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Facebook Deals Unveiled, Goes Head-on with Groupon

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It is no secret that Facebook wants to own all parts of the social Web. Quickly following Facebook's announcement of its new Send Button, The New York Times broke an embargo about Facebook's next step in world domination, Facebook Deals. Today, Facebook began to test its new deals platform in five cities: Atlanta, Austin, Dallas, San Diego and San Francisco.

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Facebook's test project in the local deals industry places the social network in direct competition with Groupon and LivingSocial. Like the existing coupon-based services, Facebook Deals will appear in users' email inboxes. In addition, relevant deals will appear in users' news feeds.

Facebook is a latecomer to the local deals industry. It is clear that the social networking giant is looking towards integration with its existing features and users to overcome the first-mover advantage of Groupon. An interesting implication of Facebook's Deals platform is its potential to fuel the use of Facebook Credits, the company's virtual currency.

Facebook Deals will allow users to pay for deals with credit cards as well as Facebook Credits. Payment is a major point of friction on the social Web. It is a problem that few companies, aside from Apple, have been able to solve. Clearly, Facebook Credits is an attempt to emulate Apple in reducing friction in social Web transactions.

Marketing Takeaway

Facebook's entry into the already crowded daily deal space solidifies the fact that the industry is here to stay. Businesses must plan accordingly to maximize benefits from local deal platforms. As a marketer or a business owner, you should consider these deals as a marketing expense since most will make little or no money from transactions.

Thinking of local deals as a marketing expense will move your mindset away from selling and into marketing. If you participate in a local deal, determine how to track what percent of purchasers are new to your business. Additionally, plan strategies such as email list opt-in at check to establish a way to market to new customers and get them to return to your business for a regular or a less-discounted purchase.

What do you think of Facebook's entry into the local deals arena?


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