As of yesterday, Facebook’s new “Groupon killer” is live in five cities, including Dallas: Facebook Deals.
The idea is not new, but the execution and consequences are. It works basically the same way as Groupon. Facebook rounds up “deals” from local businesses (yes, Facebook knows where you are) and puts them up for mass buying – the idea being that everyone wins. The venue offering the deal gets value in volume of people participating, the consumer gets a good deal, and Facebook wins, too (how? Well, they’re not saying how.). It is important to differentiate between Deals and Check-In Deals. Check-In deals are free for merchants to offer and are offered only when the user checks into a venue on their mobile device. Here is a screenshot of a bit of my Deals landing page, though I have not yet “opted in”:
[pic... that I can't get to load]
When you opt into these deals, they will by default be delivered by email (the Groupon match) and in your news feed (the Groupon killer). I presume the emails can be stopped by navigating the preferences, but good luck with that. It’s not in Facebook’s interest to slow that train down. As you can see in the screenshot above, your friends can “like” the deals even if they don’t buy the deal. Even further, the deals are displayed to you with a notification that Friend X, Friend Y, and Friend Z already “like” the business this deal is from.
If you decide to buy the deal, you can pay with a major credit card or with Facebook Credits. This marks the first time that real goods may be bought with Credits (technically, Credits buy vouchers, not real goods, but…you know). Facebook isn’t talking about the profit splits, though. By default, the deal you bought is posted on your profile, unless you uncheck a box that indicates it will do so. You can also buy deals for friends as gifts – it will be interesting to see if those deals are posted to the Friend’s profile (I presume they will).
According to Facebook’s downloadable “Deals Guide for Businesses [Alpha]“:
We’ll distribute your deal in 8 ways
We’ll help you quickly and easily get the word out about your deal so that you
can focus on providing a great customer experience.
1. The Facebook Home Page: The Home Page is the first thing that people see when they log on to Facebook. There is a Deals
link in the left-hand navigation column, so that people can find and buy your deal easily.
2. The Deals Page: This page shows your deal, along with others that are available for purchase in a given city.
3. Sponsored units: Your deal will be eligible to appear in a Sponsored Deals unit on the right-hand side of
the Home Page. This unit shows people friends that have liked or bought your deal and
lets them buy your deal directly.
4. Personal messages and Wall posts: People can send messages about your deal to their friends or share your deal on their
Wall. This makes it easy for people to make plans together.
5. News Feed stories: News Feed stories appear on the Home Page and give people information about their friends.
When people interact with your deal, News Feed stories will help spread the word about what
you’re offering in a natural and relevant way.
6. Onsite Notifications: We’ll notify people when friends like or buy a deal that they have also liked. We’ll also tell
people when their friend buys a deal for them.
7. Deals tab: Your deal is eligible to appear on the right-hand side of any deal that is currently running on a Facebook Page.
8. Emails: We’ll email people when friends like or buy a deal that they have liked as well. We’ll also send daily emails to people who have subscribed to our Deals updates.
Whoa. That’s a lot of sharing. It’s practically a pile a golden-fried bacon – anyone with a functional brain and an interest in advertising is salivating.
Well, so what? Now that we’ve covered the facts about this new service, let’s talk a little about the consequences. First of all, this is not a market where only one “deal” platform can win (short of blocking Groupon sharing from Facebook). By my previous posts, you’re aware that I’m primarily concerned with Facebook’s ability to seamlessly leverage the identities of its users to make money and what the future implications of this coup of control might be. To put it in a more plain way, you have the choice to put on a shirt in the morning that says “FACEBOOK”, and the average Joe is aware that by wearing that shirt, he is representing Facebook and showing that he supports it. No one shows up at Joe’s house and says “Joe! I’ll give you half off your lunch if you just wear this shirt!” By buying Deals, the average Joe is advertising to all of his friends for that company. That company then is able to leverage Joe’s support to convince his friends to support it too. In the end, that company has become a part of Joe’s identity – his friends will potentially remember that pairing for an indefinite amount of time (we are already trained to associate brands with people, afterall).
On the bright side, maybe this will wake people up and let them understand in a very real way that their online actions are not so private, anyway. The hoops that you have to jump through to not share on Facebook is nothing compared to what’s being tracked and sold “out there” beyond Facebook.