In its second-largest acquisition, Amazon buys the company for $970 million.
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Retailers can use those Likes as de facto product reviews, as Giantnerd.com has done. The e-retailer added the Like button to its product pages last August, three months after the site's launch, and the page displays how many Facebook users have Liked the product. When a consumer clicks the button, that information is shared on Facebook.
After Giantnerd added the button, the number of consumers who placed an order jumped about 30% and the average order value rose roughly 50%. Weidberg doesn't attribute all those gains to the Like button—particularly because Giantnerd is barely a year old, and small increases can produce large percentage gains.
But because clicks on the Like button are broadcast to the clicker's Facebook friends, they did expose many new shoppers to Giantnerd along with an endorsement from someone they know. "I want, and our members want, recommendations from like-minded people and that's what the Like button gives them," he says. "Most people have friends who have similar interests, so when they see that their friend likes a particular product it has a real impact."
Another plug-in, Facebook's Comments Box, allows comments on an e-retail or other web site to appear both on the site and on the Facebook pages of the friends of the consumer who made the comment. A consumer has to be signed on to Facebook for their comments to be transmitted to Facebook. Since half of Facebook users visit the social network every day, and an individual remains signed on unless she unclicks a box that keeps her signed on, millions of consumers are signed on to Facebook as they move around the web.
Facebook introduced a revamped Comments Box feature in March, and children's clothing retailer Tea Collection quickly placed the Comments Box on its product pages. "It's great because when someone uses either the Like button or comments, they aren't only endorsing the product," says Leigh Rawdon, the retailer's CEO. "They're spreading news of the product so that all of their friends see it. And that helps introduce us to new people."
Moreover, Facebook designed the feature so that a Facebook member sees her Facebook friends' comments most prominently. That means that if a consumer named Colleen comments on a retailer's web site, when Colleen's friends visit that site Colleen's comment would appear higher than other shopper's comments.
Amazon friends Facebook
Marketers aren't limited to inserting Facebook's plug-ins into their site. For instance, Amazon.com Inc. last July began leveraging the information that consumers provide on Facebook into its own site to make shopping on Amazon even more personal.
When a consumer logs in to his Facebook account through Amazon.com, he agrees to send Amazon information about himself, his friends, and the products that he and his friends have noted that they Like on the social network. He is then presented with a Your Amazon Facebook page, which features the Facebook profile pictures of his friends who have upcoming birthdays, as well as a "See gift suggestions" link for each friend.
The link leads to a page offering gift suggestions based on each friend's favorite music on Facebook; if the friend has created an Amazon wish list, that appears too. The Amazon Facebook page also includes movie, book and music titles that are popular among the consumer's friends, as well as suggestions based on his Facebook profile.
The feature enhances the customer reviews and other social elements Amazon has built over the years, says an Amazon spokeswoman. "We are continually working on behalf of our customers to improve the personalized recommendations experience on Amazon," she says.
The Amazon Facebook page illustrates the potential power of Facebook marketing, says former Walmart.com executive Cathy Halligan, now senior vice president of sales and marketing at PowerReviews, a provider of ratings and review technology to e-retailers. "I don't need to remember birthdays and I don't have to know what someone wants because it's all there for me already on Amazon," she says.
The deeper integration with Facebook also appears to be driving more traffic to Amazon.com. In October 2010, 7.7% of Amazon's traffic came from Facebook, a 328% increase from a year earlier, according to comScore Inc., which measures web traffic. Google provided more of Amazon's traffic—19.6% in October 2010—but that was down 2% from October 2009, comScore says.
There will also be many opportunities to market to consumers on Facebook itself, especially as the social network introduces a wider variety of advertising options.
Facebook is already sucking up a lot of ad dollars. In 2010, U.S. display advertisers spent $1.21 billion on Facebook, up 116% from $560 million in 2009 and up 476% from $210 million in 2008, according to eMarketer Inc. That put Facebook in second place among U.S. web properties, behind only Yahoo Inc.'s sites, which generated $1.43 billion in display ad revenue last year.
Facebook is moving up rapidly as it adds new ways to advertise and enables advertisers to target their ads more precisely.
Retailers can buy featured ads, which enable a retailer to place an ad on the right side of a consumer's Facebook News Feed page, just under "Upcoming Events," in the one advertising spot on that page. Merchants can also buy less expensive, self-service "Marketplace" ads that appear on one of four slots on the right side of profile pages under "People You May Know."
Those Marketplace ads can be highly effective, says one consumer electronics accessories retailer who declined to be named. This retailer uses Facebook profile data to show ads to a very targeted audience—the employees of a big rival. At a cost of only about $25 a month, the retailer is using those Marketplace ads to convince its competitor that its advertising budget is far larger than it actually is. "It's like war propaganda," says the advertiser's CEO. "We could never do that on Google. But Facebook is rad. It enables you to do things very differently."