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What could Facebook do to increase its digital goods revenue – increase Opportunity. 1/3 February 3, 2009

Posted by jeremyliew in digital goods, facebook, gifts, virtual goods.
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Last September I estimated that Facebook is doing around $35m in digital goods sales. In November anonymous insiders suggested that it was closer to $50-60m in digital goods sales. That’s a healthy run rate, but I think Facebook could make a few product changes to do even better.

I’ll split my suggestions into three categories: Means, Motive and Opportunity.

Opportunity.

Facebook has made some smart changes to its digital goods/gifts product recently, highlighting upcoming friends birthdays on the home page, prompting gifts on birthdays and allowing users to buy birthday gifts in advance. As birthday gifting is the most common usecase for Facebook digital goods, these are changes that increase a users opportunity to buy virtual goods.

Facebook could increase gifting opportunities by prompting gift giving on other calendar events as well. Some are natural gift giving holidays, such as Christmas, Chinese New Year, Valentines day etc. It already provides a selection of holiday specific gifts for each of these occasions. Facebook could generalize the “birthday” section on the homepage into a “calendar” and note upcoming events that are gift worthy, and perhaps even suggest recipients. For example, if you are “in a relationship” with someone on Facebook, then they would be a natural person to prompt for a Valentines day gift.

Chinese New Year themed Facebook gifts

Chinese New Year themed Facebook gifts

Facebook could also prompt gift giving on certain notifications in the feed that might be “gift worthy”. Especially notable are changes in relationship status (e.g. moving from “in a relationship” to “married” or to “single” for example), but others might include changing address (housewarming gift?), changing educational or job status (graduation gift, or new job gift etc).

Finally, Facebook could prompt for gifting more generally through more, and more direct, calls to action. “Give a gift” is the fourth option for writing on someones wall, and moving it to first would likely increase gifting immediately. So would prompting for gift giving (not just comments) on Status Updates on a profile and in the news feed. Simply putting a link to “gifts” as the default first application in the application box in the right rail would help.

I suspect that increasing opportunity could increase gift giving by 50-100%.

What other ideas do readers have?

Tomorrow, we’ll cover means.

Comments»

1. nitesh - February 3, 2009

facebook should change the default profile experience for members that have a birthday. When I see a friend’s birthday on my home page, I click their name and post a comment. The experience should be click on the name and the “give a gift” tab should be open with the the “birthday” category selected on their profile page. That would remove two clicks from the gift giving experience and may result in much higher click-thru/purchase rate.

2. Raj - February 3, 2009

#1) Integrate actual gift cards (behind a gift ). Say I could buy a usd 100 gift card, which can be redeemed against amazon, or some other online partners. Also receiver may again gift these USD100 (or part thereof) to another person. Now we have physical gifting integrated, as well as a trading economy on gifts. not sure if this is in oppurtunity section though

#2)Say sorry gifts. Why gifts on +ve thing. give something on -ve sentiments

3. What could Facebook do to increase its digital goods revenue - increase Means. 2/3 « Lightspeed Venture Partners Blog - February 4, 2009

[...] last, and arguably most important factor, Motive. Possibly related posts: (automatically generated)What could Facebook do to increase its digital goods revenue – increase Opp…Citypixel.com launched Facebook appFacebook will rule the world in 33 days! Ummm … not.Social Web [...]

4. What could Facebook do to increase its digital goods revenue - increase Motive. 3/3 « Lightspeed Venture Partners Blog - February 5, 2009

[...] its sales of digital gifts, breaking down tactics into three categories, Means, Motives and Opportunity. We’ve covered Means and Opportunity, and today we’ll address [...]

5. WhatsYourPlace » Blog Archive » Virtual Goods is NOT about buying pixels - February 6, 2009

[...] been explored comprehensively (among related issues) by Jeremy Liew in a post trilogy, starting here -Facebook recently followed some of this advice, as FB insider Kristen Nicole observed here and [...]

6. mectruy - February 8, 2009

For information thank you but Full address where did not know , Facebook ?

7. What Could Facebook Do to Increase Its Digital Goods Revenue? | Webtrendblog.com - February 10, 2009

[...] article is based on a series of posts that can be found here, here, and [...]

8. Need to find gift idea inspiration? | My Lifestyle Blog - June 2, 2009

[...] What could Facebook do to increase its digital goods revenue – increase Opportunity. 1/3 (lsvp.wordpress.com) [...]


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