Facebook introduces universal gift card that friends can reload for different retailers

featured imageFacebook today announced the Facebook Card, a resusable gift card that can be loaded with balances for different retailers when a user’s friends buy them gifts through Facebook.

The social network has added a number of new partners to its Gifts platform, including Target, Jamba Juice, Olive Garden and Sephora, who will offer gift cards to be purchased on Facebook. But instead of sending individual gift cards for each restaurant or retailer, or sending multiple gift cards for the same business, Facebook will send users one card that can maintain balances for several outlets.

For example, someone might receive a $50 gift card to Target. They’ll receive a Facebook Card in the mail. When another friend gifts them $10 to Jamba Juice, that amount will be automatically added to the same Facebook Card. Users will be able to view their different balances on Facebook.com and within the mobile app. Facebook says this option will roll out to U.S. users beginning today. Because Gifts are not available internationally, Facebook Card is also limited to the U.S. for now.

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Facebook says 500,000 pages use Promoted Posts, 42M users claim Offers

smb marketingFacebook shared new statistics about some of its latest products for business pages today on its fourth quarter earnings call, including that nearly 500,000 pages have used Promoted Posts and 42 million users have claimed an Offer.

COO Sheryl Sandberg said revenue from local businesses was strong in Q4 2012, with the number of local businesses paying for advertising on Facebook doubling since the beginning of 2012. Sandberg says this is in large part because of Promoted Posts, which make it easy for businesses to buy ads directly from their pages instead of the more complicated ad dashboard. This product rolled out in June, and by December 300,000 pages had promoted 2.5 million posts. Now Facebook says nearly 500,000 pages have tried the offering, and about 30 percent are first-time advertisers on Facebook. More than 70 percent of pages who have tried Promoted Posts have become repeat customers, Sandberg says.

Then there are Facebook Offers, which are a type of post that pages can use to drive interest and sales for their business. In September Facebook began requiring page owners to spend a minimum of $5 or $10 per Offer, with the option to pay more to promote the deal and reach a larger audience. As with Promoted Posts, costs can vary by page, however the first Offer a page creates is free. Sandberg says costs per redemption for Offers compare favorably to those from email, newspaper, paid search and display media based on data from the Direct Marketing Association. Sandberg didn’t say how many pages have tried these offers, but 42 million claimants is significant. In October Facebook said the majority of users who claim an Offer on the social network do so after seeing a story about it from a friend, not the original page post, indicating the viral nature of the promotion.

Facebook today reported $1.59 billion in revenue for the fourth quarter of 2012 ended Dec. 31 — a 40 percent increase from the $1.13 billion reported in Q4 2011. Revenue from advertising was $1.33 billion, representing 84 percent of total revenue and a 41 percent increase from the same quarter last year.

Facebook earned $5M from non-game payments in Q4 2012, expects Gifts and other revenue sources to grow slowly

creditsFacebook today announced that $5 million of its $256 million payments business came from sources outside of games, such as Gifts and user promoted posts during the fourth quarter of 2012.

The company didn’t offer a specific breakdown, but CFO David Ebersman said that user promoted posts were the primary source of that revenue. Ebersman said the company believes in the longterm potential of promoted posts, Gifts and other payments opportunities, but for now they represent a very small portion of overall revenue. Ebersman says the company expects this to continue to be the case through 2013, based on current run rates.

Facebook launched Gifts in September 2012 as a way for users to buy physical and digital gifts for their friends via desktop or mobile. The product rolled out to all U.S. users by mid-December, but the company has not revealed plans to expand Gifts beyond the U.S. for now. Although the company heavily promoted Gifts over the holidays, sales don’t seem to have taken off.
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Facebook reports $1.585B in revenue for Q4 2012, net income of $64M

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Facebook today reported $1.59 billion in revenue for the fourth quarter of 2012 ended Dec. 31 — a 40 percent increase from the $1.13 billion reported in Q4 2011. Net income was $64 million down year-over-year from $302 million, but up from the net loss of $59 million in Q3 2012. Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) for the fourth quarter was $0.03, compared to $0.14 for the same quarter in the prior year.

Revenue from advertising was $1.33 billion, representing 84 percent of total revenue and a 41 percent increase from the same quarter last year. Payments and other fees revenue for the fourth quarter was $256 million.

Monthly active users (MAUs) were 1.06 billion as of Dec. 31, 2012, an increase of 25 percent year-over-year. Daily active users (DAUs) were 618 million on average for December 2012, an increase of 28 percent year-over-year. Mobile MAUs were 680 million as of Dec. 30, 2012, an increase of 57 percent year-over-year.

Mobile revenue represented approximately 23 percent of advertising revenue for the fourth quarter of 2012, up from approximately 14 percent of advertising revenue in the third quarter of 2012.

Although ad revenues have been increasing significantly, particularly on mobile, the growth of Facebook’s payments business has been stagnant. Adjusting for $66 million of additional revenue in the month of December because of accounting reasons, Payments and other fees revenue remained flat year-over-year.

