Given the increasing pressure on Facebook’s leadership to come up with strategies that not only boost revenue but restore confidence in investors, it seems like there is no shortage of advice on how the company can better monetize their user base.
One thing I haven’t seen, and I am going to adventure here, is developing a mechanism that allows Facebook users to make purchases on other websites, using their Facebook identity.
From the merchant’s perspective, this new API would work much like Facebook Connect and the “Like” button, so let’s call it the “Buy” button.
Facebook’s main challenge right now is figure out ways to increase revenue per existing user, and quickly. Without discounting market development efforts currently underway that will likely determine an increase in the social network’s popularity in countries like China and Russia, where they are not the main player as of now, the fact of the matter is that Facebook will never again experience the massive growth of its early days.
Facebook is a rich pool of demographic data waiting to be used by marketers. Newly added features to Facebook pages for businesses that allow brands to tailor their messaging beyond just location and languages spoken are welcome and should increase engagement. However, targeted display ads have been found to under deliver to marketers’ expectations.
The company has also been harshly criticized for poor mobile experience by consumers, and lack of of an ad strategy by marketers. With mobile traffic about to overtake that of desktop computers, figuring out how to make it easy for consumer to engage across screens is critical.
Introducing the “Buy” button
On the other hand, earlier attempts to turn Facebook into a shopping destination are a great example of what happens when we ignore the context in which people do the things they do. F-commerce, as it came to be known, failed to realize that people go to Facebook primarily to interact with their friends, and not to shop. To paraphrase a Forrester analyst, it was like selling stuff to people while they are hanging out with their friends at a cafe.
But, what if that cafe had a loyalty program that benefited from the purchases you made everywhere else too. Or better yet, what if they offered a universal payment system that worked as a wrapper to your current credit cards? In other words, instead of bringing the stores to Facebook, take Facebook to the stores where consumers already do their shopping.
Facebook Credits already allows users to store payment methods for purchases within the platform, so it is conceivable that an external API could be built to provide a mechanism to use a Facebook account to make purchases elsewhere.
This could extend to brick and mortar stores through gift cards issued on the site or coupons, which are already a popular item offered by brands on their Facebook pages. After all, if people can pay for sow on Farmville, why shouldn’t they be able to pay for a meal?
I know this is a bit out there, but hey, why not? If not Facebook, whoever figures out a compelling way to make consumer identity not only mobile, but portable across devices, will be developing have a huge advantage for years to come.