Tag Archives: Facebook

Rethinking Deals after Facebook and Yelp Pullbacks

Facebook and Yelp are downsizing their separate deals initiatives after launching them with some fanfare. Facebook is now limiting its deals to users that check-in to businesses; and Yelp is sharply reducing the number of deals that it features, while continuing to support self-serve efforts that are integrated with other Yelp ad products.

Are these pullbacks a sign that deals are collapsing even before Groupon’s IPO? I don’t read it that way at all (and quickly note that Google, Amazon, AT&T and others are still ramping up their “Groupon killers.”)

To me, Facebook and Yelp are mostly following former GE head Jack Welch’s edict to always be among the Top 2 players. As Welch famously said, “When you’re number four or five in a market, when number one sneezes, you get pneumonia. When you’re number one, you control your destiny.” In the case of both companies, they can buy their way in later.

Let’s look at Facebook first. Conceptually, there has been much to admire in Facebook’s prospects in deals. It had strong potential to target users based on their FB posts (i.e. proclivity to go to happy hour, buy discounted travel, and attend jazz concerts.).

It also has been poised to use Facebook messaging to lessen reliance on email overload – a real advantage if one accepts the idea of email fatigue. The site’s ability to ramp up Facebook Credits as a transactional agent also loomed large for closing the loop on sales.

But as Facebook realized, none of these conceptual advantages were really ready for prime time. Moreover, during the four months that it was in the deals market, its ability to source deals from other players resulted in nothing special and inevitably, in an “also ran” status.

Perhaps Facebook can come back via a smart acquisition –including some feet on the street. Meanwhile, its local efforts continue to smartly build via Ads, Pages and Sponsored Stories.

Yelp, similarly, saw a ripe opportunity to highlight local deals when it entered the marketplace a year ago. It also, ambitiously, was seeking to source deals via a ramped up local deals sales force – taking on the big players directly. In June, it integrated its deals into its smartphone apps in more than 20 markets.

But Yelp may have been a little out of context in the deals space – it has such a strong identity for its local business reviews. And the requirement to highlight a daily deal for a site that might be a less regular habit ended up watering down the deals quality. According to data from Yipit, Yelp’s deal revenue was down from $30,000 a deal at the beginning of the year to $10,000.

Yelp now says it will focus on fewer deals that can get more attention. Weekly service deals featured on sites such as Angie’s List and Kudzu have done well in this manner.

So — what conclusions can we draw from these pullbacks by Yelp and Facebook? Some of the press thinks it means that deals are going down, having already peaked. This is supported from Yipit data, which shows that 38 daily deal companies have recently quit the business, while just 36 jumped in. (a point of trivia which means nothing at all, really.)

But here’s another thought: what if the pullback shows that there really are, perhaps, barriers of entry after market leaders have been established. This is what Groupon board member Ted Leonsis cryptically suggests.

But I would suggest that there are other signs of vulnerability – for the big guys as well. I think there is little doubt that deal quality –and the positioning of deals –has really suffered. In my market of San Diego, the same deals are being repeated, and uninspired merchants are being featured. Indeed, hardly anything has tempted me (or amused me) for months.

It is probably a reflection of my personal interests, but the only deals site that consistently engages me is Marketsharing, a B2B site that constantly comes up with fresh takes on B2B offerings (messenger delivery, cleaning services, copier discounts). In the end, it might be the interesting niche sites with highly curated offerings that really end up driving this thing.

Facebook’s Emily White: Businesses Should Post 3X a Week

Businesses should post on their Facebook page 3 x a week. That’s the word from Emily White, Facebook’s Director of Local.

In an interview with USA Today, White says “The general rule is, you’re in pretty good shape if you’re posting three times a week. That gets you to a pretty sweet spot. Any more would be just too much.”

In the interview, White also noted that Facebook deals are also being tested in Atlanta, Austin, Dallas, San Francisco and San Diego. “When businesses run Deals on Facebook, we also help them run ads directing to their Deals. Deals are intended to drive customers specifically into the store. The purpose of Deals and ads is different, but we think they’re complementary,” she says.”

Facebook Deals Launches in Five Markets

Facebook today launched its Deals product as an “Alpha” in five markets: San Francisco, San Diego, Dallas, Austin and Atlanta. The effort plays up Facebook’s social connectivity, making it simple to “like” and share deals, and promote throughout the site. The launch comes at a time of rapid expansion in the deals space. Google Offers has also just quietly launched a test product in Portland, OR, New York City San Francisco and Oakland.

The launch of a socially driven deals site stands in contrast to some of the newer deal sites, which play down the social elements of deals, as massive email lists and deal exchanges dwarf the role that viral leads have played. But nobody else quite has the clout of Facebook for social.

Deals has been given its own section on the left hand menu bar, above Groups and Marketplaces, its socially- driven classifieds product with Oodle. They’re also tied to Events on the right hand menu (if it is an event). Time and location of the event are put on top. Users can also see which friends have purchased the event. “Deals Near You” is another section.

The deals have clearly been designed to make it easy for businesses to add their own deals, rather than rely on the small inventory of email driven deal sites (i.e. Groupon and Living Social). It also encourages deals of different sizes, enabling low priced deals such as coffee discounts for instance.

The whole thing is getting a high profile launch. When I logged on to Facebook this morning, for instance, deals was promoted as a pop up before I had access to the rest of Facebook (I live in San Diego, one of the alpha markets.) The pop up let me personalize deals for town and zip code. Users can buy deals with their credit card or with “Facebook credits” from check-ins, etc.

