Google +1, Facebook Likes & the Web Commerce Battle

Facebook Likes, Google’s +1, retweets, Digg votes; when it comes to the social web, every social signal is a positive signal. It seems that we like everything — or almost everything, because when we don’t like something, we don’t say anything about it. Sometimes it feels as if we are living inside one giant Kumbaya bubble, and that leads me to wonder: Should we trust the fidelity of these social signals to begin with?
As best-selling author Barbara Ehrenreich wrote in her recent book Bright-Sided, that positive thinking is “a water carrier for the business world, excusing its excesses and masking its follies.” I am a cynical optimist and that is why I often wonder, what are likes really good for? In a recent piece, Danny Sullivan, the editor of Search Engine Land, pointed out that Facebook Likes tend to boost traffic to various websites. He cites Facebook data as saying that by implementing Facebook Likes, denim maker Levi’s say they received a 40-times increase in traffic.
But did those likes increase Levi’s sales or their market share? No. The San Francisco-based denim maker is still sucking wind when it comes to growing denim sales, likes notwithstanding. Confounded, I started looking for answers, partly by reaching out to my virtual Twitter friends. And that led me to Scot Wingo, CEO of Channel Advisor, a web commerce services provider based in Research Park, North Carolina.

Money and Likes

When I asked Scot if there was a direct correlation between Facebook Likes and actual sales, he candidly admitted that at present there isn’t much correlation. But he, like Facebook itself, is betting that the Facebook Likes will become an increasingly powerful signal in transactions on the web.
“In 12 months it (Facebook) could become a legitimate monetization option,” Wingo predicts, and in the process it could end up becoming the disruptor of web commerce. It would then become a big thorn in the side of Google, which currently derives nearly 40 percent of its revenues from e-commerce-related activities. He is predicting that we are going to see “like” influenced web commerce during the holiday season this year.
Wingo says that, today, merchants big and small are interested first in Facebook, then in mobile and then in local when it comes to their e-commerce strategies. With nearly 700 million members, Facebook has the momentum to become a big driver of sales for these merchants. And the Like button is at the heart of it.

Not all likes are created equal

On Facebook, there are likes that allow you to become fans of a brand or like a photo or an article. Of course, when you like a brand, you also open yourself to becoming the “sponsored ad” that is sent to your friends on Facebook. A lot of retailers are doing that. There is another aspect to that: when you like a brand (aka you become its fan), you are essentially giving the brand permission to message you. Think of it as a way for retailers to use Facebook to send you coupons and deals based on what you like.  While these deals are not personalized, they are personal since you are a fan of that brand.
And then there are the off -Facebook Like buttons — about two million of them spread across the web. There are two kinds of off-Facebook Like buttons (though they look the same) – ones thatfolks like GigaOM use on their website and the special Open Graph protocol-based Like buttons that are for brands, retail outlets, musicians, anyone who wants to create a direct relationship with an actual person. A Facebook spokesperson described these Like buttons as Facebook away from Facebook.
So for example, if you like a band it will publish that information to your newsfeed. So far only entertainment sites and a handful of news outlets are using these special kind of like buttons. However, they are the ones that can create a new dynamic for commerce. Facebook’s Open Graph API has had some enhancements and in theory it allows retailers to have richer metadata such as product types and SKUs attached to their Likes.

In theory, if you liked a pair of jeans on the web, a retailer can target you on Facebook with a discount to get your business. Remember the “personal data” resides with Facebook and not with the retailers, so these interactions can only happen on Facebook – for now. Similarly, the metadata attached to “likes” can help deliver search results that are optimized around one’s preferences, as long as you are logged in using Facebook Connect.

Google doesn’t like the Likes

And that is one of the things spooking Google, which launched the “+1” feature almost as a defensive countermeasure, though it’s not clear if that is going to have any impact anytime soon. Google’s latest revision of the +1 button will allow publishers to embed the button into their web properties.
In a blog post, Google writes, “Today, we’re releasing +1 buttons to the whole web. As a result, you might start seeing +1 appear on sites large and small across the Internet.”
To the naked eye, it seems all about bringing more traffic to web publishers, but in reality it is all about business, as Frank Watson had pointed out on Search Engine Watch earlier this year. As Google itself notes, “With a single click you can recommend that raincoat, news article or favorite sci-fi movie to friends, contacts and the rest of the world. The next time your connections search, they could see your +1’s directly in their search results, helping them find your recommendations when they’re most useful.”
The Like button, when put in the context of web-commerce, is as powerful an indicator of intent as search is, Wingo said. “I would say because it is more personal and social, it is one step closer to the end customer, and as a retailer, that is something that is very appealing.” No wonder Google’s chairman Eric Schmidt is kicking himself for blowing it when it comes to social!