Facebook Leads New Social Mobile Commerce Charge

The transformation that Facebook has triggered this year in social networking dynamics will pale in comparison to the e-commerce revolution it will inspire in 2011.

Recommendations from Facebook's 600 million-plus members combined with GroupOn-styled discounts, Google-inspired targeted advertising and Apple's rampant connectivity will yield Amazon-sized buying across all mobile devices. While cross-platform pollination is underway, these players are creating a global template for integrated social, hyper-local, mobile commerce.

Increased integration will collectively change the way consumers research and buy products and services, and how companies market and sell them.

It won't be long before these and other companies' personalized, real-time mobile buying services generate more revenues than the billions online alone has mustered. Their success is driven by two factors: consumer relevance and location.

While the recession knocked the wind out of consumers' sails, mobile interactive technology primed them for a new orientation--especially in communications and commerce. During the painfully slow recovery, there are mounting telltale signs of this imminent wave of creative disruption. Here are a few:



*In 2011, four out of five U.S. businesses with more than 100 employees will use social media marketing -- double the number from 2008. Even without the concrete means to measure ROI, marketers are embracing social media online and in mobile instead of or in addition to traditional television and print.

"Social media is no longer an add-on for marketers; it's been integrated into everything they do," observes eMarketer analyst Debra Aho Williamson. Blue -chip marketers are allocating increased budgets to social media based on "gut instinct" or the desire to be cutting edge. Social media has grown from 5.9% of their marketing budgets in August 2010 to 9.9% of their marketing budgets.

*Madison Avenue is being spurred by Facebook's mad dash to monetize its exploding worldwide base, spotlighted in Time's Person of the Year tribute to founding CEO Mark Zuckerberg. Facebook's estimated $56 billion private market value can more than triple by 2015 on its planned move into transactional target marketing, experts say.

*Consumer eagerness to act on the recommendations and actions of their Facebook friends is evident in the estimated $5.4 billion value of Facebook-connected game player Zynga and the robust sales of virtual goods 54 million member-linked FarmVille. Like Facebook, they are all going global.

*Any doubt about the intertwined future of hyper-local couponing, social networks and commerce was swiftly dispelled by Amazon's recent $175 million investment in LivingSocial, a GroupOn wannabe reportedly booking more than $1 million daily revenue and on track to reach 500 million subscribers by 2011. Google's rejected $6 billion bid for GroupOn says loads about the exploding importance of mobile location.

*Amazon knows a good thing when it sees it. The e-reader phenomenon it launched with the Kindle a few years ago has created a vibrant category that is outpacing smart, big screen TVs this holiday season. Although Best Buy's online sales growth has collapsed, Amazon continues to post double-digit revenue gains based on the strength of its engaged social, recommendation, free shipping and superb customer service.

*Even Google is beating Best Buy to the punch this month. Google's YouTube video platform is leveraging its online community to give away 100 television sets fortified with the new Google TV operating system that makes viewing truly interactive.

*Shoppers using their smartphones and other mobile devices as shopping aids want apps that provide discount coupons, personalized notifications of in-store specials and price comparisons outside and inside stores, according to a new Accenture survey. Less privacy-crazed consumers are increasingly comfortable using a shortcut to the checkout, such as PayPal or Google Checkout. Overall, transaction volume is up about 35% from a year ago, spurred by free shipping and consumer's increased comfort with shopping online.

*A new Pew Research report indicates that rating and buying products and services are among the key Internet activities popular across all age groups. More than 60% of all online adults regularly use social networks. Social media has moved ahead of search as a marketing tactic, according to Chief Marketer.

*The global Internet advertising pot was $54 billion last year--a number that will multiple once marketers learn to more aggressively tap Facebook's undermonetized user base, not only with interactive advertising, but results-oriented transactions, says Internet guru Mary Meeker. Some ad gurus forecast addressable advertising could push TV ad spending to $100 billion annually from about $60 billion now, based on higher ad rates, better ROI measurement, potential share grab from other media and enhanced targeting ability. But not if mobile social commerce gets there first.

*Half of all mobile users have social profiles; that number is expected to rise to 79% by 2015. One-third of all users are aware of the difference in location-based mobile social services--triple from what it was just a year ago. Such trends explain the meteoric adoption of social commerce-related services, from GroupOn to Facebook's nascent advertising.

*Apps will become the universal means for connecting interested parties, just based on nearly 1 million apps on the Apple and Facebook platforms. Consumers under 35 are increasingly ditching their browsers for mobile apps because they afford convenience and instant access, according to Parks Associates. Comparative pricing apps like RedLaser on iPhone and The Find on Google's Android have been all the rage among brick-and-mortar holiday shoppers.

1 comment about "Facebook Leads New Social Mobile Commerce Charge ".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, December 21, 2010 at 4:44 p.m.

    I bet this falls flat just like every other initiative they have had since Facebook Ads (which are the only winner they have had so far). I am sorry but people want to talk with friends and family on Facebook. Network usage per user per day is down 22% since April. Number of photos posted per month per user down from 7.5 to 5.5. But that is assuming 540mil accounts vs 600mil so the numbers are even worse. We all have Facebook fatigue and due to the hundreds of millions in VC funding they have taken they are FREAKING OUT on how to repay the investors. VC's seek 30% returns not just their money back.

    I don't see this happening. Deals and Places has been a yawn so far. How are we going to share this info. We see less than 8% of our live feed. And they keep packing it with more stuff.

    Also on the marketing side 80% of Facebook profiles are 100% private. Meaning their chatter and sharing is seen by no one but Facebook. On top of that we only have 5mil active daily US twitter users which is a very small pool. 8mil if you include folks who check in once per day but once per day on twitter means good luck connecting with someone.

    Now that I am done beating up facebook! LOL the rest of your post is great lots of insight that I can see developing. But watchout lots of new technologies coming out I see disruptions and chaos in social! =)

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