Facebook has a plan to squeeze more ad dollars out of ecommerce sites and anyone else selling products on the web. It’s quietly testing a new version of its Offers coupons that can be redeemed at online stores, not just at physical shops. Sources clued us in and Facebook has now confirmed with me that users will see Offers in the news feed, ads, and Sponsored Stories that feature a promo code or special link to click through for a discount on off-site purchases.
Similar to how the existing version of Offers lead to foot traffic and revenue for brick-and-mortar stores, big brands with web stores, ecommerce hubs, and celebrities with merch to sell could soon use Offers to drive sales. Coupons like “Take $5 Off A Purchase Of $50 Or More” can produce real return on investment. So while they’re free to run, businesses will pay Facebook to show their Offers to more people.
This is why you can’t judge Facebook’s future earning potential by today. The social network has plenty of revenue cards up its sleeve.
Facebook is only testing Ecommerce Offers with a small number of clients, but if successful it could roll out to the self-serve interface the same way Brick-and-Mortar Offers did last week. It ran a smaller test of a predecessor to Offers called “Coupons” in December, as Inside Facebook reports. There’s no time table for when Ecommerce Offers could become publicly available.
Ecommerce Offers opens the coupon product to more than just your local cafe and brands with physical locations. That’s crucial for Facebook as many of the site’s most popular Pages don’t have brick-and-mortar stores or also have web stores.
Here’s a few offers you might see soon:
Ecommerce Offers will be even easier for businesses to adopt than Brick-and-Mortar Offers that cashiers have to be trained to redeem. Most ecommerce sites already have a place to enter promo codes at checkout. Facebook could provide a single, unlimited discount code if a businesses wanted users to be able to share it. Or Facebook could generate a unique, single-use code for each user that sees an Offer if businesses want to make it “fans only” and encourage people to Like their Page.
Codes could be distributed via the news feed, or users could be required to give a business their email address and receive the code there. Above is a screenshot from Inside Facebook’s Brittany Darwell from when online purse shop Kate Spade tested the product last month with email delivery of a promo code. Alternatively, users could click through a special Offer URL to have the discount pre-applied to their shopping cart.
Beyond organic news feed distribution, businesses can pay to buy Sponsored Stories that promote their Offers to friends of those who’ve claimed them. These ads appear in the Facebook.com sidebar, or the web or mobile news feed, and would say “Josh Constine claimed an offer for $10 Kanye West concert tickets” in hopes of getting my friends to do the same. Businesses can also buy standard sidebar ads displaying their offers, and layer †additional targeting parameters on either type of ad.
For years, small businesses, bands, and brands have been buying ads to increase their Page Like counts, but how these fans translated to sales was unclear. They could send these subscribers marketing messages through the news feed, but convincing users to click off-site and away from their friends was difficult. Meanwhile they could pay for ad clicks, but those didn’t necessarily turn into downstream purchases. Facebook Ecommerce Offers bring ROI into focus. You pay for ads or fans to get more views of your Offer, and users spend while redeeming them.
Facebook will need to make sure Ecommerce Offers is successful, and even then there’s no time table for when the product will become publicly available to businesses. For now, brick-and-mortar merchants can use the self-serve tool to create their own offers.