As you all may have heard Facebook has launched its version of the group/local deal platform.Â Facebook is trying to compete directly with companies like Groupon and Livingsocial.Â Now Facebook users in San Francisco, San Diego, Atlanta, Dallas and Austin can take part in Facebook deals.Â Users can use their credit card to purchase the deal or use it to purchase credits to purchase the deal.Â Facebook will be creating a page for each new daily deal, and in some cases the deal will be advertised on a userâ€™s wall.
Though everyone at TemplateZone is a Facebook advocate, so much that we created our own Facebook Page Designer (www.highimpactdesigner.com), we are a little skeptical about the success of this venture.
Too Little Too Late
Facebook announced their group buying deal campaign on Monday April 25th 2011 to be released in 5 US cities.Â Groupon was originally launched in 2008, and though it is losing some market share from competitors like Buywithme and LivingSocial, Groupon is still a leader in the group buying market.Â Simply put, Facebook started their daily deal program too late, and now with more group buying companies coming out of the woodwork it is becoming increasingly difficult to stay relevant in the group buying sphere.
More and more companies are taking issue with group buying deals.Â Group deals (in general) require a 50% discount on the product or service, then the agency takes their cut and the business gets the rest.Â Groupon claims that people who use their voucher will ultimately return for another full priced sale or even buy more products when they are using the Groupon.Â This is mere speculation on Groupons behalf, the reality of the situation is that when you market to deal hunters they are going to use the deal and try not to exceed the parameters of their voucher.
It is going to become difficult in the next few years to continually bring in companies who are willing to sell a product or give a service for Â¼ of its worth.Â Since Facebook is coming into the game as there is more discontent with the group buying model, it will be even more difficult for them to gain traction.
Out of Context
Facebook is still not a â€˜place of businessâ€™ it is a casual atmosphere where people look at pictures, talk with friends, or simply unwind.Â A Facebook user is nowhere in the same marketing funnel as a person who opens a Groupon or LivingSocial email.Â The casual tone of Facebook will ultimately undermine the success of Facebook Deals.
Remember Facebook Places? Â This was Facebookâ€™s attempt to compete with Foursquare, needless to say it couldn’t hold a candle to the traction Foursquare already had generated. Â Now that Facebook has set its eyes on group buying do you think these results will be any different?