Why Facebook Deals Isn’t a Game-Changer

Filed in Featured, Local Search, Social Media by Matt McGee on November 4, 2010 13 Comments

facebookFacebook’s latest attempt to tap in to the local/mobile scene came out on Wednesday. It was actually a series of announcements, with Facebook Deals as the centerpiece. Greg Sterling wrote up an excellent overview on Search Engine Land, and here’s the Facebook announcement.

I’m not at all convinced that Facebook Deals will change anything. It may be a nice add-on marketing tool for certain businesses, but I certainly don’t think it puts Foursquare, Groupon, or any other local deals-based service out of business. Here’s why I feel this way:

1.) Didn’t people say the same thing about Facebook Places?

That was supposed to be the death knell of Foursquare and similar services. Just last week, Business Insider reported that Facebook Places has 7x more users than Foursquare … but they’re not actually using it. It’s a very similar piece to my Facebook Places a Week Later: Using It? from August.

2.) Didn’t people say the same thing about Google Coupons?

Google added a coupon feature to the Local Business Center (now called Google Places) years ago … like 2006 or so, I believe. I wonder how many small business owners (in general) are aware of it. Probably a tiny fraction. I wonder how many small business owners who’ve claimed their Google listing are aware of it. Probably another small number. Anecdotally, I don’t see a ton of coupons being offered via Google Places. And while I haven’t seen any numbers on adoption, I think we can all agree that Google Coupons did not change the local marketing landscape.

3.) Facebook Deals will probably be most beneficial to Big Companies.

Logic suggests that recognized brands are most likely to be “liked” on Facebook. There are successful small business owners using Facebook and developing a following. But the impact of offering deals to your Facebook followers is somewhat limited when you have 300 Facebook followers. Let’s face it: There’s a reason why all of the initial Facebook Deals partners are Big Companies like JCPenney, Gap, Starbucks, REI, and so forth. They have an enormous base of followers on Facebook and should jump at the chance to take advantage of it. But I don’t believe small businesses will get the same impact.

Are You Saying Facebook Deals is a Waste of Time for SMBs?

No, not at all. What I’m saying is that, for many small business owners, I think Facebook Deals becomes just another venue for trying to get deals out in front of interested customers — no different than Valpak, Foursquare, Google Coupons, and so forth.

Facebook Deals probably isn’t a waste of time if you have an active presences and fan-base on Facebook. Use it. Give it a try. But I wouldn’t expect it to be a game-changer for the vast majority of small businesses who do.

Maybe this is just my natural disinclination towards Facebook coming through. Am I wrong? Comments are open. Tell me what you think Facebook Deals means.

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  1. Samuel says:

    I agree Matt. It could only help other sites like Groupon and the likes because competition is good for everybody. Consumers will end up buying more as prices get driven down, and everybody wins. Isn’t capitalism great.

  2. Jeff says:

    I would argue that it allows SMBs to compete on a somewhat level playing field. If I like a local coffee shop, and IF they’ve developed a FB app they would have plenty of ways to get me to download it. At that point that can make LBS offers just like Starbucks could. The difference – Starbucks could offer a free musical or ebook download through corporate partners; the SMB would be hard pressed to follow suit.

  3. Frank Reed says:

    With everything being so fragmented in the online / Internet marketing space it’s hard to imagine anyone, even the mighty Facebook, coming in and taking over a space completely.

    I just wrote today about the adoption rate of location based services in total (about 4% of total online adults) according to Pew. With the market size being that small the one thing that Facebook could do is make the industry scale but not become the 800 lb gorilla. Especially considering the trust issues with Facebook.

  4. Ruud Hein says:

    I think the “also” argument you put forward is something that more or less applies broadly on the web. When we say Facebook killed MySpace we’re still talking about a channel with 18 million active users — many of which are very passionate.

    What’s interesting about the Facebook Deals is that it might push the use of Facebook Places, right?

  5. Polle says:

    There are dozens of Location Based Services (LBSs). All with relatively small user bases, isolated data silos, different features and options. Reach has been an issue, media darling 4SQ has 3 million users globally. Also, LBSs are mainly used by young males. (Forrester reports)

    Facebook Mobile has 150 million users and could introduce LBSs to the masses, giving it the scope and reach needed, plus a much wider target audience, so more interesting for marketers that don’t target the young guys.

    I agree that SMBs just have to give LBSs a try and create some kind of presence on different platforms, but when there’s a need to focus your efforts, I would definately include FB Deals in the mix!

  6. You’re not wrong at all, but I disagree with the title a bit. This will be a bit of a game changer. That’s because it will get many smaller, localized business to view digital as a marketing sales tool as opposed to simply have a brochureware website.

    You’re quite right. All of your points are spot on. 300 fans isn’t all that much. But the key difference here is that it gives a company a direct thing that they can offer their guests. It’s easier to develop a relationship with customers the way Facebook is set up as opposed to, say, FourSquare.

    One thing though. Google’s Small Business Center came way too soon. It probably still too soon for all of this too really take off.

    I think it’s a game changer in that it will cause a lot of smaller companies to review their online presence. How far it will go on its own merit will be a matter of how effectively Facebook markets itself.

  7. John says:

    This is just a casual observation from someone who has no stats on FB or foursquare, groupon or google coupons. I think FB has far greater reach than everyone else. If FB implements a new app I think its users will gradually adopt them. I may be wrong on this but aren’t FB deals essentially free to the user, unlike groupon? Doesn’t the user go to the location, check in & get a discount, or something to that effect? I just feel that FB has so many active users on mobile phones that will eventually participate. If that is the case how can it not do well?

  8. Aaron says:

    I’m not in the “is” or “isn’t” camp on this yet. I’ll take the easy middle ground. Comparing it to G Places isn’t apples to apples in my mind. ALL of Google’s tools are not user friendly for the small biz/non-tech person.

    I think that Facebook having many small business owners as personal FB users is a step up so they might see it from the consumer side too. What’s the percent of Foursquare users that are SMB owners? Miniscule I would guess.

    It will be interesting to see what FB does to market the tool. They have a change to get users on board with it … will they waste it or crush with it?

  9. The main drawback that I saw about Facebook Deals is that you have to physically be at the location to register, and their scheme seemed a little complicated for what it accomplishes. I’m sure some businesses will run with it, and a few will make the big buck, until someone finds a crack.

  10. Joe says:

    I feel small business in certain demographics will be able to take advantage of this. Especially with the night scene in downtown areas. There are not a lot of corporate or giant companies in the heart of many downtown districts, which is where local bars, restaurants and other locations could strive with places.

  11. sasha says:

    Yea, facebook has become so big and bulky. Its hard for me to even navigate between all the different apps and services it offers. I can definitely see the appeal of using a different service just because it was made for one specific thing and that is what it does best.

  12. uchu says:

    It could only help other sites like Groupon and the likes because competition is good for everybody

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