Expect a huge announcement from Facebook tomorrow about “Social Ads.” Recently partnered with Microsoft, Facebook’s been sitting on a very large pile of consumer information such as age, political views, favorite movies, college information, marital status and more that lends itself to behavior-targeted ads. Certainly this advertising model has been months in the making.

Depending on the details, there could be some low-cost opportunities for online retailers big and small to market effectively through Facebook. Until tomorrow’s big reveal, here is a recap of the Facebook rumors:

Project Pandemic / Mullets

Facebook may be removing “sponsored groups” and replacing them with sponsored pages that might include interactive games or other Facebook applications developed by Facebook itself, rather than third party developers.

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Juicy Facebook Rumors - Social Ads & More »

The ever-creative Common Craft squad created another educational viral video that’s fun and feeds off the popularity of Facebook’s Zombies application like the un-dead on your brain:

These are the same folks who brought us the Paperworks Series on Social Media in Plain English. Viva link bait.

Did anybody notice today’s Facebook Gift “Wal-Mart Ghost?”

If you’re not familiar with Facebook Gifts, they are little pictures of stuff you can send to your friends. The first virtual gift you send is free, and each additional gift you send is $1, or you can buy a pack of 10 for $5. These pictures can be sent with a short message to your recipient and will appear on their profiles like-so forever unless they are deleted by the recipient.

Why is this a terrible social media marketing tactic? Because social media marketing should be about building community, listening to your customers, engaging in two-way dialog and adding fun or utility to a user’s every day social networking experience (yes, we’re talking Zombies applications here). A ghost that looks like he won a Mr. Wal-Mart pageant is not viral at all. This is an ad, and a really poor one at that. And teenagers / college students are not dumb, they know intrusive advertising when they see it.

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Why Wal-Mart’s Facebook Strategy is Like the I-Rack »

Recently launched eBay Neighborhoods is a hot topic in the blogosphere. Going beyond its member forums, eBay lovers passionate about brands, products, trends and celebrities and eBay sellers can interact and write product reviews, comment on items for sale, provide buyer guides and add pictures to Neighborhoods.

Since it’s new, I didn’t expect there to be a whack of online retailers/brands being represented yet, but I did find one for Juicy Couture.

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How Online Retailers Can Leverage eBay Neighborhoods »

We’ve been talking much about social media marketing here at Get Elastic, blogging, podcasts, viral videos and so on. But what about Facebook applications? What kind of things can you build for this platform that relate to ecommerce? Is it worth it? Who’s doing what and are they successful? Today I’m reviewing 29 ecommerce Facebook applications by shopping engines, deals sites, social shopping sites and online retailers.

User stats are as of October 10 and are subject to change. A note about active users, when products appear on a Facebook profile, just because it’s not updated daily doesn’t mean it doesn’t have a branding impact or fulfill a place for users to express their style/product tastes. Metrics we unfortunately can’t measure are how many invited users add the application (conversion rate) and how many users have added and later removed them (attrition rate).

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Facebook + Ecommerce = 29 Applications Reviewed »

Thanks again to Neil Patel for being our special guest today to chat about social media marketing for online retailers. And thank you to all who joined us live and engaged us with some great questions.

In case you missed our live Webinar, here are some highlights of what we covered. Let’s keep the discussion going. We’d love to hear your thoughts and further questions in the comments section.

What is Social Media, Anyway?

Social media is a tricky space for ecommerce marketers to explore. Not only is it relatively new and largely unknown, but it’s also labor intensive and highly strategic. We kicked off the discussion with the definition of social media — simply put, “human interaction on the Web.” More specifically, we’re talking blogs, social networking sites like Facebook, community forums, video sharing sites, social bookmarking and you could throw in social shopping sites and user reviews in the mix too for us ecommerce types.

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The Secret of Social Media Marketing Webinar: A Recap »

In case you “missed” it (or even if you caught it), this is a recap of Chancellor’s Professor of Marketing and Co-Director of the Sloan Center for Internet Retailing at the University of California, Riverside Donna Hoffman’s keynote speech titled “The Evolution of Customer Experience: 10 Trends You Can’t Afford to Miss.” Here’s the rundown of what Hoffman believes will drive the move from Web 2.0 to (you knew it was coming) Web 3.0.

