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Facebook Moves to Monetize Places

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  • Social Media

Facebook continues to drive innovative uses for its platform and community and more importantly, raise barriers to entry by launching new Applications and Services that diversify there all-encompassing social media brand!

To that end, they’ve just announced a Deal Services yesterday for Places, giving advertisers access to and reach into Facebook’s 500 million strong community.

Zuckerberg and crew may not have watched The Social Network, but they’ve clearly been reading My Space’s press clippings - their mantra continues to be develop and innovate, or risk dying on the vine a la My Space, Digg, Bebo and others.

Facebooks Open Graph & Rise of the Social Consumer

Facebook’s Open Graph is rapidly becoming an indispensable utility - its built in API and powerful reach into hundreds of millions of lives each day is rapidly reshaping how consumers interact, shop and refer each other to things of interest.

Thought leader and visionary, Brian Solis did a great blog post today: “The Dawn of the Social Consumer” which underscores how the Open Graph is pushing into everyday life and forcing brands to embrace social media marketing to leverage today’s social consumer and a changing commerce environment.

Facebook Leverages Places

Facebook’s announcement is clearly a signal to businesses that they can now utilize Facebook to advertise locally - I’d expect to see businesses big and small jump on the bandwagon in large volumes. As  Dal Services enables businesses to push out deals to new and existing customers, with no revenue share initially of any kind.

Facebook’s move is clearly a shot across the bow of coupon, review sites and check in providers like Groupon, Yelp and Gowalla, especially since Facebook is  not asking for advertiser fees.  It looks like a classic freemium model that Facebook will be able to easily monetize after the number of advertisers scales to high volumes.

And, clearly localized commerce is going to be driven via mobile providers and this helps to move Facebook into this market more aggressively. Although the holy grail in this market may be a smart phone that recognizes where the user is and presents the “social consumer” with a menu of deals from multiple providers (Facebook, Groupon, Gowalla, Yelp); but, that’s another blog.

How Deal Services Works

When the “social consumer” opens Facebook Places they will see a list of nearby businesses, some of which will have specialized icons - they can select and with two clicks, can claim it. Then, they go to the business to redeem the deal.

Facebook is rolling out Local Deals here in the US initially, with major brands like REI, Gap and Northface. They will open the floodgates to an initial 20K businesses and then make Deals available to any/all businesses in a few months. There are four kinds of offers for merchants: Individual Deals, Loyalty, Friend Deals (rewarding consumers who pay it forward) and Charity Deals.

This announcement puts Facebook into a more competitive posture with Google, which is clearly positioning itself to take a huge bite out of localized advertising. The end result might be a Foursquare acquisition by Google.

Author: admin

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