Facebook Deals: Bringing more small businesses into online marketing?

Users checking in to locations online with mobile phonesFacebook launched their ‘Deals’ feature in the UK yesterday – a feature which looks set to change the way local businesses use the internet. Facebook Deals will allow users who access Facebook via their mobile phones to check in to their location and view local businesses near to them. Local businesses can then offer deals and discounts through this listing to encourage the user to visit their location.

For example, if I’m in the centre of Leicester, I can view the shops and businesses near to me and see what offers they have. If I see, for example, that a florist is offering a 20% discount if I visit them before 4pm that day, I can click on the offer to bring up the online voucher, show it on my phone to the florist and receive my discount. Because I have checked in, the business not only gains me as a customer, but is also advertised to all my friends via my Facebook newsfeed.

The offers don’t need to be a simple discount, however. Businesses can also reward loyalty by offering a discount after so many visits have been registered on Facebook, or they can require a user to bring a certain number of friends with them to receive a reward. Additionally, incentives can be product give-aways – in the U.S., Gap gave away a pair of jeans to the first 10,000 customers to check in at a Gap store. Or even charity donations – for example, McDonald’s donated $1 per customer to the Ronald McDonald House Charities.

How will this affect local business advertising?

For many small businesses it has sometimes been difficult to see the benefits of having an online presence. Yet features like the new Facebook Deals, and sites like Foursquare, Living Social and Groupon, are changing that. For small businesses like shops and cafés, a presence on Foursquare or Groupon can encourage new customers by increasing your visibility to potential customers. Discounts and deals are changing the way online marketing operates, and increasingly localised results are levelling the playing field for smaller businesses.

Advertising on these sites can be highly cost-effective too. If you create an offer on Groupon, for instance, then that offer is only activated if a minimum number of people sign up to it. Similarly, a presence on Foursquare targets people actively in your area, and also advertises your business to their friends. Living Social, on the other hand, takes a slightly different approach by encouraging users to share the deal with their friends. If three of their friends then buy the deal, the original user gets it free – thus encouraging a stronger and more effective personal recommendation.

Although Facebook Deals is similar to sites like Foursquare, Facebook is a lot bigger than Foursquare and, if it can capitalize on its already huge user base, Facebook Deals could become an essential tool even for businesses that don’t have a conventional web presence. Until Facebook Deals becomes more widely available, however, Groupon, Foursquare and Living Social are still the best discount social marketing tools available.

What remains to be seen is how users will take to Facebook Deals, and how Google’s planned Offers feature will compete. Watch this space for more analysis as the battle for discounts and deals in social marketing continues.

Posted by Jon Potter


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