Facebook’s Partnership With eBay Will Bring It Ad-Targetable Data on What Users “Want” and “Own”
Today at the PayPal Innovate conference in San Francisco, eBay and Facebook announced a partnership to integrate the Open Graph protocol into eBay’s ecommerce platforms X.commerce, Magento and GSI. Merchants will be able to easily add Facebook sharing option to their sites, including new “want” and “own” buttons that will give customers more flexibility to express their connection with products than the Like button.
By establishing a partnership with some of the world’s largest ecommerce platforms, Facebook will be able to increase the size of its footprint on the web. The Open Graph integrations will also provide Facebook with extremely valuable data about the purchasing intent and history of its users that advertisers may be willing to pay high rates to target.
By gathering explicit data on what users want to buy or already own, Facebook could steal ad dollars from search engines where ecommerce stores currently advertise to reach users while they’re making a decision on what or where to buy.
Previously, Facebook had left third-party developers such as Beetailer and Zibaba to allow ecommerce platform users to integrate Facebook features such as social plugins or import their products into Page tab app storefronts. Now Facebook is building its functionality directly into X.commerce, Magento, and GSI so users of these platforms will be able to add social features themselves.
At f8 last month it was announced that developers would be able to create their own Open Graph canvas apps and website integrations to share structured data to Facebook. Rather than having users Like something, a website could report that a user “listened” to a song or “Read” and article. Some third-party developers such as Payvment are already building their own ecommerce buttons, as shown here.
Through the partnership with Facebook, eBay ecommerce platform merchants and developers will be able to add “Want” or “Own” buttons to products without going through seperate software vendor.
Users will be able to click these buttons to share with friends that they want to buy something in the future, or already own a product and would recommend it to friends. These news feed stories will drive traffic back to to ecommerce stores, helping them boost sales. Store owners will also be able to power wish lists, registries, group buying, and other features with the data from these buttons. These opportunities make eBay’s ecommerce more attractive to merchants.
Facebook stands to make a lot of money off of the partnerships as well. It will soon allow advertisers to target users based on their Open Graph activity. For example, an athletic clothing retailer could target ads to users that said they owned any product on a specific sporting goods site, or a jewelry store could target ads to anyone who said they wanted a certain brand of necklace on any website.
Right now, advertisers can only target users based on the Pages they Like. The “Like” relationship is ambiguous, though. Advertisers can’t tell if users are already customers and have the money to buy a certain class of product, or if they merely dream of one day being able to afford the brand Page’s products.
With explicit knowledge about how a user is connected to a product, advertisers can get clicks from users who are more likely to actually make a purchase. This means they’ll be willing to pay a higher cost per click. Imagine how much more a luxury car company would pay to advertise to a user who says they own a BMW M3 convertible than one who says they simply Like BMW. Advertisers may even pay more to reach one of these Facebook users than they’d pay Google to appear next to a search for “BMW M3″.
By working the Open Graph protocol into X.commerce, Magento, and GSI, all the users of these ecommerce platforms could soon be feeding Facebook this valuable data in exchange for referral traffic. While Facebook pitched the Open Graph as a way to get users sharing more about themselves, its now becoming clear how this sharing is key to Facebook’s monetization plans.