Facebook Deals launched on April 25 and already the limited city release is proving to be a positive venture for the world’s largest social networking website.
On its face there is very little different between Facebook Deals and competitors that include Groupon, LivingSocial and Google Offers, they all offer vast discounts on various deals, sometimes more than 50% off certain offers, however the way in which the site is attracting businesses, site members, even musicians could very well give Facebook a leg up on the competition.
Let’s start with the cost of entry. Facebook at this time is not charging businesses to advertise their products, instead businesses are encouraged to purchase ad units to target customers in their demographic. If you have ever used the Facebook advertising system you know that you can choose to target members by age, city and other demographic information which means you won’t be wasting time selling dentures to an 18 year old male outside of your cities advertising scope.
Second, Facebook Deals is sharing deals through emails and user profiles (specifically through the Newsfeed), adding a social element that their competitors can not possibly match. For example John Doe buys a new Hurley t-shirt, that t-shirt which was discounted by 50% is then shown in their friends newsfeeds and more than likely at least some of their friends share the same interest in clothing as them, perhaps they have a lot of skateboarding friends for example. It’s this element of social sharing that Groupon and other social buying sites lack.
Yes Groupon does offer the ability to match your preferences to offers but outside of that practice and mass emails that have personally never really interested me, I find little value in their suggestions and rely on daily site checks for products and services I might be interested in trying.
Finally, Facebook has a user base of 600 million users. While Groupon has developed a name for themselves, I am amazed on a daily basis to learn how many friends missed a really good deal in their area simply because they didn’t visit the site during a certain 24 hour period. On the other hand, I don’t have a single friend who doesn’t check in to Facebook at least once a day, even my mom who doesn’t own a computer walks up to her local library to check her Facebook account. User engagement is the key to selling products and with a newsfeed feature and friends sharing their Facebook Deal buys it means a better chance of engaging users. Throw into the mix that at least a few of each users friends probably live in their direct vicinity and it’s easy to see how 100 people buying a product could easily share that local deal with thousands, even tens of thousands of people in their same geographic location.
Facebook isn’t winning the social buying space yet, however their user base of more than 600 million social network users definitely offers them not only the advantage they already have, but plenty of room to expand how they reach out to a massive base of users on a minute-by-minute basis.