Brands back Facebook Deals

05 November 2010

SAN FRANCISCO: Big brands have signalled support for Facebook Deals, a new service for businesses that could boost tailored advertising.

The social network has already signed up 22 big brand partners, including Starbucks, McDonald's, H&M and Gap, for the initiative.

In addition, 20,000 small to medium-sized businesses are being invited to create their own customised offers on their corporate Facebook Places pages.

Using Deals, consumers can use the Facebook Places app on their mobiles to check the product offers, store opening times and contact details of nearby businesses.

The app will show which firms are offering promotions, including directions on where to find them.

Traders will be given the option of choosing from a range of deals, including digital versions of the traditional coupon or loyalty card.

Businesses which take advantage of Facebook's Deals service can offer promotional tie-ins to those customers who use the Facebook Places feature on their phones to "check in" at specified locations.

Merchants will use the feature to lure shoppers who are already physically nearby with one-off promotions, as well as to attract new customers looking to buy a range of goods and services in the vicinity.

By expanding the ways in which the social network can be used on mobile phones, including a single sign-on across multiple cellphone applications, Facebook could become a big player in the burgeoning local information and advertising sector which is already being exploited by Google and other tech firms.

Facebook's customer reach will be a major advantage, as 200 million of its 500 million members access the site on their phones.

Gap will be one of the first marquee partners, offering free blue jeans to the first 10,000 customers who check in to their stores on an unannounced date in the near future.

Facebook ceo Mark Zuckerberg said the company will not charge either users or businesses for the deals.

"For us, it is the ability to offer a great product to the people who use it," he added.

Facebook will also sell adspace for local businesses on their website, which they can use to signal their special deals.

Researchers believe that the new service could accelerate a shift towards far more local advertising on the web.

"The more Facebook users that are checking in and getting the offers from social media, the less they are going to want to flip through their newspaper and tear out a coupon, or read through their direct mail," said Debra Aho Williamson, a principal analyst at eMarketer.

Augie Ray, a senior analyst at Forrester Research, said the new service means that "now there is a really compelling reason for Facebook users to start checking in."

But with similar services already offered by Google and location-based networks such as FourSquare, "this is going to be a challenge," he added.

Mr Zuckerberg wouldn't say how many users Facebook had for its Places service, but said it was "multiples larger than any other location service".

Data sourced from Wall Street Journal; additional content by Warc staff