YOU ARE WHAT YOU ARE INTERESTED IN
When
Facebook bought Karma (one of the leading gift sites) at the end of 2012, it
was pretty clear that we were going to see a second iteration of Facebook Gifts
- especially as the holiday shopping season started to heat up.
Socially-informed commerce in various forms and shapes has been around for
quite a while, but we’re at another major inflection point now because of the
impact of hyper-personalization and the far more precise and cost-effective
targeting which is now available.
Keep in mind that it’s a long-established
principle that, if you give a consumer too many choices, they are far more
likely to buy nothing than if you give them a limited and more relevant
decision set. New young companies like Chicago-based Local Offer Network are
jumping into this particular space as well with tools that deliver the “exactly
right” offers to consumers visiting a site even the first time that the visitor appears. I call
this “smart reach” and Facebook will be all over it – especially with Facebook
Exchange.
Given the tools and resources that Facebook increasingly has at its disposal,
they can now make the gift selection and giving process far more successful for
the donor and also make the recipient far more likely to be happy with the
gift. Remember that the excellence of a gift lies in its appropriateness, not
simply in its value. And there are other important ancillary benefits as
well. One of the reasons people get divorced is that they run out of gift
ideas. Ergo – better gifts – less divorces.
So there's no question that this latest foray into "f-commerce"
is going to be a big focus for the Facebook team along with a couple of other
"interest graph-driven" initiatives like Facebook “Collections” which
is their initial salvo in response to the explosive growth of Pinterest. If you want to get some idea
of how interesting and accurate gift giving becomes when it's informed by
detailed data about the interests and preferences and buying history of the
friends and peers for whom you're trying to select a present, take a look at
shopycat.com which is actually a product created by Wal-Mart Labs - but very
cool nonetheless.
If you are
more of a metrics person, here are some numbers to keep in mind – when a
“friend” refers and/or recommends that someone they know take an action on the
web – the impact (as compared to a simple ad solicitation) is major:
recipients are 15% more likely to download something; 8% more likely to buy
something; and – most importantly – when they do buy, the average order size is
22% larger. That’s a lotta lift.
What's less obvious
about the new gift-giving initiatives (the Lightbank/Groupon gang also
invested in Boomerang in 2012 which is another gift site) is that, from
Facebook's perspective, the dollars generated from gift purchases may be
nowhere near as valuable in the long run to their enterprise as the purchase
decision data which will be made available through these transactions as well
as the implicit and explicit “connections” which each and every gift
transaction will establish between their members. You can just imagine the
opportunities for follow-on sales and service and the cross-marketing
possibilities that each gift will create.
As I like to
say, “personal data is the oil of the digital age” and Facebook increasingly
owns the primary pump. And because birds of a feather flock together,
other analytical tools will help correlate purchases with the buyer’s presence
in defined communities and other likely behavioral groups. Data, data and
more data with virtually no acquisition cost and high degrees of precision and
accuracy.
So the real “news” about Facebook Gifts is that we’re continuing to see more
and more indications of the next major seismic shift from the relatively simple
social graph to the deeper interest graph. Because we (and Facebook in
particular) have pretty much cracked the code on personal data and demographics
(empowered in real-time by high-velocity computing), the next hurdle is pretty
clear: “tell me what you’re interested in and what you pay attention to and I
will tell you who you are”. And basically, if you’re not where your
targets and customers are and a relevant part of their world, you’re nowhere.
This is really where both Instagram, Aviary and Pinterest loom large.
As we see
better and better tools to interpret and identify (and categorize) visual
materials (photos and other images with videos to follow in the near future),
we will see more and more emphasis on and influence of the players who are
successfully aggregating these huge treasure troves of visual information.
After all, a picture’s worth about a million words these days if it’s the right
picture.
And
speaking about the future and gifts reminds me that the future isn’t a gift,
it’s an achievement that we work for and earn every day. Hard work is
what makes our dreams come true.
