Why Facebooks mobile announcements are a game-changer
November 5, 2010
Facebook Places provides company with location-based user data
Facebook's announcement of its mobile deal platform is a game-changer because it will likely encourage the adoption of check-in activities, providing opportunities for mobile marketers.
The new Android 1.4 update includes the launch of Places and Groups. With the launch of Places, people can now check-in to their favorite restaurant, museum, business or any other location from an Android phone.
Since it launched two months ago, consumers have tested Facebook Places' functionality, but there's been little benefit to consumers for participating, said Augie Ray, social media analyst at Forrester Research, Cambridge, MA.
Facebook is now poised to spark a wave of location-based behavior that will extend beyond the relatively small set of early adopters who currently use services such as Foursquare and Gowalla, he said.
Last month, Facebook reached a major milestone: 200 million people around the world are now actively using Facebook from a phone, more than triple the number just one year ago.
As part of Wednesdays announcements, Facebook made major updates to both its Android and iPhone applications.
The company also announced a single sign-on, meant to be a hassle-free way to log-in to mobile applications.
"Facebook's ability to become a de facto single signon for all mobile apps will depend a great deal on how developers adopt this functionality, but also will hinge on the level of trust that consumers have in Facebook, Mr. Ray said.
Given consumers' concern over privacy, Facebook will have to work to earn more trust and to educate consumers before a large number will feel comfortable using Facebook to log into other mobile applications, he said.
Now when consumers are logged into Facebook, it is easier to log-in into other applications on the mobile phone with single sign on.
That means users do not have to type in their username and password again on a tiny phone keyboard.
Here is how single sign on works.
For so many people, their mobile phone is already the most social device in their lives, said Erick Tseng head of mobile products at Facebook, Palo Alto, CA. It's our hope that single sign on and new updates for Android and iPhone will make the phone even more personal to you, so you can bring your friends with you wherever you may go.
The most immediate impact of Wednesday's announcement will be an increase in interest in Facebook Places on the part of both businesses and consumers.
The deal is very powerful because the platform has 500 million people on it.
Facebook will let businesses create unique and customized offers for free, and finally give consumers the ability to see offers that are immediately available nearby.
As consumers check in using their Facebook application, they can view a selection of nearby offers and immediately act upon them.
This is a win-win-win, Mr. Ray said. Consumers will be encouraged to check in more often because of the deals available.
Businesses can drive more traffic and reach consumers with offers that cost nothing and Facebook wins by increasing engagement on the platform, he said.
Although Facebook will not charge businesses for the ads, there is tremendous revenue potential as this program grows, per Mr. Ray.
Eventually businesses won't want to be just one of many ads that consumers see but will demand ways to differentiate and surface ads, which is how Facebook can eventually turn consumer check-ins and local ads into a new revenue stream, Mr. Ray said.
Within a year or two, businesses will be bidding to have their deals gain more attention on the Facebook mobile platform, just as they do today in Google AdWords, he said.
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