FBREV

Mobile apps see greater engagement, monetization from Facebook login

mobile-developmentA number of mobile developers are reporting more engagement and better monetization among Facebook-connected users than users who do not log in with their social network account, according to a post on Facebook’s developer blog today.

In December, the company announced that nearly 200,000 iPhone and Android apps connect with Facebook. However, many people still think about the Facebook platform being distinct from mobile. Although Facebook does offer a vertical platform where apps can be used within the Facebook.com canvas, it’s also possible for Facebook to be integrated horizontally across any other platform, including iOS, Android and the mobile web. What the company is trying to do now is convince developers why they should integrate their apps with Facebook.

Facebook suggests that a socially connected user is a more valuable user. Developers like Wooga, Ludia, Buffalo Studios and others have offered some evidence to show that users who log into their mobile games with Facebook spend more time and money in the apps. However, the social network is simultaneously gaining a reputation for being a less open platform than it portrays. Today TechCrunch reported that Facebook has blocked data access from a mobile social search app called Wonder, and last week the company took some similar measures against mobile voice messaging app Voxer. [Update: Facebook has also prevented Twitter's new Vine app from using its friend-finding feature.]

Here are the game developer stats Facebook shared in its latest post:

  • In Ludia’s Are You Smarter Than a 5th Grader?, 52 percent of users connect with Facebook, but 70 percent of revenue comes from those users.
  • Ludia also says 63 percent of daily players of Family Feud & Friends connect with Facebook. Retention of Facebook users is double the retention of those who sign in with guest mode. These Facebook users contribute 70 percent of total revenue.
  • Buffalo Studios’ Bingo Blitz sees 55 percent of its iPad audience connecting with Facebook, and those users contributing 62 percent of total iPad revenue.
  • Wooga says users who log into its Diamond Dash game using Facebook are nine times more likely to spend money than players who don’t connect with Facebook.

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Guest Post: Deeper Metrics, Advertising Everywhere and a Showdown with Google, 2013 is the Year Facebook Grows Up

This is a guest post by Alex Peiniger, CEO and cofounder of social media analytics web service quintly.

It’s been an exciting year for Facebook, from the introduction of its new ad formats, to its expansion into social gifting, to being the most watched IPO of the sector. The social networking giant now counts over 1 billion users on its platform, but the question remains — especially following its IPO and initial stock market performance — how does Facebook monetize its sizable consumer base? 2013 is the year Facebook grows up: brands are shifting toward deeper KPIs to measure fan engagement, while Facebook itself has either just launched or is set to release new features that will help advertisers make the most out of the platform.

Here are predictions for 2013 on what will matter to brands on Facebook in the coming year.

1. Facebook Metrics Will Shift To Interaction-Driven KPIs

Facebook metrics are growing up. In the past, size mattered — that is the size of your Facebook fan count. But what we’re seeing is more and more of our clients are shifting their focus away from superficial metrics like fan counts to more interaction driven KPIs such as People Talking About This, interaction rates and response times. As Facebook continuously improves the ways for page administrators to reach the right audience for their content, it’s far more important to reach fans via News Feed and to engage with them, than to simply count that someone Liked your brand. From discussions with our clients, we are also seeing these KPIs going into internal reporting with C-level management, who are demanding more from social media campaigns. We expect that 2013 will finally be the breakthrough year where we stop talking about fan numbers and brands really start dissecting metrics that delve into a fan’s interaction with a brand.
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How Facebook’s latest monetization efforts may take shape in 2013

After eight years focused on user growth and building the foundations of its platform — News Feed, location and Open Graph, among others — Facebook went into 2012 prepared to go public and become more serious about monetization.

The social network launched several new ad types and opened a number of other potential revenue streams. Here’s a look at Facebook’s monetization efforts last year and how they might evolve in 2013.

News Feed/Mobile Ads

News Feed ads, starting with Sponsored Stories, launched in January. These same ad types came to the mobile feed in March, and over time, the social network began allowing page post units and other non-social ads. Mobile app installs came to the feed in August. Facebook previously allowed feed-based ads in 2007 but it had never shown ads on mobile devices until this year. Now, the social network is earning $4 million a day from News Feed ads, with three-fourths of that from the mobile feed. Advertisers themselves are pleased to have more prominent inventory, which generally leads to higher clickthrough rates and lower costs per click. In 2013, Facebook is likely to put more ads in the feed and continue to tinker with their design to optimize performance and improve user experience. We’ve heard a new video ad unit is already in the works, and believe more interactive and immersive experiences could be on the horizon.

Facebook Exchange

Facebook introduced its Facebook Exchange, a real-time bidding system that allows third-party platforms to place retargeting ads on the social network after users visit external websites marked with cookies. FBX came out of beta in September, but only a limited number of partners have access to the exchange. Expect this number to grow in 2013. Early partners are reporting lower costs per acquisition than on other exchanges, and many advertisers are pleased that their ads appear above the fold and on brand-safe pages, which is not always the case with other exchanges where advertisers can’t be sure where their ads are being placed or how many others they’re competing against. The Facebook environment is much more controlled. Retargeting data cannot yet be combined with Facebook’s demographic and psychographic targeting options — nor can it be used for social ads like Sponsored Stories or page post ads in News Feed, but many expect these will become features of FBX in the future. TechCrunch recently reported that Facebook may be looking to bring FBX to mobile.
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Facebook to test option for paid messages between users, announces new filtering controls

Facebook today announced a small test that will allow some users to pay to send direct messages to another user’s inbox rather than their “other” folder. The social network is also releasing new filtering options for users to help users indicate who they want to see messages from.

