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Facebook Gifts Could Steal Search Dollars From Google

  |  September 28, 2012   |  Comments

More than 100 partners including Vosges chocolate, Starbucks, Magnolia Bakery, and Happy Socks are signed on to sell items via Facebook's new Gifts service.

More than 100 partners including Vosges chocolate, Starbucks, Magnolia Bakery, and Happy Socks are signed on to sell candy, java, cupcakes, and stripey socks via Facebook's new Gifts service. Still unavailable to many users, the service promises to enrich Facebook's data coffers and open up new ad targeting possibilities. It could also put Facebook in more direct competition with Google.

The system will allow people to click a gift icon on their friends' Facebook timelines to buy tangible items for their birthdays or other occasions. Gift givers won't have to know their friends' addresses either: the system will notify recipients when they've been bought a present, and ask them where they want it to be sent. "Your friend won't see the price of the gift, but they can choose a different size, color or style. They can even swap it for another similarly priced gift before it ships," noted Facebook. The gifts will arrive wrapped in Facebook packaging with a personal message.

While buyers can pay using American Express, Discover, MasterCard or Visa, they can't use Facebook's virtual Credits currency - or the more commonly used PayPal. Facebook can store buyers' credit card information for use another time, or users can choose to remove it.

Facebook will work with more than 100 gift sellers including Starbucks, stuffed animal brand GUND, Happy Socks, cupcake purveyor Magnolia Bakery, upscale chocolatier Vosges Haut-Chocolat, Jessica Alba's eco-friendly product maker The Honest Company, skincare brand Malin + Goetz, custom candy maker Chocomize, and Cheryl's Cookies by 1-800 Flowers, which sells "cookie greetings," according to a Facebook spokesperson.

facebook-gifts"This is a watershed moment for Facebook...Facebook ads actually make sense for the first time," said Paul Marsden, digital and social media consultant and editor of Social Commerce Today. "Facebook is creating these buttons that essentially flip someone from social to search mode," he suggested.

Facebook's Sponsored Stories format has conditioned users to seeing ads with messages featuring their friends, so expect more of the same as the gifts service gains traction. For instance, Facebook might target ads to people when a friend's birthday is coming up: "It's Susan's birthday Sunday. Get her a Starbucks gift card to celebrate!"

When asked about this possibility, a Facebook spokesperson wrote in an email that, "Currently Facebook does not support custom targeting, but they are continuously rolling out additional features for partners."

There's also the possibility that Facebook will aim ads at people based on previous gifts purchases - or perhaps based on gift items their friends have "liked."

Marsden envisions a searchable Facebook Gifts store similar to Google's shopping search that could include ads in search results. He expects Facebook might allow advertisers to pay a premium to display ads only when someone has clicked the gift button leading them to Facebook Gifts, indicating they are in search and potentially buy mode.

"Targeting plus search is a marriage made in heaven," he said, noting that if advertisers are given "a clear benchmarking against Google ads" that shows how Facebook ads compare to Google ads, they could steer search budgets away from Google toward the social site.

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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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