Blog: What Facebook Has in Store for Its ‘Places’ and ‘Deals’ Features

AN INTERVIEW WITH:
Emily White
Senior Director of Local
Facebook

Emily White joined Facebook in September 2010. She leads the company’s product, sales and marketing efforts to engage with local businesses and users. White spoke with eMarketer principal analyst Noah Elkin about Facebook Places, the company’s location-sharing feature, and Deals, its location-based commerce initiative, as well as Facebook’s perspective on the burgeoning geolocation market.

eMarketer: Facebook was a relative latecomer to the fast-emerging location market, but given the size of Facebook’s mobile audience, it immediately becomes the heavyweight in the space. Could you talk about how Places and Deals will evolve?

White: You and I know Facebook as the place where users connect with each other—where you’re able to find your friends and you know what’s going on in their lives. You can foster and in some cases even start relationships with those friends on the Facebook platform. And I think the most natural extension of that is into a place where users and businesses can interact.

In fact, it’s really an extension of how businesses have been using the Pages platform. We found that many local businesses started to use Pages as their main communication mechanism, so what we really wanted to do was enable an even deeper relationship between those businesses and their customers. And we picked as a starting point one of the biggest problems local businesses have had online, which is they’ve been told that they need to spend money on advertising and to create a local presence. But they don’t always know exactly what they get for it. The concept of check-in deals helps them start to connect the dots between what’s happening online and what’s happening in their store.

Likewise, we have 200 million users on mobile devices looking at Facebook on a really frequent basis. So why not have an additional feature whereby they can interact with a business in a meaningful way and get some value out of it, and at the same time provide merchants value related to what’s happening in their store.

eMarketer: Two things about Deals struck me as particularly interesting. One is that it’s free for businesses to participate. The other is that Facebook is not currently monetizing it in any way. With this base of 200 million very active mobile users, what is the longer-term plan for monetizing the connection between mobile and local?

White: This has been a frequently asked question since we launched Deals. And the only answer I have right now is we often launch features early in the product life cycle to get them out there, see how users adopt them, and then build a product around the usage we’re actually seeing in the marketplace. We felt like having any barrier around payment didn’t make sense if we wanted to drive really fast adoption from merchants. We wanted to see how merchants embraced it, and then go back and tweak the product flow in ways that were optimal for businesses and users. We’ll think about the monetization on top of that, if and where it makes sense.

eMarketer: A lot of players have jumped into the location space, so there’s fragmentation in the market. Given that Facebook has the largest overall user base, how do you see Facebook helping to resolve the fragmentation issue, especially in a scenario in which a consumer knows there’s a deal out there, but doesn’t know whether to check in on Facebook or on a Yelp, Loopt or foursquare?

White: I get about 10 emails a day from deal sites, and I don’t have time to go through all of them. This is a real user issue that is a clear result of all the excitement around this space. There is certainly a scenario where one of the players is going to successfully and elegantly aggregate this data to make it much easier for the users to figure out exactly what deal they should be looking at on any given day, or where, based on their location.

eMarketer: Does the open application programming interface (API) that Facebook unveiled in conjunction with Deals position Facebook as the potential aggregator of location data and check-in information?

White: That was not the intent of the API, but it certainly is a way for third parties to send us their check-in information if they want. From a merchant perspective, it’s helpful to aggregate the check-in data, and from a user perspective it’s helpful to aggregate the deals data. There are companies such as Yipit that are doing this already. The challenge for any of these other players is, are they the place where the users are? And is that the one place users are going to check in every day as part of their normal routine? This is really a greenfield area, and there’s a lot we’re going to find out over the next year.

eMarketer: When Facebook launched Deals, many media outlets inevitably described it as the foursquare-killer. Whom do you see as the competition in this space?

White: There are a lot of companies that overlap in this space, but I’m not sure I would say they’re all really competition. I’m also not sure this is a winner-take-all market. All signs right now say that users have different ways they prefer interacting day in and day out, and some of them are going to find that foursquare is just part of their life, and they really appreciate the game mechanics behind foursquare. Others are going to like the deal discovery that Groupon gives them.

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Blog: Facebook’s New Features Add (and Subtract) Ad Opportunities

Facebook this week announced one feature—Groups—that will offer new marketing opportunities, and another feature—the application dashboard—that will take away some of the ways marketers can interact with Facebook users.

Groups (which isn’t actually new, but a revamp of an existing Facebook feature) gives users new ways to communicate with their friends by forming small, themed groups. In a note on the Facebook blog, CEO Mark Zuckerberg said:

Until now, Facebook has made it easy to share with all of your friends or with everyone, but there hasn’t been a simple way to create and maintain a space for sharing with the small communities of people in your life, like your roommates, classmates, co-workers and family.

Although the initial rollout has been bumpy, in part because the email notification system inundated users’ inboxes with messages about group invites and activities, the Groups concept provides a window into how Facebook is evolving social communication and how advertising might play a role.

How Facebook is evolving social communication: Instead of using machines and algorithms to figure out how people are grouped (something Facebook does routinely in determining what gets shown in a user’s news feed), Facebook is giving users control to set up their own groups. The subtext here is an acknowledgement that algorithms can’t—or shouldn’t—do everything.

Another shift in tone: the idea that some communications on Facebook might actually need to be private. Until now, the primary message Facebook has delivered to the marketplace is the opposite: that it wants to help the world to share more, and share publicly. (Case in point: Zuckerberg’s bio on his Facebook page states, “I’m trying to make the world a more open place.”) Offering the ability to create a small private group that can’t be searchable is the exact opposite of that.

How Groups might incorporate ads: Initially, there are no direct advertising opportunities to target entire Groups. A test group that I created with a few eMarketer coworkers included ads on the right side of the group page, but each member of the group saw different messages, and none of the ads seemed particularly relevant to the group as a whole. Of course, as with most of Facebook’s new-product rollouts, the advertising implications are never an afterthought. Facebook’s ad-targeting capabilities to reach individuals will no doubt be extended to include groups. One indicator: A Facebook video promoting Groups shows an example of how someone could create a group for members of a soccer team. In the demo, an ad for ESPNU appears on the right side of the page under the word “Sponsored.”

The application dashboard adds privacy controls: Facebook’s application dashboard allows users to see more clearly than ever before which applications they have installed and what kinds of information these apps are using. This sort of clarity is long overdue, although as is typical with Facebook’s new feature rollouts, by providing more information Facebook opens the door to more questions. When I checked my apps, there was an indicator showing when each app had last accessed my data. According to Facebook, none of my apps had any “recent” data-access activity at all. I find that hard to believe, unless Facebook’s definition of “recent” is a very short timeframe.

How the dashboard might remove some marketing possibilities: The most obvious impact of the application dashboard is that it will give people an easier way to remove unwanted applications, thus limiting the number of applications that can communicate with users via their newsfeed or other mechanisms. This uninstall feature isn’t new, but it has been somewhat difficult to find.

The dashboard also lets users tweak some settings, such as the ability to send a user an email message or to access a user’s data when they are not actively using the app. Removing some of these things will change the ways apps can market themselves to users. Overall, the changes are positive for users, and apps that don’t use information inappropriately will have a better chance of not being removed or altered.

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