Facebook has a two-folder messages system. Communications from friends and other close connections appear in the inbox, whereas messages from users who don’t have mutual friends or messages that originated as an email to a user’s @facebook.com account are likely to be sent to the “other” folder. For the most part, this reduces spam, but it also hides some messages that users would want to see.

Now in a limited test among a portion of U.S. users, a sender whose message would have appeared in the recipient’s “other” folder will be prompted with the option to pay $1 to have the message routed to the inbox instead. If the sender chooses not to pay, the message will still be sent but not to the main inbox. Messages sent to the “other” folder do not generate any notifications for the recipient, so they are not always viewed right away. This test is only for user-to-user communications. Companies cannot pay to send messages to consumers. There is also a limit so that users can only see one of these types of messages in their inbox per week, although the message will not be designated as paid in any way.
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Facebook prepping new video ads that could autoplay in the feed, sources say

Facebook is developing a new video ad unit that will autoplay within the mobile and desktop News Feed, according to a source familiar with the social network’s plans.

AdAge first reported about the new product, based on information from industry executives who were briefed by Facebook. Our own source confirms that Facebook has a feed-based video unit in the works and autoplay will be a key feature.

The new ad type could be a major draw for advertisers who have been asking for more prominent and immersive advertising opportunities on Facebook. Video is an especially attractive offering, but it could take some time for advertisers to determine what type of video works best in the Facebook feed as opposed to traditional display units, TV ads or even YouTube.

Advertisers can already pay to promote videos in the Facebook feed and sidebar by creating Page Post Ads and certain types of Sponsored Stories, but users have to click to play them. Facebook hasn’t done much to emphasize this video ad capability to the masses, and it really wasn’t until the second half of this year that advertisers began to take advantage of the unit. With the recent ability to place ads in the feed, videos are more prominent than before, which has encouraged some advertisers to try the format. See an example from McDonald’s Canada to the right.

Autoplay and other enhancements could make future video ad types even more effective, but maintaining a positive user experience is a delicate balance. AdAge reports that the company is still debating whether or not sound will be enabled automatically. The new video ads may also have a 15-second cap, which existing videos do not have. Relevance and frequency will also be key factors that affect how users feel about having the ads in their stream.

It’s unclear whether these ads will be limited to an audience that has already connected to a brand by Liking a page or knowing someone who has, but Facebook seems to be moving away from these requirements and allowing non-social ads to appear in the feed. The McDonald’s example, for instance, does not include any social context and was shown to a user who had not Liked the page. However, as we’ve pointed recently, Facebook’s mobile versions lack options for users to provide negative feedback about ads and opt-out of future messages from an advertiser. When the social network launches a new ad type, it should be sure to give users a way to report and hide videos they don’t like.

McDonald’s ad screenshot via Attention Industry.

Facebook mobile platform gains ground with 200K apps now connected

Facebook today announced that nearly 200,000 iPhone and Android apps connect with Facebook and 45 percent of the top grossing iOS apps integrate the social network’s SDK, shining light on how the company’s mobile strength goes beyond its own apps.

At our Inside Social Apps conference in New York this week, there was a lot of discussion about which platforms to build on. For many developers, it’s still a common question about whether to build for Facebook or for mobile. Although Facebook does offer a vertical platform where apps can be used within the Facebook.com canvas, what’s often not discussed is how Facebook can be integrated horizontally across any other platform.

“We hear a lot, ‘Should I build a Facebook app or an iOS app, an Android app?’” Facebook’s Director of Platform Partnerships David Fisch said Monday during a fireside chat with Inside Network Managing Editor AJ Glasser. “Facebook is complementary to all of these. Since we’ve started, we’ve talked about how it’s a social layer. It started with web and now moved to mobile. Because there are so many different devices and you want to connect people across them, by definition, Facebook has to be part of all of them.”

An iOS app can be a Facebook app. A mobile website can be a Facebook app. A console game can be a Facebook app. Your car, your shoes, your credit card or your toothbrush can be Facebook apps.

The misperception that Facebook apps are limited to those on Facebook.com contributes to skepticism about the company’s longterm potential, especially on mobile. The market hears that users and developers are turning to “mobile games” over “Facebook games” and starts to count Facebook out. The reality is that nine of the 10 top grossing iOS apps connect with Facebook. The majority of the top Open Graph applications — those using Facebook’s latest sharing features — are open web and mobile integrations. In fact, six of the top 10 apps with the most monthly active users connecting with Facebook aren’t canvas apps. They range from websites to mobile apps to desktop software.

Facebook has been talking about being a “social layer” since 2008, and yet it’s still largely regarded as a single channel for developers. What does Facebook have to do to prove its horizontal platform is worth talking about for every mobile app, website or web-connected device?
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