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Facebook Gifts Allows for in App Purchases for Businesses

Facebook continues to change things to improve their user experience. Since 2012, Facebook allowed “Facebook gifts”, a way for businesses to sell items to user. Normally the gifts ranged in a variety of digital items and gift cards. As of August 12, 2014, Facebook has stopped the Facebook gifts section of the website and has reassigned employees to other areas of website management.

What is Replacing Facebook Gifts?

Instead of sending someone a gift card when you wish them a happy birthday on Facebook, people will see “buy” buttons for ecommerce purchases within the site. These ads will target people based on websites you frequently visit and they have an auto-fill feature to make it easier to purchase through the site as it populates your billing information. Facebook is focused on providing a better user experience and feels removing Facebook gifts will make it easier for people to wish others a happy birthday without being overwhelmed with reminders and ads to buy them a gift.

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Why Remove Gifts?

So why the shift for Facebook? Doesn’t Facebook gifts provide them with a revenue stream? When Facebook originally acquired the gifting app Karma in September 2012, they focused on promoting sending a gift to friends without needing an address. Facebook wrapped a digital gift and posted it to the walls of friends. If a person sent a teddy bear or a physical gift, the gift recipient would receive a notification on their wall and would then need to input their address. Facebook took a major financial hit to acquire and promote the app on their website. The warehousing costs were another financial blow to the company as Facebook gifts just didn’t seem to take off the way the company hoped. When gifting a physical present didn’t take off, Facebook worked hard to promote sending gift cards and digital gifts. The problem they found was when a person received the “Omni-Gift Card”, most stores didn’t know what the gift was for, and some had a difficult time honoring them. Facebook then shifted to having companies link directly to their gift card website instead of the Facebook gift card. Facebook gifts just never seemed to resonate with users, and was more of an annoyance than a positive feature. This prompted Facebook to abandon gifts and move toward other ways to sell on their website.

The Future of Facebook Commerce

Since Facebook wants to promote a positive experience for companies as well as users, they are adding other methods to make money. Businesses can sell more to Facebook users through the use of their checkout store. The new updates will allow a user to quickly find a product they want based on an ad they have received. The entire checkout process is easy to do thanks to the new buy button. Not only is Facebook focused on selling within their website, they are helping to drive offline sales too. Using customer information on the site, Facebook will use a new tool called “custom audiences” to create ads that are specifically targeted to the user.

Although Facebook gifts never took off the way they wanted, there are still other ways for the social media giant to make money. Facebook has a lot of data on their users, making it easy for them to inject a number of ads targeted to users that will make companies a lot of money.

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