Facebook Places - The Value for Businesses

posted on 01 February 2011 by Alice Thomas

Rory Cellan-Jones  Technology correspondent, BBC News:

'In my mind there is still one big unanswered question to be settled - just how many people are eager and willing to tell the world where they are? The privacy concerns are obvious, though Facebook has done a reasonable job of making sure users know the implications of using Places and have to opt in to sharing their location.

What I don't buy is the idea that millions will look at Facebook, spot that Joe is in a cafe just yards away and Tracy is in a pub across the road and then arrange to meet up. Perhaps I am too old to get this, but it strikes me that Places is aimed at quite a small section of the social network's users.'

See full commentary here.

I think Rory is missing the point with Facebook Places.  It isn't that Joe and Tracy can meet up with their friends at a café or pub.  It's simpler than that.  Joe and Tracy's Facebook friends will see that they have been to a certain café or pub, and this might influence might decide to go there independently of Joe and Tracy.

Facebook places is word of mouth advertising between communities of 'friends'.  It's simple and incredibly cost effective for businesses.

Some businesses, Starbucks, Debenhams and O2, to name a few in the UK, are choosing to offer deals to customers who check in.   Deals offered by companies are an incentive, a way of enticing and recognising those consumers who promote businesses.  It's an economical way of advertising - take Starbucks as an example.

Through deals with partners announced today, the first 30,000 Facebook users to check in at Starbucks stores in the UK can claim a free coffee.  By pledging to give away up to 30,000 cups of coffee, Starbucks is making sure that its brand is seen by an infinitely greater number of people.

Rory is right about one thing though, Places is aimed at a small section of the social network's users.  The way Facebook works means that a very low percentage of Facebook users 'checking in' are able to spread brand and business names through their network, being seen by all of their friends, and the more friends they have the more valuable they are when the check in.