Software // Social
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7/24/2014
12:11 AM
David Rekuc
David Rekuc
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Why Facebook’s 'Buy' Button Will Fail

Even if Facebook is able to overcome its trust problem, it still faces an even more serious threat: timing.

Facebook Privacy: 10 Settings To Check
Facebook Privacy: 10 Settings To Check
(Click image for larger view and slideshow.)

Last week, Facebook announced that it's testing a new advertising unit in its Marketplace that will feature a Buy button in the ad. The button lets users purchase a product directly from a business without leaving the social network.

It's no secret that Facebook is a digital advertising behemoth. eMarketer predicts that Facebook will serve more than 21% of all mobile ads this year -- that's 1 in 5 ads served on a mobile device -- earning it the No. 2 spot in all digital ad sales, second only to Google.

That being said, Facebook's "buy now" ads simply won't work. Here's why.

Consumers have very little trust in the social network's privacy standards. Most recently, a report revealed that Facebook experimented on users' moods by manipulating their news feeds. Savvy Facebook users will almost certainly suspect that Buy-button transactions will be used to target them with even more ads. The social network hasn't commented on this yet, but it's by no means an unfounded theory. But even if Facebook is able to overcome its trust problem, it still faces an even more serious threat: timing.

[Facebook and Twitter test the waters. Read Facebook, Twitter Push E-Commerce, Like It Or Not.]

For most e-commerce sites, a great ad is made up of three key components:

1.    The product(s) sold in the ad appeals to its target audience.

2.    The audience has the means to buy the item.

3.    The ad is shown at a time when the audience is ready to buy.

Advertising on Facebook Marketplace falls short here because businesses cannot target users based on a signal of their intent to buy. In recent years, advertising has improved with Facebook Ad Exchange (FBX), where businesses can target users who already visited their site but did not complete a purchase. Unfortunately, there is no indication that the "buy now" button will be offered through FBX.

On the other hand, Google's ads are inherently more valuable to e-commerce sites because searching for a product indicates that a consumer is ready or almost ready to purchase an item. Google ads fulfill all three of the criteria above -- and they don't require a third-party ad unit to support the transaction.

Unless Facebook plans to integrate the new button into its Ad Exchange, the Buy-button feature will not reach potential customers when they are ready to shop. This means that the Buy button will only ever be useful for impulse products, which only make up a small fraction of the e-commerce industry. Without retargeting capabilities, the efficacy of the Buy button will always lag behind e-commerce ads on Google and FBX. 

For what it's worth, Twitter's plan to incorporate e-commerce advertising also fails to target consumers when they are ready to buy. However, Twitter ads are new and exciting -- they don't suffer the same negative perception as ads on Facebook. Consumers may be more willing to give them a shot, and retailers may be more willing to wait for a reasonable ROI.

Businesses, what do you think of Facebook's new Buy button? Weigh in below.

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David Rekuc (@DaveRekuc) is the marketing director at Ripen eCommerce, a full-service agency that specializes in building custom solutions for online retailers. For more information, visit www.ripenecommerce.com. View Full Bio
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6 one way half a dozen another,
User Rank: Strategist
7/24/2014 | 2:34:06 PM
In One Word: Trust
First and foremost, will people be able to really trust Facebook with their credit card numbers? Partly due to Facebook's reputation for "oops, my bad" style privacy breaches as well as the recent high profile data thefts at a number of retailers, I think users may have a hard time turning over secure information for potential exposure and abuse.

Secondly, will users purchases be automatically shared as posts to their feeds? Or, at the least, have their retail experience shared as an "endorsement" for an advertiser? Or will this be opt-in only behavior?

Lastly (and maybe most importantly), will the marchandise be worth buying at all? Facebook has a reputation for just as many low quality advertisers as it now has higher quality ones. And, if you don't much of a profile or activity, they throw pretty much anything, adwise, at you, regardless of how irrelevant it may be.

I see a small minority finding it useful but an intrusion at worst, an annoyance at best for the majority.
stotheco
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stotheco,
User Rank: Ninja
7/25/2014 | 1:54:57 AM
Re: In One Word: Trust
Sure, hundreds of millions of people use Facebook to socialize and share photos. However, what percentage of users would say that they trust Facebook? It would be far fewer than they would hope, that's for sure. And before you can convince consumers to hit that Buy button, you've got to be able to get their trust.
Kristin Burnham
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Kristin Burnham,
User Rank: Author
7/25/2014 | 9:52:55 AM
Re: In One Word: Trust
Trust will certianly be the biggest obstacle. I'm not sure if the convenience of shopping without leaving the site is enough to encourage users to input their credit card numbers. 
nomii
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nomii,
User Rank: Ninja
7/26/2014 | 3:24:20 AM
Re: In One Word: Trust
The news of sharing the profileinformation did not go down well with the consumers and the trust level is at it low in almost every community. People are now really not willing to use their actual information for the fear of its being stolen. In time launching a buy button is the recepie to loose. I think they should invest in getting the trust back rather then making it more down.
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