Facebook opens up Offers service to online retailers

Redeemable promotions sent to user's news feed

Facebook is reportedly testing a version of its Offers service that will enable users to redeem coupons at online retailers, as the social network focuses on its usefulness to advertisers ahead of its IPO. A TechCrunch report claims that the new feature will enable businesses to send promotions straight to a user’s news feed and let them redeem those promotions online using a code or link. Facebook already offers a similar service for offline retailers, with its decision to expand into online e-commerce companies suggesting that the service is proving popular among retailers keen to tap into Facebook’s ever-growing audience.

As with the offline Offers service, Facebook will not charge businesses that want to include deals in their Page updates. Instead, the social network is hoping that businesses will experience uplift in sales by using Offers, leading them to pay more in advertising to boost Page fan counts and therefore the possible audience base for coupons. The service is currently in testing and only available to a select number of clients. If it is successful, Facebook is likely to expand the service to enable any company to launch an Offer via a self-serve platform like the one currently used for brick-and-mortar offers and which it rolled out earlier this month.

Facebook is keen to make a push into e-commerce as it seeks to widen its revenue streams. An online Offers service makes sense for the social network, particularly as most online retailers already enable consumers to enter promotional codes at checkout, meaning they won’t have to train shop assistants on how to accept the coupons as they do for the brick-and-mortar service. It remains unclear what form the online offers will take, but TechCrunch suggests that Facebook could offer businesses the choice of using an unlimited discount code designed to enable sharing, or a single-use code if companies want to limit the offer only to their fans in a bid to drive up ‘Likes’ on their Pages.

The move to focus on Offers sees Facebook move into more direct competition with the likes of Groupon and Foursquare, both of which offer deals but base their offerings on a different business model. Groupon’s service is based on group buying, a market that Facebook pulled out of when it cut its ‘Deals’ feature last year, while Foursquare ties rewards with its location-based check-in service. Foursquare is also reportedly considering plans to start distributing personalised offers to users via a redesigned app, charging businesses for placement as it seeks to boost its revenue and prove its long-term business model.

Instead of serving up places we think you might be interested in, we can do the same things for businesses, and [tell them] these are the folks that are most likely to come here, based upon their check-in habits, based upon the places they’ve been to and their friends have been,” says CEO Dennis Crowley, speaking to the Wall Street Journal.

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