Facebook’s 1.5 million advertisers.

“Within local, our misision is to create the most relevant ads for people on the platform, says Devoy. But “Measuring offline sales has always been difficult,” says Devoy. “Clicks don’t have an impact on the performance of the campaign.” Ninety- nine percent of people who saw an ad on Facebook and later went into the store never click on an ad.

The program’s ad exposure helps tremendously. There is a 70 percent higher ROI from campaigns that maximize reach, and an 8X return on ad spend, says Devoy. At the end of the day, “Facebook reaches the majority of consumers. We can reach any vertical,” he says.

Merchants Helping Neighboring Merchants: Ex Constant Contacter Launches Alignable

One idea we’ve kicked around for a while is that merchants can generate business tips and customer referrals for neighboring merchants in a strip mall, or down the street. Why shouldn’t the cooking store people refer customers to the gourmet grocery? Or the hardware store people refer customers to plant nursery? At least, they can share tips about landlords, taxes, advertising and supplies.

At this point, several companies have tried it. It has been a leading premise behind the launch of local sites such as MerchantCircle and ShopCity.

The popularization of social media has led former Constant Contact executive Eric Groves to try it once again with Alignable, his new startup. Groves contends that there is vast local knowledge in pockets throughout communities. But many SMBs miss out on marketing opportunities because of the isolated state they operate in. “They never connect with people who are just 10 feet away from their dry wall,” he says.

Alignable makes it easier for merchants to share information; post calendar information; and other information. For SMBs, it is a growth engine, says Groves. What’s in it for him? Because there is generally so little overlap between the customer bases of neighboring merchants, the combined resources of hundreds and thousands of merchants represent a new way to reach a large quorum that could easily rival the reach of a local newspaper or broadcasters.

Informal surveys conducted by Alignable show that overlap rates between customer lists are generally less than two percent. A large community such as Austin, for instance, already has 700 businesses on Alignable. If the majority of Austin merchants were to signup, it would represent a combined reach of 1.5 million, Groves estimates.

Other fast-out-of-the-gate markets for Alignable include Denver, Phoenix and Oakland. In fact, the service is now available in 3000 communities representing every state, as well as Canada.

Looking forward, Groves sees opportunity not only to hook up neighboring merchants and their customers, but vertical players across the county. Health and Wellness has been an early winner, with MindBody Online serving as a strong partner for Alignable, says Groves.

Alignable is a member of the 2014 Future Stars, and will be part of Future Stars Alley at Leading in Local: SMB Digital Marketing Sept. 22-24 in New Orleans. You can register here.

Home Advisor’s Chris Terrill: Poised for Growth, New Services

Almost two years ago, IAC was in a tough situation. It had a leading services referral business in ServiceMagic, whose main rival was Angie’s List, the paid subscription service. But the service wasn’t growing; had relatively low brand awareness; and seemed to be in danger of getting bypassed by a new crop of social media driven services.

In an episode of creative destruction, IAC, along with new CEO Chris Terrill, made the decision to rename the company to “Home Advisor”; and narrow its focus to home services. Terrill later refocused the company’s primary business model from pay per lead to monthly subscriptions that would include a variety of value added social media and directory services (pay per lead options remain available).

Today, the Home Advisor brand may not be as well known as ServiceMagic at its peak. It also remains under the radar in the business world. That is partly explained by the company not being VC backed or publicly traded as a separate company outside of IAC, says Terrill. “We don’t get written about as much.”

But Terrill says that the company remains one of the largest home service networks, with 80,000 service pros, two million reviews and 30 million home owner requests. It is also growing and profitable, and highly focused on “strategic sales.”

And it is focusing more on the awareness issue, conducting an ambitious TV campaign to reach more home owners. It will be spending even more on TV in coming months, with budgets that are in the “tens of millions” of dollars.

The picture looks bright going forward for Home Advisor and the entire home services space, says Terrill. Over the next couple of years, Terrill says Home Advisor will have a singular focus on growing its U.S. business.

“A lot of small entrants are coming into the space,” such as Pro.com, the service launched by former Amazon leaders (not to mention Amazon’s own entrance into the space.) “We see the local home space heating up,” he says. But Home Advisor remains a leader in the space – competing against players such as Angie’s List, Yelp and Home Depot’s Red Beacon — and continues to add building blocks, Terrill says.

Today, for instance, the company announced the purchase of Mhelpdesk, a 30-person Fairfax, VA-based company that helps service pros manage their businesses, and allows home owners to directly book services – especially over mobile phones. The service has over 10,000 service pros.

Terrill says that Mhelpdesk is a leader in a “rapidly growing space” that will prove increasingly important to the company. “It could not have worked 2,3,4 years ago,” he says, before the popularization of cloud-based mobile devices for SMB service providers. “It’s an important piece of the puzzle.”