With platforms like Groupon and Living Social rapidly gaining momentum, it’s not shocking to discover that Facebook has decided to dip their toes into coupons. After discontinuing a four-month test of its Prepaid Local Deals Subscription Service this past summer, Facebook is now testing out Coupon Posts and Ads on a select group of existing advertisers.
Similar to the strategy behind their Sponsored Stories, here’s how Facebook’s Coupons work:
- Business pages post a coupon to their fans (users who have “liked” the company’s page).
- Fans who receive the coupon can click “get coupon”. Their action then posts to the fans’ wall, allowing it to appear on their friends’ News Feeds, and thus multiplying the coupon’s visibility. This is how the word spreads from fans to non-fans.
- Any user who sees the coupon post can also “like” it, further extending its reach.
- Once a user clicks “get coupon,” Facebook sends them an email containing the coupon. And here…you guessed it; the recipient once more has the option to share the coupon with friends.
- According to Facebook, the advertisers who are currently participating in this test accept coupons both online and in stores.
- Unlike check-in deals, where users get special offers when “checking in” to a shop or restaurant via their mobile device, Facebook Coupons are not a “mobile only” ad option.
Reaction to this latest endeavor is creating some excitement among Facebook users, who are always looking for a deal— especially in these economically trying times. Most users who “like” a page do so to receive special offers and discounts anyway—at least I do! Let’s face it; I don’t really care if my friends know that I like Starbucks more than The Coffee Bean & Tea Leaf…I’m not trying to convert die-hard Coffee Bean fans to Starbucks. No…I could care less. However, I’d love it if Starbucks gave me a little reward for “liking” their page and helping them build their brand. It’s a modern, online version of “you scratch my back and I’ll scratch yours.” Or should that be the other way around?
The point is, Facebook’s new ad offering capitalizes on typical user behavior and gives advertisers yet another opportunity to target bargain-hungry, brand-loving users who just might share similar interests as their friends. It’s an assumption surely worth testing.
But despite the enthusiasm surrounding this latest development as well as the proliferation of daily deal services popping up all over the Internet (Groupon, Deal Chicken, etc.), social media experts stress the importance of taking the time to understand what you’re getting into—as well as your audience— before jumping on the Facebook Coupon bandwagon. Josh Peters, Social Media Manager at The Search Agency, lays out some useful guidelines:
- Not only are you offering a discount on your products, you’re paying for people to click on the coupon, so the coupon needs to be priced accordingly otherwise you will end up losing money on the whole deal.
- Spend some time listening to your community and reading your community Facebook posts and comments so that you know what kind of an offer would encourage your fans to click and share. You could even start with a poll to see what kind of an offer would be most enticing to your fan base.
- Don’t just start using the coupons because you see your competitors doing it. This type of advertising has a cost and lowers your profit margins on the coupon you’re offering, so do a real assessment of your products, costs, and what you can offer before putting together a campaign.
Facebook itself has been giving advertisers similar advice to help them optimize their pages and get the most bang for their buck. On their Facebook for Business page, they recommend checking your Page Insights Dashboard often to gauge:
- Who your customers are
- What day of the week most people visit
- How often people comment
- Which posts are most engaging
- How to improve your Page strategy
While Facebook’s previous attempt at a pre-paid local deals service didn’t pan out, industry experts are optimistic about their newest endeavor. “With over 70% of the U.S. web audience on Facebook and more than half of users logged in every day, Facebook is incentivized to maintain their compelling engagement while creating ad revenue opportunities that tie in with their user journeys – coupons and page post ads are probably just the beginning,” says Mike Jarvinen, VP of Marketing Strategy at The Search Agency.