Facebook’s platform boss Ben Ling was speaking at ChannelAdvisor Catalyst last week and had some interesting stuff to say about the social network’s e-commerce strategy.
One thing that stood out was that it has seemingly not given up on the ‘Beacon’ ads for online retailers that caused such a furore last year.
The system, which would have broadcast details of members’ purchases from third party sites through their Facebook ‘news feeds’, was cut back dramatically after consumer protests.
But Ling said it was still looking to pitch it to retailers:
“We have a programme that is essentially a social action publisher. It enables publishers to be able to feed actions back into Facebook.
“We are starting on content sites where things are ‘inherently social’, and then we are going to continue up the chain where things like purchases can be incorporated as well.”
On paper, the scheme seems like a no brainer for retailers. Stats show Facebook is growing as a source of traffic to retail websites and is keen to position itself as a huge viral marketing engine where shops can generate targeted traffic through user referrals.
Facebook originally planned to offer the service for free, in return gaining behavioural data and enhancing awareness. One also imagines it will be more careful about how it is communicated to users, and the levels of user control that would be introduced, meaning that – theoretically – there would be less of a brand risk.
Ling said the system would depend on user authorisation and admitted it had to tread “a fine line” with privacy. But the question is how many consumers will want to share that information if Facebook truly puts them in control? Maybe it will depend, ultimately, on how useful it is.
On a wider level, Ling also had some more details on Facebook’s upcoming e-commerce plans, seemingly a vital part of the site’s efforts to start making money out of its 70m+ membership.
He said the social network’s long-rumoured transaction processing system was “coming shortly” and would offer third party application developers the chance to take direct payments from users.
He added that the system is being provided by a partner, rather than developed in-house:
“The basic idea is we will be building native support for applications and merchants to take credit card payments. It will be a seamless one-click experience and the same experience for all users. It will enable new types of monetisation for developers and retailers.”
So who is the partner? Google (Ling’s former employers), Paypal, Microsoft or even Amazon, which is coming out with a new payment system and is already looking to exploit the social network’s merchandising potential? Or perhaps a new entrant?
Whoever it is, we think Facebook’s ultimate aim is to become a serious player in payment processing on and off its site, using referrals to drive sales and retailer partnerships.
Many retailers are sceptical about Facebook’s potential as an e-commerce channel, saying that as with webmail, users aren’t there ‘in buying mode’. But according to Ling, the site already has “tens of millions” of credit card details on file, thanks to sales of its $1 ‘virtual gifts’ (icons, smilies and so on).
If that’s accurate, well, that’s quite a headstart. It’s going to be really interesting to watch this unfold, and to see whether Facebook’s users embrace this in their droves.