Just How Smart Is Facebook's Monetization Strategy?

By David Veldt - 03/20/2013

What's that, you ask? Oh, just a magnetic poetry kit for cat lovers and a kitten turn table scratch toy. In case you're looking to snag a couple up, these gems were found within Facebook's gift shop.

Now, in case you haven't noticed, Facebook needs new revenue. Right now, revenue for the social giant primarily falls into 3 buckets:

  • Ad revenue
  • Games
  • Other

The ad revenue is relatively straightforward. Similar to other ad networks, they have comprehensive targeting options and are consistently improving functionality, performance and reporting. The revenue they receive from games is through partnerships with the likes of Zynga, from whom they get a share of sales off popular games like Farmville and Mafia Wars.

The 'Other' category is clearly a catch-all, but it includes the increasingly prevalent "Give A Gift" feature that automatically appears beside birthday notifications and now, "life event" related status updates.

This particular aspect of Facebook's monetization strategy is what inspired this post. I'm seeing more and more of these buttons appear alongside "announcement" status updates, in some cases demonstrating a rather advanced system of detecting announcements that may be determined as "gift-worthy."

My first example is rather straightforward. A relative recently made the following announcement on Facebook:

Facebook Monetization

In this example, Facebook recognized that this was the announcement of the arrival of a newborn child, and appropriately assumed someone might want to send a gift. I actually think this is brilliant marketing. They have found a way to be there the second someone shares their exciting news with family and friends. It also subtly reminds some people that sending a gift would be a good idea when some maybe haven't thought of doing so. Within a couple minutes of hearing the news, your gift can be on its way.

In this next example, I started to get a little more impressed with Facebook's sensory abilities.

Give A Gift On Facebook

At this point I assumed that Facebook had a database of phrases that triggered the button and "I got offered the job" was one of them. Maybe all caps and exclamation points weight in as well?

Lastly, another family member recently shared the following update on Facebook:

Facebook Give A Gift


Notice anything missing from this update? Nowhere does it mention the words "anniversary." I somehow doubt "20th Valentine's Day" is in that database of life events I've built up in my mind, but I could be wrong.

Regardless of how these buttons are triggered, it does show that Facebook has some serious minds at work on how to get some dollars from that 1 billion strong user base. I've actually used the gift feature to send some "Reasons I love you" pink pencils to a friend (how else was I supposed to wish him a merry Christmas?) and the process was actually quite seamless.

Time to temporarily block the aunts and uncles, I might have some fake announcements to make to test what triggers these buttons. Do you know how they are triggered? Do you have any theories? Share them in the comments below.

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