Andrew Li's Blog

In continuing with ruling the Internet, facebook’s new “Facebook Deals” entered the $10-billion online coupon market, most recently offering the service free of charge to Canadian retailers.  Facebook Deals work in conjunction with Facebook Places, where users “check in” to specific locations using their smartphone.  By “checking in” online for certain stores like H&M that have deals listed on Facebook Deals, users will receive discounts on purchases upon showing cashiers in store that have checked in.   Users will also have their current location shared with their facebook friends, allowing for word-of-mouth advertising easily being passed through social networks.

Facebook Deals

For all parties involved, it seems like a win-win situation.  Facebook users give up a little bit of privacy and in exchange for discounts at their favourite stores.  Retailers get to advertise for free through Deals and people’s facebook statuses in exchange for offering discounts.  While facebook will not be charging businesses for this service, they will receive further information about each individual user which they will be able to apply to their advertising revenue model.  While facebook says no personal information is shared with businesses, demographic information will be shared if the sample size of buyers is large enough.

In a blog post by Lara O’Reilly on Marketingweek.co.uk, she questions whether or not facebook’s new service is even a big deal.  Facebook Places has been touted as a killer of the popular social geo-tagging site “FourSquare”, and as well as a “Groupon killer”.  But as O’Reilly claims, “the arrival of near-field communications (NFC) and mobile contactless payment could be the “Deals killer” Facebook didn’t pre-empt.” NFC are automatic and requires less effort on the users’ part to look for deals. Regardless of whatever technology attempts to compete with facebook, marketers will have innovative social and digital marketing tools at their disposal.