In 2012, Facebook went public after breaking the record for largest tech IPO in history, leaving investors and technologies fretting over whether the social media behemoth could possibly live up to astronomical expectations and potential as a marketing powerbroker for local businesses and national brands.
At the time, Facebook had to strike an extremely delicate balance to generate revenue without alienating the billions of users who see Facebook as a public service rather than a private business. After all,the company was notorious for sparking outcry from users whenever it implemented the slightest change. People worried that any attempt to integrate market activity would mean turning the vibrant social community into a digital ghost town like formerly hot social networks MySpace and Friendster.
Over time, many companies — my own TalkLocal included — offered Facebook ways to avoid relying on the kinds of intrusive ads users hate; turning instead to a utility-based business model that attracts small business revenue while creating experiences users will love.
Recently, Facebook finally took many of us up on our offers, rolling out a suite of new experiences for Facebook Pages — most powered by third party technologies, including “Start Order,” “Book Now,” and our own “Get Quote.” These collaborations mean more engagement, visibility, and revenue for my company and others involved; but what does it mean for Facebook?
Here are three reasons why Facebook’s new integrations are game changers:
Building a Complete Storefront:
With 1.7 billion people and 60 million businesses already on Facebook, Pages storefronts are like a food truck that has found a magically omnipresent parking spot directly across the street from your and everyone else’s office at peak lunch hour. Facebook storefronts are also optimized for mobile and have a mostly mobile user base, an area where most business websites are lacking. The problem before now: customers could look at the menu options but had to go elsewhere to actually place the order, often to a subpar business website. Not only did the inconvenience create friction in the buying experience, it also made it difficult for merchants to know where their buyers were coming from.
Now, call-to-action buttons like Buy Now, Start Order, and Book Now are appearing on merchant’s Facebook Pages so that customers can get everything done at this conveniently located storefront. Meanwhile, businesses can easily track Facebook conversion rates and see exactly what marketing on Facebook is worth. If that hadn’t convinced you that the largest social media network would become the world’s first universal digital storefront, then news of a PayPal/Facebook partnership to improve mobile payments should. A complete storefront not only means convenience for consumers, it also means that businesses will more easily attribute the return on investment when it comes to their Facebook ad-buys and activity — inspiring bigger investments as a result.
Encouraging Symbiosis from Former Parasites:
Just six months ago, I would have lambasted local marketers for being obsessed with social media visibility and trying to force that obsession on small business owners. Now, our button on Facebook not only gives us incentive to encourage and advise businesses on how best to use social media, it also directly rewards highly visible and engaged businesses with free leads. To explain, when a user clicks “Get Quote” on a business page, the associated business can connect with that customer free of charge. In cases where the user requests additional quotes, we charge additional businesses on a pay-per-conversation basis. So, for the price of connecting with a single customer, a business can buy a promoted post and attract free leads from dozens of customers, which would also drive more billable quote comparison requests for us.
Facebook is more accustomed to competing marketplaces building their own Facebook pages to attract customers as cheaply as possible (even free), integrating Facebook sign-ins to increase engagement and essentially leeching off of Facebook’s user-base. After decades of being leveraged by businesses as a free form of advertising, Facebook has. Someday, Facebook may even decide to require a revenue share from the very companies that once leveraged it as a free form of advertising.
A Path Towards an Anti-Ad Ad Revenue Source:
There are two types of ads that people resent: poorly targeted ads and promoted posts (because they are a complete waste of time), and perfectly targeted ads and promoted posts (because they signify corporate use of what people consider to be their personal data).
Like the influencers who, in April, gained the ability to post-branded content, Facebook has to be careful because every new advertisement risks eroding trust, authenticity, and fan bases. So, although Facebook does not currently generate revenue from any of its new offerings, the offerings do create an ad alternative if the number of ads ever reaches a point that threatens user engagement. After all, monetizing customer initiated interactions wouldn’t negatively impact user experience; it would do just the opposite.
Just look at Facebook’s new suggestions function. When people request suggestions about restaurants and other business, Facebook will invite them to activate the Suggestions function which automatically links their friends’ responses to the address and Page of each suggested business. Normally, such recommendations would result in Google searches. Instead, Facebook retains the conversion data while creating seamless experiences for users. So, monetizing such a user-friendly function by initiating revenue shares for bookings, payments, or other activities on the platform would be a smart next step if it becomes necessary to increase revenue without increasing advertising.
When was the last time a single business-friendly feature went live on Facebook without a grumble from its notoriously sensitive user base, let alone dozens of features? Finally, here is a growth strategy that does not place Facebook’s business interests at odds with its community building imperative that does nothing to detract from the cat and baby videos that we crave but does everything to simplify our lives so that we can keep doing what we love.
Innovations like these are a win-win-win for businesses, Facebook, and the people who use both. And, in a social media terrain where competitors are vying for privacy conscious users who want to keep their social networks pure — without the taint of sponsored content — Facebook’s strategy, leveraging experiences and data to increasingly personalize, simplify, and, (I anticipate) monetize how people get things done, will be the reason that Facebook will be able to balance making a buck with making connections.
Manpreet Singh is Founder and President of TalkLocal, a local startup with apps on iPhone and Android which help consumers find and speak to high-quality local professionals in minutes. Follow him @MSinghCFA.