Facebook’s Deals service landed in Europe on Monday, three months after its US launch.
It has lined up various promotions in the UK, France, Germany, Italy and Spain, from brands such as Starbucks, Yo! Sushi and Debenhams, offering freebies and loyalty discounts when people “check in” to their “Place” via Facebook’s mobile app.
But the most eye-catching deal was from Mazda, which is offering 20 per cent off its sporty MX-5 at five dealers across the UK. That’s worth around £4,000 off the list price, just for sending a message to the average Facebook user’s 130 friends’ news feeds.
Facebook says it’s had more than half of the brands using Deals in the US come back for a second promotion, and the inbound interest was sufficiently large for the European launch that it’s been able to pick and choose the best offers to showcase the service.
But is a check-in on a mobile application really worth thousands of pounds?
Local advertising has long been seen as one of the great untapped revenue sources on the web.
Google has already done a fantastic job at allowing small businesses to target local shoppers via search and its maps service. With the Android mobile operating system and its recent creation of Places pages, Google is well placed to tap local businesses further. But it hasn’t quite closed the circle between online advertising and offline shopping – no doubt a consideration when it tried to buy Groupon, the daily deals service, for billions of dollars last year.
Facebook fielded plenty of questions about what impact Places Deals might have on Groupon. “I don’t think this will kill Groupon,” said Emily White, director of local at Facebook. “We don’t want to kill Groupon, they have been an amazing partner on a number of fronts.”
But it was clear from a couple of comments that Facebook really has Google in their sights here.
“We used to go to the internet to search for information,” said Joanna Shields, Facebook’s head of Europe, Middle East and Africa. “Today we mostly go to find out what is happening with our friends.”
Facebook is hiring plenty of Googlers at the moment, Ms White among them. She wouldn’t comment on how well she felt that her former employer had tackled the local market, except to say that the two companies approach it “from very different angles… search and people”.
To me, the difference goes further. Facebook is trying – and to some extent succeeding – to attract marketers to the web that have not previously been big online advertisers. Through Places check-ins and Deals, Facebook is able to connect online and offline marketing activity in way that similar independent services such as Foursquare lack the scale to achieve.
For instance, Gabriele Lunati, digital director at Benetton – not a name you see using Google Adwords a lot – told me that the clothing retailer has now realised it has “always been a social brand”.
“I think there is a parallelism between ‘the United Colors of Benetton’ and a social network,” he said. “We are going to increase the use of Facebook and other social media platforms. It belongs to a more complex digital strategy for Benetton that we will create this year and next year.”
Benetton sees 50,000 check-ins as a successful result for its Deals campaign, which donates €2 to charity for each.
“Retailers don’t actually care about eyeballs, they care about the faces in the store. [Deals] really helps connect that,” said Ms White. “Doing deals does drive ‘liking’ of pages. Over time that relationship will become more explicit.”
The camera-filled press conference and half-dozen stalls of supporting brands made today the biggest launch of a new Facebook product I’ve seen in Europe to date.
“This is a main focus for all of the company, both on the web and mobile,” said Ms White. “We have a saying at Facebook: ‘We are 1 per cent done.’ With this product and everything we are doing, if you let your mind run wild there are amazing things we can do. It will be informed and evolved based on how businesses use it.”
One of the aspects yet to be evolved is how Facebook takes its cut. Deals are currently being offered for free to brands, with a self-service system already up and running in the US.
“We start by optimising the user experience,” Ms White said. “We don’t want to shut the door on anything. We want to create phenomenal user and brand experience.”
Places isn’t worth anything to Facebook yet, but if some brands are prepared to give £4,000 discounts for a single check-in, it could soon be a big deal for the social network too.
