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Facebook Ad and Gifts Exchange – Two Things Facebook Has Gotten Right

We welcome a new sponsor to Social Commerce Today – Payvment, the world’s leading social commerce platform on Facebook. Payvment’s goal is simple: to connect people, products, and conversations in new ways to reinvent online shopping.

Facebook has received an enormous amount of criticism from its faltering IPO to what one person referred to as its “old fashioned” advertising practices. Lately, however, with the launch of its ad exchange program called FBX and the new online gifts store – which I also refer to as an “exchange” – Facebook has gotten a couple of things right:

1. Facebook Exchange (FBX)

Facebook has entered the retargeting game through its new Facebook Exchange, which allows brands to take advantage of the social network’s massive ad inventory. According to comScore’s US Digital Future in Focus report, with more than 1.3 trillion impressions – 27.9 percent market share – Facebook was the “leading U.S. publisher of display ads in 2011.”

Until the recent launch of FBX, Facebook had never maximized the value of that inventory in a manner consistent with what advertisers have been doing for a number of years – retargeting, which, according to Wikipedia, is defined as online targeted advertising by which ads are delivered to consumers based on previous Internet actions that did not in the past result in a conversion.

Speaking to the powerful impact FBX can have on advertising, Brian Lesser, CEO of digital media company Xaxis said, “It is difficult to overstate the impact that Facebook Exchange will have on the entire digital media landscape. With the launch of FBX, Facebook not only instantly multiplies the overall size of the RTB market, it provides high-quality inventory that is brand safe and extremely targeted.”

If what Lesser said is true, it’s certainly a win for Facebook. In fact, the website MarketingLand reported that ad network partners are “crowing about” the positive results they have experienced. So, score one for Facebook!

2. Facebook Gift Store

In August 2010, Facebook closed its virtual gift store only to open a “real gift” store (as in physical products) late last month.

SCT Editor Paul Marsden says this is a smart move for Facebook because it offers “social utility,” which he defines as “helping people solve problems socially or solve social problems.” (Social utility is a topic we cover extensively in our new book, The Social Commerce Handbook: 20 Secrets for Turning Social Media into Social Sales, published by McGraw-Hill.)

Altimeter Group analyst Rebecca Lieb stated that both F-commerce and mobile commerce will get a “powerful surge” if this new venture is successful, according to The Markets Are Open blog.

I think the new gifting service makes common sense. Facebook reminds users of friend’s birthdays, so why not offer a way to provide a more tangible acknowledgement of that auspicious occasion than simply extending well-wishes in the friend’s timeline.

With its gift store, Facebook takes literal ownership of the term “f-commerce,” and may even take a bite out of Amazon’s pocketbook to boot. Regardless, both FBX and the gift store should help turn the negative tide of criticism and put the social network on a path to even greater profitability.


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Digital wellbeing covers the latest scientific research on the impact of digital technology on human wellbeing. Curated by psychologist Dr. Paul Marsden (@marsattacks). Sponsored by WPP agency SYZYGY.