Facebook Launches 'Gifts' in Crafty Data Play
Facebook is looking to tap into a new revenue stream of forgetful friends by launching a service that is integrated with birthday reminders.
It works by first letting the buyers browse through the selection of gifts (currently a hodgepodge including $35 cupcake orders from Magnolia Bakery and a $5 Starbucks gift card). Once they've made a selection, the recipients get an alert and provide a shipping address. Then the buyer enters credit card information to make the payment.
Ka-ching! Facebook gets a credit card number, a street address and a host of other identifying information it currently doesn't have about its users.
The launch looks like a way to profit from a popular feature (and replaces the virtual gifts that were once ubiquitous). And Facebook will make money by taking a cut of these transactions on a sliding scale depending on the partner and product, according to a spokeswoman. Facebook currently takes a 30% cut of transactions made with virtual "credits" purchased on the platform, which are almost entirely used for gaming.
Facebook also receives access to street addresses, which recipients would be voluntarily providing, enabling the kind of online-offline targeting the company is already doing by allowing third parties to target their customers on Facebook by matching phone numbers and email addresses.
The opportunity to tap into the mailboxes of a group of Facebook users who can be targeted by using characteristics like their age, location, relationship status, political affiliation and interests would clearly be something direct marketers would want. This may be especially so for offline marketers who've already matched household data to street addresses and might want to target those households on Facebook.
The product comes from the team that Facebook acquired in its acquisition of Karma, a gift buying startup the company swallowed in May for $80 million.