Keeping with the analogy introduced by Matt Hartley of the National Post last week; Goliath has crossed the 49th parallel.
On Monday, it was announced that Facebook Deals was launching in Canada (and to other countries in the Commonwealth). Those who are following the local mobile deals space closely will know that this was an expected development because back in November 2010, Facebook launched its Deals offering in the US.
We’ve gotten a few calls and emails from friends, reporters, clients and tire kickers (investors) asking to comment on, or share our response to the behemoth moving into the mobile offers niche. We thought we’d put together a post, share some of our thoughts and observations with the community and see if others care to weigh in on the discussion.
A few observations on the FB Deals launch from the Clip team:
- FB launched Deals yesterday with a reasonable amount of hype generated by a press conference at their Toronto Office.
- FB did a decent job of getting few lighthouse clients on board for Deals launch. Frustratingly, Clip has been chasing a number of these clients for months expounding the virtues of mobile offers. It would appear that when you are Facebook, marketers are more apt to return your call.
- Even though Facebook has 500 million users and all the resources in the world, it doesn’t look as though users are flocking to Deals yet. When navigating your way around the iPhone app, a user can view exactly how many check-ins have been associated to a specific location with an offer. We looked at all the launch partners downtown locations and found some very underwhelming stats. Here are the downtown Toronto Check-ins as of 10:42 AM on Feb 2, 2011 :
|FB Deals Partner||Feb 2nd 2011 Total Check-In’s|
AMC Yonge & Dundas
Chapters (Scotia Theatre)
|Indigo (Eaton Centre)||
11 (of which I counted for 2!)
|H&M (Eaton Centre)||
|Aerie (Eaton Centre)||
|Joe Fresh (St. Lawrence)||
|Town Shoes (Eaton Centre)||
|Garage (Eaton Centre)||
|Wind Mobile (Yonge & Dundas)||
- Having launch partners such as Wind Mobile & Telus shows a lack of understanding about location-based marketing. How can I check-in to save on a wireless plan if I don’t yet own a Smartphone?!?! This is bandwagoning and its surprising that the folks at FB allowed it to happen because it will not generate a positive first experience for users or clients.
- In our opinion, the UI on FB Deals leaves a lot to be desired and there are few bugs to be worked out yet.
- Not being able to browse and map deals is limiting because even if I am in the area of a Deal, it often doesn’t come up on the Places search. With current functionality Deals has a limited opportunity to impact consumer behavior.
- A testament to the challenges of cross-platform development and particularly developing on Blackberry, FB Deals is currently only available for iPhone and Android . All the development resources in the world doesn’t make Blackberry any easier to develop on.
- Only 1.5 of original launch partners for FB Deals in the US stayed on for the Canadian launch. Could this be because US launch of FB Deals was a bit lackluster in terms of response and ROI? We have also heard from an inside source that initial US partners were required to pay FB $1 million each to have the privilege to market with the FB. Haven’t seen the ROI Analysis for The GAP’s 10,000 Pairs of Jeans giveaway, but it is plausible that they found that $1,000,000+10,000X whatever a pair of jeans costs the gap, is just not good Dealonomics. This is purely speculation but what is a fact is that only H&M and Aerie (subsidiary of American Eagle) were the only repeat customers involved in the Canadian launch of FB Deals.
- A key component of FB Deals is the deep integration of sharing check-in information with your social graph. When you check-in to a location you automatically share that info with your friends on the network. With the check-in model currently being used by FB, our newsfeeds could very quickly begin to look like scrolling billboards especially if the integration with “Sponsored Stories” proceeds as planned. Read on and you will see how this is almost surely going to lead to more privacy concerns for Facebook users wishing to take control of what, how and when they share.
- We were surprised to see that today, only one friend in our entire network checked in for a deal on Facebook. Now, it is plausible that most of our friends gave FB Deals a pass because they are die-hard Clip supporters but perhaps this is evidence of 500 million Facebook users who want to use their FB app to be social, not get deals. We are dying to know what book Erin Bury bought at Chapters with her 40% discount? Sorry Erin, is that creepy? At least you were checking in to a place that will prove to all of your friends on Facebook what a smart cookie you are and that reading is cool. We wonder how many people would check-in at place that wasn’t quite so….wholesome.
The act of finding a deal is inherently social. Take for example, forwarding an offer to a friend to let them in on the deal. Just look at the viral capacity of Groupon and Redflagdeals to grow their communities as proof of this. However, sharing the act of “getting a deal” to your social graph…perhaps not so much. Clip is focused on allowing consumers to share what they want, while at the same time respecting that not everyone needs to know everything about our buying habits. This is a fine line FB is walking and we will surely see more discussion on it.
We take these observations as proof that none of the big players have demonstrated that they have yet “cracked the code” when it comes to delivering offers via your mobile device. What we do know is that local mobile advertising hit $285 million in 2009 and is expected to double this year to $586 million, then spike upward to $4.7 billion by 2014. No one player is going to dominate this space and competition is going to be fierce.
Being nimble is one of Clip’s biggest competitive advantages. Our response has been open up our technology platform to power an anti-Google/Facebook alliance that allows existing local marketers to have a stake in this massive opportunity. If local publishers, directories or marketing organizations do not have a strong mobile offering, they are going to get their lunch eaten by the likes of Google & Facebook. By making our local offers platform available to partners and allowing them to more effectively monetize their mobile and online assets beyond display advertising, we all stand a much better chance of competing against the Goliath’s.
For more information about our platform strategy, please contact firstname.lastname@example.org or you can learn a bit more by checking out some materials here. Please feel free to comment on our observations and provide your own thoughts on the recent FB Deals launch as well as the local mobile marketing industry.
- The Clip Mobile Team