But Facebook really is like a powerful
steamroller and it rarely stops changing the rules of the game - and thereby -
the world that we all live in today. The
addition of Facebook Graph Search is really another major brick in the wall.
But it’s really a double-edged sword that will take some serious getting used
to.
I’ve been worried for a while about the
filter bubble and how narrow the search process was becoming as it increasingly
morphed from a window on new worlds to a mirror reflecting back to us basically
what we and our friends already know. Our peers are important, but how would
you learn anything new if search was simply an endless loop?
I was also concerned about the death of
serendipitous discovery which is the sheer joy we feel at a bookstore (remember
those?) or a flea market (remember those?) when we come across something new
and amazing and totally unexpected and it just makes our day. You didn’t even
know you were looking for something, but you loved it when you found it. And,
of course, in search terms, you could never have constructed a query to find
something you weren’t seeking.
That’s why I’m excited about Graph Search and
why it will actually enable and enhance a lot of businesses (besides
Facebook’s) which could include yours once you understand some of the basics
beneath the buzz.
First and foremost, GS is a return to the
earliest days and, in fact, to the origin of Facebook. Think about it (even if
you’ve only seen the movie) – it was about finding pictures of the hottest
women on campus. And, clearly, it wasn’t about women you knew (search); it was
about women you wanted (desperately) to know (discovery).
GS takes the blinders and the filters off of
the painstaking process of conscious search (does anyone really want to check
out all of your friends’ profiles one at a time?) and opens up a huge amount of
additional social and personal and interest material that was always there, but
which is now readily accessible. Broad content queries constrained by the
limiters and filters of your friends is an elegant way to get right to the heart
of the interest graph.
Two simple examples – how much better would a Groupon deal
do if in 10 seconds I could ask Facebook which of my friends were already
participating in the deal? Or have Ticketmaster’s
concert seating charts (enabled by Facebook integration) show me which of my
friends already have tickets to the show and where they are sitting?
So,
as you start to think about how to position your business and your product and
service offerings in new ways to make them discoverable and sharable thru the
new power of Graph Search, keep in mind the following three aspects of GS:
(1)
Aggregation – GS does the heavy lifting for you and assembles the
data and results of your friends’ likes, preferences and interests across
whatever cuts and selections you care to make and permits you to interactively
build on your questions and broaden or narrow them on the fly. Single friends
with MBAs who are living in San Francisco and working in the entertainment
business? You got it in a flash.
(2)
Filters – Instead of limiting your queries or your results in
the background in ways that were never really clear, filters now take on a new
ability to help you frame your selections, criteria and choices in ways that
avoid overwhelming and unwieldy results and permit you to dictate limits of
scope, time, location, images, etc. Friends who loved Inglourious Basterds and
are actually up for going to see Django with
me? Try that on Google.
(3)
Engagement - For now, and this may change, assets like photos are
“valued” and ranked and displayed in engagement order which – in Facebook terms
– means that the more likes and comments a particular photo has, the more
likely it will be to be surfaced. The reason I think that this criteria is in
flux is that it’s highly likely that the volume of activity around a photo may
be exactly why it’s the least likely photo that the person shown in the photo
wants circulated.
We’re headed into the next big burst of
Facebook-enabled commerce (f-commerce) and increasingly millions of customers
are going to be living within this Facebook economy and nowhere else. If you
doubt that, just check out how many times the Facebook team during the launch
events repeated the idea that “you never have to leave Facebook” to do anything
that you want to do.
Each of these components of the new GS engine
will change many of the ground rules for how (and whether) new and small
businesses will be able to make themselves heard and get their messages out to
their prospective customers in the clutter and the crowd. It’s not going to be
easier, but it will definitely be more interesting.
Here’s one last word of advice. One of
the great internal mantras of Facebook regarding the creation of all social web
content is: what will make them care? and what will make them share? As you
bring your products and services to market, keep these two questions top of
mind.
