Facebook wants to extend its services into every corner of the open web. Since the launch of the like button, they have been doing just that.
Their most recent addition was the Send button, which makes it easy to send private messages to individuals or groups of people.
There are numerous social plugins they could add to their library from here: micro profiles that would appear on hover over peoples’ names, RSVP buttons, and more. But, the one that has me the most intrigued is the Buy Button.
Facebook Commerce Is Next
Facebook is clearly laying the foundation for commerce inside Facebook. SSL connections are now available making it possible to have secure connections for transmitting financial transactions.
Their virtual currency program is a strong line of business for Facebook, currently focused around social games and the buying of virtual objects. It’s only logical to assume that they will be extending it to real goods soon.
Sure, PayPal and others have offered buy buttons for years now. They didn’t take over the market and the market they do serve is currently taken. And, Google tried to get into the business with Google Checkout and it has not proven to be a significant revenue source for them.
So, what makes me think Facebook would be successful with a Buy button of their own?
1. An Established virtual currency
Credits is projected to be as much as 40% of Facebook’s total revenue by 2014. If all Facebook was successful at was extending the use of Credits onto the open web, that would be a huge line of business for them. And, this is an area that PayPal, Google Checkout and others have not played in before.
2. Niche and indie brands are skipping websites for Facebook
Checkout the “website” for http://www.VitaminWater.com or http://www.PepsiMax.com. Their URLs redirect to a Facebook fan page.
Start ups, small businesses, and boutique brands are also deciding to build a Facebook page as the cornerstone of their online presence instead of .coms. This is by no means a trend of brands getting rid of their websites, rather a trend of people starting a Facebook presence first and maybe never progressing past it.
For those brands, a Facebook commerce solution is their only logical choice. And, there’s a long tail of brands that fit into this trend.
3. Integrated conversion tracking for ads
Right now, Facebook can’t tell you if your ads on Facebook did anything other than land a fan. You have to use analytics solutions, like the one I work on at Webtrends, to answer the question of which ads are driving shares, lead gen, sales, etc.
If Facebook offered a Buy button, they could easily tell you a lot of great data about what’s driving conversions. And, they could take a step further than 3rd party analytics companies because they could give you demographic, geographic, psychographic, and more profile data related to the actual purchases–not just who saw your ad.
Potentially they could stitch that data together across multiple visits too.That is something PayPal or Google could never do and it’s super hot.
4. Compelling incentives to encourage vendors to switch
Facebook offers additional functionality to brands that use Credits if they make Credits the primary currency of their game/app. Facebook could just as easily offer premium features to major ecommerce vendors, such as profile data on transactions and the ability to optimize or retarget.
These could easily be powerful enough incentives for ecommerce websites adopt a buy button. Complex online stores would need an SDK rather than simple Buy buttons, but you get the idea.
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These are several reasons why I think the Facebook Buy button would be a huge success. I’ve read Forrester’s recent report suggesting that Facebook commerce has no future, but if you actually read the report their point is about store fronts inside Facebook, which I agree will not replace ecommerce website.
We did a Facebook commerce study at Webtrends along with Adgregate Markets that shows Facebook storefronts do better than what Forrester found. They missed some important factors, but that’s the subject of another post.
More important is the fact that at the end of the report they acknowledge that Facebook as a social layer that enriches established ecommerce sites has a strong future, which is what Buy buttons and a commerce SDK would offer.
Do you think Facebook Buy buttons would be successful?