Web Strategy Summary
Facebook to now offer Paypal as an additional way to buy advertisements and virtual currency for social games (press release). This paves a way for Facebook to reach global advertisers who prefer PayPal vs traditional credit cards. Although this partnership is limited in parameters to those two specific use cases of ads and virtual currency, this is yet another testing ground for developing Facebook into an eCommerce platform with over 400 million global users.
Update: Facebook contacted me after this post went up, and made it clear, this is announcement is not intended towards eCommerce, and is really just limited to the two use cases. While I understand and agree with the scope of today’s announcement, as brands interject more money into Facebook via advertisements, and on the flip side, users are more comfortable purchasing goods (albeit virtual) this continues to be an opportunity for brands and their members to get comfortable with monetary exchanges. As such, I’ve removed from the title of this post “Testing ground for eCommerce”, although the rest of the post stands.
Background Facebook has been testing the ability for users to purchase virtual Facebook credits for over a year, allowing users to send virtual goods to each other, as well as purchase additional features in third party social games. Over a dozen of these third party games already exist extending created by playfish, Zynga, CrowdStar, and others.
Increased revenues for Facebook –and PayPal. For Facebook, and their new partner PayPal, this deal makes sense, as they can continue to grow scalable, low-touch revenues streams by cultivating international advertising dollars, where there is clear global growth. This spurs international brands to continue to deploy Facebook ads, likely in the SMB space as international companies that are enterprise class would delegate ad buying to their digital agency. Although Facebook touts their advertising program, no official case studies or data has been released by them or third party researchers to my knowledge.
Additional channels to monetize heavy game players. For the game heavy , perhaps the 43 year old middle age women with disposable incomes, this gives them new opportunities to play games with increased functionality.
More use cases for game creators to test virtual goods, with brand sponsors. Game creators should allow for virtual items to be introduced into their games, and be sure to have a business development opportunity for large brands to participate –and offer branded virtual items in context of a social game.
The big opportunity? Testing ground for ecommerce within Facebook.
Facebook should roll this out to the application developer community to allow ecommerce functionality to the platform, starting with an application from eBay, the owner of PayPal. Brands should carefully watch how these early test by Facebook occur –and expect by end of year that Facebook will start to experiment with allowing ecommerce happen directly on Facebook Fan Pages. This is, of course, extremely exciting –but could be very terrifying to normal users.
Bold Strategy Bolsters Users, Developers, and Brands In a recent meeting at Facebook HQ, I was pleasantly surprised to find that Facebook is opening its doors to share roadmaps, data, and it’s experience. This strategy shifts attention towards Facebook.com as a sole destination, and towards a distributed network to the open web. Looking deeper, these impacts should shape your corporate web strategy as you re-allocate resources for application development, prepare for Social CRM, and prepare your corporate webpages to become “Facebook Fan Page” enabled.
To Combat Google’s Stealth Social Network, Facebook Goes Open
Facebook’s recent moves to In an open discussion, they revealed that they’re attempting to take great strides in the spirit of openness –yet beyond the ‘feel good’ move, this prepares Facebook for a more distributed approach, that will help them further colonize the open web. With the growth of the Facebook population blooming to 300 million, they’ve already demonstrated critical mass. Yet Facebook’s biggest threat isn’t other social networks like MySpace, or Bebo, their biggest threat is Google’s stealth social network, which seeks to envelope Facebook like an octopus. In order to countermove Google’s zen-like play, they’re taking a similar open approach, here’s what you should know:
How Facebook’s Open Strategy Shifts The Roadmap for Corporate Marketing
Although they announced several improvements (like a cleaner UI), let’s focus on three strategic initiatives and what they mean to brands:
Revealing Roadmap Strengthens All Relationships
From allowing non-students to join the community, launching the newsfeed to the ill-fated Beacon, Facebook’s spirit of innovation has often gotten ahead of its users. In a response to help both users and developers better understand Facebook’s future vision, they have now shared their 6 month roadmap in public for all to see. This helps developers properly allocate resources and prepare product timelines, as well as give users and brands forewarning for upcoming changes. This move not only helps with planning, but signals a relationship of trust, and indicates this is more about ‘us’ than just Facebook.
Sharing of Email Addresses Fuels Social CRM Facebook plans to allow users to share their email address with developers and brands at the control of the consumer. Currently, corporate marketing and support systems are unable to easily identify which customers are talking about brands in the public web –there is no unique identifier. Because email is a unique, universal identifier, (a primary key) brands who are investing in social CRM can better identify users. The promise to identify prospects vs customers, provide faster and customized support customers, or even provide contextual information will be at hand.
