In just five-and-a-half years, Facebook has morphed from a network of four or five million college students in the US into a massive social network of over 500 million. It's also gone from banner ads and text links to an advertising medium that's completely transformed the way brands talk to their customers. Now Facebook has taken another big step in its social marketing journey with the launch of Facebook Check-in Deals in New Zealand, a geo-location innovation that allows users to look for relevant offers and discounts on the fly—and tell their friends about it in the process.
Facebook's Australasian big cheese Paul Borrud says the appeal of the site for users lies in its relevance and, in essence, its success as an advertising medium can be put down to a simple, but powerful concept: word of mouth. Friends trust friends, particularly in these cynical times, and, with the average of 130 friends, there's obviously a big multiplier effect (at the launch of Google's social coupon effort +1 recently, chief executive Eric Schmidt admitted his biggest failure in the role was missing out on "the friend thing"). Now, however, Borrud says "it's about taking the customer out of the web and into the store".
What he always tells advertisers is that they need to think of Facebook the way the users think of it.
"They're sharing hiking trails, restaurants, or good deals. You want to be that person who hooks up your friends...If brands and agencies can create unique, compelling deals, that will determine how successful this will be," he says.
The ability to Check-In automates that status update process, he says, and, if someone accepts a deal, it shows up in the newsfeed. For anyone who's had to put up with the incessant Foursquare Check-Ins on your Twitter feed that say things like 'Bruce is now the mayor of the Onehunga Tavern', this could be seen as an annoyance. But Borrud points out that Facebook prides itself on creating non-invasive advertising and users are always able to change their settings and block the deals from coming through.
For the Beta launch, McDonald's and Hyundai are the two local brands getting involved. McDonald's is offering an individual deal, where customers can choose between free fries or a sundae, while Hyundai is offering a charity deal, with $10 donated to the Spirit of Adventure every time someone checks in at a dealership (Rugby World Cup 2011 is also involved and allows you to Check-In, but isn't offering any deals).
Businesses need to have a Facebook Place or Page to offer deals (there are four kinds: individual, loyalty, friend and charity) but it's free to get involved. Borrud says the cost comes from the value of the offer and the advertising each company might decide to do on top of that to promote the deal.
Facebook has already launched Check-In Deals (different to the Groupon-style Facebook Deals) in the US and the UK and he says they've been very popular so far, both with users and advertisers. In the US, Gap gave away 10000 pairs of jeans to the first people to check-in at various stores around the country and gave a 20 percent discount to the ones who missed out. And through Facebook Connect, it's also aiming to expand Check-In into other e-commerce sites and up the personalisation, just as it has done with the CNN Facebook feed that shows what articles friends have read and recommended.
Of course, none of this could have happened without the swift evolution and uptake of mobile technology. As smartphones get better, as tablets fly off the shelves and as data gets cheaper, the internet is everywhere. Borrud says there are 250 million Facebook mobile users around the world and they're twice as active on the site compared to 'traditional' users.
As we've all seen, daily deal sites are popping up like mushrooms in New Zealand and around the world and, interestingly, big international players like Groupon and Living Social, which arrived late to the New Zealand party, don't actually seem to have made much of an impact. These sites all offer relatively similar things. But the big difference with the Facebook Check-In deals is that it has the scale to make it work and, because of the ability to incorporate geo-location, the deals become just that little bit more relevant and timely.
There's no doubt consumers like getting good deals. Always have, always will. But, as this innovation shows, there are just new and more efficient ways of delivering them.
For a full run down of the new innovation, download the pdf. Facebook Check-in Deals Beta (USA)