Most folks still don’t really know what people mean by Web 2.0, let alone Web 1.0 or 3.0. If you Google these terms, you’ll get a variety of opinions. Hoffman presented a simple definition of Web 1.0, 2.0 and 3.0 in terms of how users interact with the available Web technologies:

• Web 1.0 refers to the Web as data, text and images. Users can read and search.
• Web 2.0 ushered in sharing and participation (forums, blogs and so on). Users can interact and submit their own content to cyberspace.
• Web 3.0 is a move towards a “semantic Web.” A concept that the Web can understand itself and user intent through artificial intelligence and perhaps human powered search.

Alright, jargon out of the way, why should etailers care about Web 3.0 ecommerce trends?

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Ecommerce Trends & Customer Experience - Shop.org 2007 »

Last week, the Wall Street Journal published an interesting article about Facebook’s F8 Development Platform. Facebook has been praised for opening up their API to third party developers, something that it’s largest competitor, MySpace, has not offered.

Blue Nile Diamonds, one of the top online retailers of 2006, is one of the first etailers to take advantage of Facebook’s open API. The Blue Nile Wish List has just over 400 users to date in just one week.

How it Works

First you’ll need to add the Blue Nile Wish List to your Facebook applications. Logged in Facebook users can access it here.

Then sign up for an account with Blue Nile (if you don’t already have one), and make sure you use the same email address as your Facebook account or you’ll have to sign up twice. Then just browse the site, and when you see products you like, add them to your wishlist. When you’re done browsing, with one click your wishlist syncs to your Facebook profile, visible to your network, and your friends may see it in their newsfeed.

And this is how it appears in your profile:

This type of application is great branding for Blue Nile, and shows the potential of brand evangelism and the evolution of word of mouth marketing.

The Evolution of Word of Mouth

Word of mouth used to work like this:

1990

Jill buys a watch. Jill wears watch and bumps into Jane at a party. Jane notices watch and raves, asks Jill where she got the watch. Jill says “I bought it at Blue Nile, in Los Angeles.” Jane is a bit disappointed that there is no Blue Nile in Seattle, and she’s not headed for LA anytime soon.

2000

Jill buys a watch. Jill wears watch and Jill bumps into Jane at a party. Jane notices the watch and raves, asks her where she got the watch. Jill says “I got it on Blue Nile’s website.” Jane goes home and Google’s Blue Nile, then browses thru eons of watches. She can’t find the watch that she admired on her friend, but finds something similar and is somewhat satisfied.

2007

Jill likes a watch on Blue Nile’s website. Jill likes the watch and hopes “someone” will buy it for her (hint, hint, boyfriend Joe). Jill adds to her Blue Nile wishlist, and posts it on Facebook. Boyfriend Joe receives notification that Jill posted a wishlist to her profile. Joe visits Jill’s profile, sees the watch and thinks “oh crap, $500.” Boyfriend Joe, remembering the look of disappointment after the Valentine’s gift, does not want to go through that again, and buys the watch. Ex-college-volleyball-teammate-now-living-3,000-miles-away-Jane browses Jill’s profile and see’s her wishlist, loves the watch, and orders one for herself through a direct link from Jill’s Facebook profile. Without even making a purchase, Jill has influenced two others to buy a product from Blue Nile.

Essentially what Blue Nile is doing is it’s allowing users to create customized advertising for Blue Nile as a form of self expression (or hinting), and passively broadcasting it to their personal network. A reall-time conversation is no longer necessary, creating many more opportunities for exposure. And because Facebook users are actively engaged when browsing friends’ profiles, this is far more effective marketing than banner ads, which generally users are conditioned to ignore.

The Right Target Market

At first I wondered if Facebook was the right demographic for luxury goods — high school and college students? Well, according to CEO Mark Zuckerberg’s F8 keynote presentation, the fastest growing Facebook demographic is 25 and older, and currently 60% of its users are outside of college. College/high school graduation is also a great opportunity for gift-giving. And this is the age where many are getting engaged and married. In the last 3 months that I have been using Facebook, I have seen at least 3 friends’ relationship status move from “in a relationship” to “married,” including EP’s own Jason Billingsley.

Who’s Next?

The F8 Platform is a great opportunity for any online retailer, but of course it works best for etailers with the resources to do so. I’m excited to see what other applications beside social wishlisting will pop up in the days ahead. Social bookmarking sites Ma.gnolia and Del.icio.us have already built apps for Facebook. I predict social shopping bookmark sites like ThisNext, Kaboodle and Wists will follow suit very soon.