Fan Pages Everywhere Connects Corporate Sites and Social Networks Facebook will soon allow website owners to allow any of their webpages to now embed Facebook Fan features. This “Open Graph API” allows any product page could have Fan features that allow users to subscribe by becoming fans, and receive information on their Facebook newsfeeds that could be seen by their friends. This competitive move to Google’s SideWiki, extends the Facebook experience beyond the social network to corporate websites –making every webpage social.
Recommendations: Update your 2010 Planning:
Web strategists who have an active customer base in Facebook, should shift resources and planning for 2010 based on Facebook’s roadmap, in order to align with these significant changes, they should:
Evolve Your Web Strategy Roadmap Brands and developers should analyze the changes coming to the Facebook platform, and start to allocate resources. Although the roadmap provides general dates (month or quarter) around feature releases, developers should engage in dialog within the developer community or with Facebook themselves. In particular, the sharing of email addresses is planned for Nov 2009, and owners of the your Social CRM program should start planning immediately. Secondly, with the Facebook Fan page features coming in early 2010, web strategists should identify appropriate products to test, begin iterative design, and ensure legacy CMS systems are able to include these client side scripts.
Integrate Social Marketing with Existing Email Marketing If you’ve earned the trust of your customers, and they’ve shared their email address with your brand, you can now match their address with your existing customer databases and fuel your Social CRM initiatives. Secondly, if customers have opt-in you can now provide useful emails to your customers, or adding additional rows in your existing email marketing programs. Above all, be sure that you’re transparent with customers how you plan to use their email addressees, and always make it opt-in.
Boost Your Social CRM Strategy With Customer Data. Social CRM is a company’s response to the fleeting customer who self-supports each other in public social networks. In order to provide your customer with a holistic experience, you’ll need to map customer profiles in existing CRM databases to those in the public web. Start a discussion immediately with your CRM team to prepare for this influx of data, while initially the data will be just emails, the information in their profile could help to build a richer customer model that aids marketing, development, and support.
Prepare Steady Cadence of Community Focused Content. Now that every webpage can become a Facebook Fan page, your raving customers will want to get more information about your products –and tell their friends. You’ll need to create, and fulfill, an editorial agenda that fuels this ongoing dialog. Forget about advertising as we know it, instead create an editorial agenda encourages dialog such as contests, incentives that can be shared with their friends.
Facebook continues to make a series of evolutionary moves in recent months, rather than react to the news, let’s take a holistic look at where the company is headed. I’ve given my perspective to SFGate, now but want to dive into details here. I’ll give my perspective, but as we’ve seen time and time before, the real value is the collective contributions in the comments.
Evolving to a platform –not just a social network
Facebook isn’t a social network, it’s really a communications platform –in fact, when you look closely, it’s not unlike an operating system on the web. Early innovations such as the instant messaging tool,then the applications platform that allowed 3rd party developers (called F8, correction: Just Facebook Platform) aren’t unlike what Microsoft offers to consumers. What separates them from others is the social news feed which aggregates what others in your network are doing.
Unique culture fosters innovation
It’s important to examine the culture and leadership of a company as it’s a strong indicator of how they’ll behave. Young, innovative, yet somewhat reserved leader Mark Zuckerberg continues to make choices that don’t always include what the community expects –or wants. In my visits to their previous HQ, it was much like a dorm room: spray painted walls, fancy cafeteria. However recently, they moved out of downtown Palo Alto (to the determent of local businesses) to a centralized location on California avenue in biotech row off Page Mill. The employee base, and culture reflect all of this: the age of the untainted product teams indicate this –In my ripe old age of mid 30s, I’m clearly one of the oldest during my visits.
Recent moves indicate move towards real time.
Fast forward to summer 2009, and we’re starting to see some radical developments. First with the acquisition of Friendfeed which is mainly a talent acquisition and early snatching of potentially the next Twitter competitor, who they were unable to acquire. Now we’re seeing indicators that they’re gearing up for mobile, and other devices like gaming consoles with a Facebook lite version that is quickly delivers the basic for those that need to quickly find out what their community is doing and communicate back. Lately, we’ve seen indicators they want to find ways to improve real-time search, which means they can help consumers make real time decisions.
Awkward adolescence has its challenges
The continued innovation is spurred by the elusive business model —this awkwardness is a natural outcome of a company in growth. I’ve heard a couple of times from various employees that they’re generating revenue (but there’s no official information available) yet I hear from brands that traditional advertising is ineffective. Secondly, this constant innovation becomes a real burden on brands who have a difficult time understanding which tools to use and why, as well as 3rd party developers who are constantly rejiggering the changing API and Terms of Service.