In addition to possibly collecting commissions on deals, Facebook appears likely to reap some straight-ahead advertising revenue. In a PDF that businesses can download, Facebook indicates that businesses are “eligible” to advertise sponsored units.

In sum, we’d note that Facebook definitely has some major advantages in this space. Just witness how EventBrite has leveraged Facebook mentions for its event sales. It figures every Facebook mention is worth about $2.50. BIA/Kelsey research shows that 48 percent of SMBs now report some type of interaction with Facebook.

What Facebook doesn’t seem to have are feet on the street and telemarketers. The thousands of sales people that leaders like Groupon and Living Social have on board definitely helps move local small businesses out of their inertia. Facebook will go fairly far with self serve. But how far?

Where 2.0: Facebook Places Focuses on ‘Pushing Up the Stack’

Facebook Head of Groups Justin Shaffer told attendees at Where 2.0 that one of Facebook’s goal is to develop the largest database of “interesting” places. The collection of places has “really been the focus” of his division for the past four-to-six months he said. At the same time, the database of places is probably something of a commodity for Facebook, and other services. “The coordinates are approaching a commodity. But (we’re) pushing up the stack with services etc.”

Shaffer, former CEO of Hot Potato, a group software site acquired last year by Facebook, said that a “social network” involves storytelling, memories and serendipity. The latter is “where friends check in and find you.” He added that a social network itself can be broken down into three basic elements: “Open,” “Geo” and “Temporal.”

Open would mean your social network acquaintances; Geo would be a friend’s photo of the Eiffel Tower; and Temporal would show the four people that are “here” right now. The importance of Check-ins is “not really where you are, (it is about) who you are with,” he said.

Content-wise, it all splits into the “Open Graph,” “Data” and “businesses.” Data would include places and events, and businesses would include check-in deals and pages. While it would be ultimately helpful to develop standards, Shaffer warned that “everyone isn’t going to agree on meta data or categories.”

Speaking on a panel with Shaffer at Where, Fwix CEO Darian Shirazi, who has just raised a new $4.2 million round from Comcast Interactive Capital, agreed that the basic information is probably approaching commodity status. The challenge is to build a package that it unbeatable, said Shirazi. A listing of “The Top 10 Bars in San Francisco” would be an example.

Content, and geo-tagging of content, “is where this will realistically go,” added Shirazi. Fwix, a 22 person company that started two years ago as a news aggregator, is now expanding into vertical content areas such as real estate and video transcriptions. If Fwix could use places data to win even one percent of Google search results, it would be “huge,” he said.

ILM East: Facebook’s Sharafi on ‘The Identity Platform’

Facebook is less about business development or forming partnerships than establishing itself as an identity platform, notes Maz Shirafi, Sr. Manager of Monetization, who was speaking at BIA/Kelsey’s ILM East conference this week in Boston.

Sharafi also noted that Facebook’s advertising products will evolve quite dramatically during the next several years. Its current slate of sponsored stories mark the beginning of “the direction we want to head towards,” he said. “The ad unit in the sponsored stories don’t have any marketing message at all. Just the message.”

Indeed, the notion of corporations pointing to a website is “a dying one,” said Sharafi. A Facebook page can be compelling in its authenticity especially “versus marketing speak or a static website”. Toyota is among the brands that have picked up on this. Toyota doesn’t advertise a website, he says. They advertise its Facebook page.

ILM:10: Facebook’s Emily White Details Local Efforts

Facebook sees strong potential in local advertising and will develop an aggressive local strategy, according to Facebook Local Leader Emily White, a Day 3 keynoter at ILM:10.

White, who left Google four months ago, said that businesses are always being told that they have to be online. But it hasn’t really been clear what they can actually do online that relates to their customer base and actual activities. “The online marketing world has completely forgotten about the fact that local businesses are run by people,” said White. “To date, they have not been particularly well portrayed by their static Websites.”

But as the Web changes from an information Web to a social Web, Facebook is well positioned to help SMBs via “liked” home pages, as well as via several featured products,” White notes.

National chains are already using their pages for promotions, including various promotions that offer discounts or donations to charities for check-ins. Facebook’s new Places product also “helps close the loop between what is happening online and what is happening in people’s real life.” Another product, Facebook Deals, also has practical implications for businesses, and has attracted 22 merchant partners, including North Face, American Eagle. JC Penny, Chipotle, REI, H&M, Starbucks, Macys , The Gap and McDonalds.

Local companies are also expected to jump on board. “It is amazing how many companies at the local level get this,” said White, who added that local should be a layer across all products.” But she emphasized that Facebook is mostly seeking to drive more usage at this point, rather than focus on monetization.

Amex Teams with Facebook for Small Business Saturday

American Express has recently been leveraging its powerful relationship with SMBs on the Web, including a tie to search engine marketing and lead generation via a deal between American Express Open and Clickable.

Now Amex is going deep with social media, specifically Facebook. It is giving up to 10,000 SMBs up to $100 of customizeable Facebook advertising.

The giveaway is on top of two other promotions tied to “Small Business Saturday,” which is designed to drive traffic to SMBs on the Saturday after Thanksgiving. These include a promise to donate $1 every time someone likes Amex’s Small Business Saturday page on Facebook (up to $500,000); and a $25 credit card refund for Amex consumers who shop at a Amex-accepting SMB on November 27.

It isn’t clear whether there is an official relationship between Facebook and Amex. But the program looks like a mutual winner for both. It kind of reminds of us of earlier SMB promos, such as one between Google and Intuit.

Facebook execs Emily White and Tim Kendall will discuss Facebook’s local initiatives during a presentation on Day 3 of ILM 2010.