New tie-up points to Facebook future

25 June 2012

LONDON: Unilever, the consumer goods giant, has formed a tie-up with Facebook, the social network, on a not-for-profit scheme that could become a test case for how the latter company might generate future revenues.

The new initiative, called Waterworks, will see the two firms ally with PSI, the health organisation, to assist Unilever's previously-stated aim of providing safe drinking water to 500m people across the globe.

Using a Timeline application, web users taking part will be connected with "real individuals and communities in need", and set a daily donation rate from 0.10 upwards, in partnership with a Waterworks representative.

Some 75 “Waterworkers” will initially be appointed, working in communities like Bhopal in India, providing education about clean water, distributing Unilever's Pureit water filters, and updating their Facebook sponsors.

According to Unilever, the fact this project is "social by design" means a "community of support" will result in the spread of powerful stories to "friends and millions of friends of friends".

"We want to leverage the power of the social graph and the ripple effects that each person's actions can create, to inspire and enrol many more to make a difference," said Keith Weed, Unilever's chief marketing officer.

"On Facebook, nearly a billion people take small actions every day, they connect to the individuals and organisations that matter most to them and they discover new things through their friends."

Participants in this programme will also be able to transfer their donations using Facebook Credits, the site's virtual currency.

Miles Young, chief executive officer of Ogilvy & Mather, an agency network owned by WPP Group, suggested this kind of scheme may allow brands to locate "valuable" users on Facebook and understand their spending habits.

"Facebook is starting to realise its biggest asset is its data and its customer base, and if it can monetize that, that will be the answer," he told Bloomberg. "Then we'll stop worrying about it being an effective advertising medium or not."

Such a goal has become more important following the high-profile decision of General Motors, the automaker, to abandon using Facebook ads, and questions surrounding the organisation's IPO.

In a bid to enhance the targeting capabilities available to its customers, Facebook has announced plans to provide real-time bidding for ads based on member behaviour, as employed by other firms such as Google.

Facebook has 900m members, but made only $3.2bn from advertising in 2011. A recent poll by Reuters and Ipsos also found 80% of users had not made a purchase due to ads or comments on the site, making new revenue sources key.

Data sourced from Bloomberg; additional content by Warc staff