What to Expect in Facebook’s Future: A Web Based Operating System So what’s in store for Facebook in the future? Here’s what we should expect:
Aggregator of all. To win, Facebook wants it’s network to spread to other locations, then aggregate back to it’s website. This centralizes Facebook (which can be accessed anywhere from any digital medium) as the hub of communications. As a result, consumers will make decisions based on information from peers in this hubs, and brands will pay money to be part of it.
A new class of competitors –beyond social networks. In the end, Facebook is an aggregator of all information that’s important to an individual and their friends. Who currently does this? Media darling Twitter does this, Friendfeed (hence the acquisition) and existing web email systems like Hotmail, Gmail, AOL, and Yahoo have shown indicators they’re thinking about heading this way.
Content to be more public –yet members may resist. The option to allow profiles to be public and the vanity URL landgrab are indicators that they want to make information more public –yet the challenge will be convincing members to opt-in.
Facebook.com as a destination isn’t as important. To be successful, Facebook will need to spread to many websites (like corporate ones) and experiences, this is why Facebook Connect (authentication for 3rd parties) matters. This Era of Social Colonization empowers the FB experience to spread to other websites.
Monetization engines to turn on. The constant innovation of dozens of products are akin to ‘throwing pasta at the wall’ to see what sticks. Facebook’s 250mm user base is nearing mainstream web portal (see traffic compared to Google and Yahoo) they’re quickly closing the gap.
No kingdom lasts forever. We see this time and time again, technology companies supernova, grow then fail to innovate from political tape and sheer size.
This is my take, yet it doesn’t necessarily mean it’s the only opinion. I hope to hear what you think holds in store for Facebook in the coming years, love to hear your comments.
Invest 20 minutes to listen to this podcast focused on how Facebook Connect helps brands connect with existing communities. This podcast, hosted by Aaron Strout of Powered, was joined by the digital editor of AdWeek, Brian Morrissey and marketing blogger/consultant, Susan Getgood, and myself.
Facebook is undergoing pubescenct changes in the next few years –from a private pre-teen to a public facing member of society —that’s what I told USA Today. Facebook initially made it’s promise to be a private community, but realizes it must now be more public to compete with the open web. Expect more awkwardness for the social network and it’s users’ over the coming years.
What are the indicators that Facebook wants to grow up and be public?
Facebook launched Beacon in late 2007 that was it’s first gangly moment that resulted in public backlash as customer data was shared without users’ consent.
Facebook already has thousands of sites with Facebook Connect, which allows users to login with their Facebook ID to a site (making registration pages less relevant), and exposing limited amounts of profile information –expect this to expand as it’s successful.
A few weeks ago, Facebook allowed a mad rush to create vanity URLs for profile names and fan pages. Yesterday, Facebook announced it’s going to turn on new features that allow many types of content to be public from individual posts, as well as a set of permissions by your different groups of contacts.
As Facebook crosses this chasm they are buffering with the right staff, and have hired lobbyist Chris Kelly, Facebook’s chief privacy officer, who not only deals with internal programs and policy, but also government groups.
Why Facebook’s Strategy Must be Public
Data that is public has more opportunity to be seen by the public, thereby increasing opportunities for advertising and marketing revenues.
Secondly, this is a trend of the open web as Twitter and other public social networks take hold.
Thirdly, take a look at Generation Y, my observation is that they appear more open about what they want to share, at least for now.
Lastly, Facebook’s play is to be an identiy hub, therefore its Facebook Connect features will let our Facebook logins spread the web, as a result, Facebook will aggregate the data back to it’s homepage, making it the centralized place we go to get information.
Expect More Social Awkwardness Over Next Few Years
As Facebook continues it’s global domination as the world’s largest non email social network (you do know that email is the largest social network, right?) expect to see more focus on privacy as they slowly change their value statement of being a private safe place with your real friends to be more of a public online discussion with the open web.
The key Facebook challenge is they have to convince, enable, and encourage its users to be public and open –they can’t turn on these features without breaking user trust.
I want to hear from you, did you delete your Facebook account (or think about it?) leave a comment below, and tell your story. I’m not using this for any reports or anything, I just have a genuine curiosity to know why someone deleted their account, and the impacts it has on them. If you’re curious like I am, see all these in Twitter who are discussing deleting, or have halted using their Facebook accounts.