Ever since my college roommate spurred me to create a Facebook account to virtually stalk our floor mates, I have been an avid user. Unless I'm really busy or traveling, there is rarely a day when I don't check my newsfeed and feel connected to friends that are no longer down the hall.
That said, Facebook is failing to monetize a tremendous opportunity when it comes to gifts — and my hypothesis is that it's an opportunity that both end-users like myself and their clients would be open to accepting. Facebook is currently implementing something they call "Facebook Gifts" (not the most imaginative name, but I digress). In essence, if Facebook deems that someone in your inner circle is having a birthday, for example, you will see a prompt at the top of your newsfeed suggesting that you might want to consider getting your friend a gift. If you click on "Buy a Gift," you'll get a list of random products that you can potentially purchase for your friend. Or you can gift your friend credits that she or he can use on a gift of their choosing.
Of course, the downside is that this prompt to buy a gift shows up on the day of your friend's birthday which means if you are hoping the gift gets to your friend in time, that's not going to happen. And the other downside is that not all the gifts are incredibly appropriate. For example, Facebook suggested that I give my mom a gift on Mother's Day. Pretty sure my mom would not be interested in any of those gifts delivered many days after Mother's Day!
While this is probably the simplest approach, the truth is that it isn't working. AdAge is reporting that Gifts hasn't gotten the kind of response that Facebook and its partners had hoped. Facebook Gifts will only be successful if it becomes relevant. The only way it can become relevant is if it becomes more targeted and more persistent.
By targeted, I mean that Facebook Gifts needs to target the right person with the right gift ideas. Here's a very rudimentary example. Facebook knows that I'm in a relationship and who I'm in a relationship with as well as our anniversary date. Facebook also has data on what my partner likes and his basic demographic information. With this data, Facebook should be able to match me (the gift giver) with a list of advertisers with products/services that want to reach his demographic (to over simplify, they are the gift seller). This helps me figure out what to get my partner and helps the seller because the likelihood of conversion is a lot higher since you are targeting someone who is predisposed to buy. It's the same reason why candy and magazines are in the aisle at the supermarket check-out line — you are already intending to buy, so why not buy a little more? In this case, you know I'm probably going to buy him a gift, so why not give me a strong hint on what he might like?
And by persistent, I mean these gift suggestions should not suddenly appear on my newsfeed the day of an occasion or birthday. These should appear at given intervals. I imagine that one month before our anniversary, for example, Facebook could remind me that our anniversary is coming up and suggest some gifts. And then it would remind me when it is two weeks away, and then reminders daily leading up to the day of the occasion. These reminders are not just reminders, they are actually targeted advertisements. But instead of targeting your sought after demographic, you are actually targeting the folks most likely to initiate the purchase of these products for your sought after demographic. This makes the gifts helpful to users because they'll be able to get better gifts for friends and family. In addition, this makes gifts tremendously valuable to advertisers because, if the conversions hold true, you are now getting your product/service into the hands of your target demographic who, being more actively engaged Facebook users, will likely spread the word about the product/service (for better or for worse).
Combined with the Social Graph Search, Targeted Gift Ads (as I would call them) could be super powerful in generating real sales. For example, I typically get ads from engagement ring sellers such as Brilliant Earth and Blue Nile. However, I am not the person who would purchase the engagement ring — that would be my significant other. Running these ads for my significant other would likely be way more effective than showing them to me, or any other unmarried woman in a relationship for that matter. While I might click through to look at pretty rings, I'm not going to be the purchaser there so all I'm doing is looking and the advertiser will hope that I tell my friends and my significant other, of course. Sounds like it's time to stop hoping for results and start actually getting some by leveraging the power of all the data we've already given to Facebook.