Commercial Facebook Applications: Is There Hope or Only Hype?

Ed Whiting from Travel Remark put together this eye-opening video about Facebook travel applications. Just for fun, take a guess how many travel-related Facebook applications there are before you click play (the grand total will be revealed at the end).

And this is just one category of commercial applications, folks.

When Facebook applications were launched last year, first movers in ecommerce included Blue Nile’s Wish List and Backcountry’s Steep and Cheap. I give credit to these retailers for giving it a shot. Unfortunately, almost a year later you can count the number of daily users for these apps on one hand.

Other social shopping applications like StyleFeeder and Polyvore get a few thousand daily users – not bad, but they are definitely the exception.

Challenges in Social Shopping Facebook Application Marketing

1. Application Aggro – Requests to add applications from friends are no longer trusted. Much worse, in fact – it has turned friends into perceived spammers and prompted many Facebook statuses along the lines of “stop sending me [radio edit] applications!

2. Saturation – At this stage in the game, there are so many applications that to get popular, you have to be remarkable. You have to provide so much value that people will add your application and risk losing friends to evangelize your app with invites.

3. Commercialization – Judging by daily average users, it’s clear that Facebookers would rather buy and sell each other than buy real products.

4. App ADD – Even if someone adds your application, that person has to be really motivated to use it on a regular basis. Otherwise it will inevitably be removed.

5. Co-dependency – Many apps depend on a sufficient number of your friends’ participation for there to be any practical value (Facebook being a social network, after all). If a user doesn’t have mutual friends with the application, he can get no utility out of it.

Given these conditions, I don’t think there’s a future for e-tailers to win at this game. What do you think?

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8 Responses to “Commercial Facebook Applications: Is There Hope or Only Hype?”

  1. Linda, I saw this coming a mile away, everyone was all hyped about these facebook apps but the reality of them actually “sticking” and producing ROI for online retailers was questionable. Granted some of the pioneers got some branding out of being some of the first on the scene, but everything since there has probably been a bust.

  2. I think you are spot on here…Even if you spend really large amounts of money on developing an awesome app, it is quite possible that it just won’t catch on and provide a decent ROI.

  3. Jeff says:

    I have to totally agree. I’ve asked friends to not send me [radio edit] applications. And I’ve taken to blocking requests, and even dropped a couple of my spammy friends. I’m sure there’s SOME way to do this stuff on FB, but it has yet to be found.

  4. Ed says:

    It’s great how people are adding each other, found a friend’s friend who looks interesting, add up and discover new contents or solutions. That’s just about it.

    Here’s the catch. Developers are only focusing on how much membership they can raise, as one of the derivatives to benchmark for their eventual selling price. Where does user experience or retailers’ interest come into the picture?

    The potential’s there, but nobody’s focusing on it.

  5. Some people still find a way to make lots of money off facebook applications, this goes back to November 2007 – http://www.getelastic.com/facebook-monetization/

  6. Interesting argumentation, but I would put it this way: Facebook wasn’t invented for e-tailers. As the internet wasn’t invented for retailers. Nevertheless there will be startups that will seize the opportunity.

    And even eBay is starting to get better …
    http://www.excitingcommerce.com/2008/06/ebay-live-200-5.html

    Jochen

  7. Hi Jochen,

    I agree with you, Facebook is not a commercial site (but Zuckerberg would love that to change). But it is a sandbox that marketers can play around in, and Stylefeeder and Victoria’s Secret Pink group are rare successes.

    I really don’t mean to slam marketers for trying. Honestly, I think kudos are due for the effort – you never know unless you try.

  8. Hi Linda,

    you are right, successes are rare. But most of the time we are looking at companies from outside that go “into” Facebook to do their marketing.

    I wonder if we see specialized ecommerce startups that come from inside and will be successfull in Facebook first, because they know much better what Facebook users want/need than marketers from outside.

    IrateMonkey tries do it with their shirt contest app, but I wonder if there are better ways to do it.

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