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Exploring F-Commerce
                   	

        April, 2011
About me
       	

                  José Matías del Pino 	

                  Founder at Ondango	

                  	

                  Industrial Engineer, MBA	

                  Graduate of The Founder Institute	


                  More than 2 years of experience in the
                  German internet industry as founder (mobile
                  content) and as Business Development
                  Manager (monetization of online games).	

                  	

                  Previous industry experience in logistics
                  (Procter & Gamble), marketing (Robert
                  Bosch) and consulting (The Boston
                  Consulting Group).	





 Ondango	
  -­‐	
  Confiden-al	
                                 2	
  
Agenda
                           	


1.  Introducing Ondango
    
        	

2.  The f-Commerce space
        
            	

3.  Lessons learned and best practices	





                      Ondango	
  -­‐	
  Confiden-al	
     3	
  
Facebook is the new Internet
                                   	

             600 million users
                             	

290 million people play games on
Facebook at least once a month	

                                   Social Games	


5 billion pieces of content are shared
on Facebook each week	

                                            Social Sharing	


Facebook is the second largest traffic
source for online videos	

                                         Social Media	


More than 2 billion chat messages are
sent each day	

                                                    Social Communication	




                But what about shopping?	


                                 Ondango	
  -­‐	
  Confiden-al	
                               4	
  
Introducing Ondango
                                   	


           Shop owners use                Disconnected experience
                                          between Facebook Page      Limited capability to reach
        Facebook as marketing
                                                                           more people	

               channel	

                        and shop	





          Transforming their                  Users never leave
                                                                      Viral features to spread
       Facebook presence into a             Facebook to complete
                                                                              the word	

             sales channel 	

                  the purchase	





Ondango is a shopping solution that helps people and
 small shops sell products directly on their Facebook
        Pages, by leveraging social interactions.
                                                	


                                  Ondango	
  -­‐	
  Confiden-al	
                                   5	
  
Ondango live demo
                	

                                        Easy navigation	

                                        Different product variations	

                                        Like button	

                                        Image gallery with zoom	

                                        Rich HTML support for product description	

                                        Flexible payment and shipping methods	

                                        Comments with “post on news feed”	

                                        Call to action for new shop owners	



                                        … and much more:
                                        Localization	

                                        Multiple currencies	

                                        Optimized checkout flow	

                                        Facebook-like user interface	





     Ondango	
  -­‐	
  Confiden-al	
                                                6	
  
Agenda
                           	


1.  Introducing Ondango
    
        	

2.  The f-Commerce space
        
            	

3.  Lessons learned and best practices	





                      Ondango	
  -­‐	
  Confiden-al	
     7	
  
The market of e-Commerce in Facebook
                                   	


N° of shop owners with Facebook Pages	

                              1,500,000 	

                                                                              x
                                                                              	

Average N° of products sold per shop/year	

                                   60	

                                                                                x
                                                                                	

Average price of a product	

                                                55€	



Global market size of f-Commerce:	

                               4.5 Billion €	



                                Ondango	
  -­‐	
  Confiden-al	
                         8	
  
4 types of f-Commerce
                                	


1.  Fan Page Full Shop
    
        	

2.  Fan Page Storefront
        
            	

3.  Canvas Apps
            
                	

4.  In-Feed Shops	


                       Ondango	
  -­‐	
  Confiden-al	
     9	
  
Fan Page Full Shop
                                	


A full-fledged shop that exists completely within a
Facebook Page, i.e. the user never leaves Facebook in 
order to complete the purchase.	





            Examples: Ondango, Payvment	



                      Ondango	
  -­‐	
  Confiden-al	
        10	
  
Example of Fan Page Full Shop
                                 	

Payvment:	





                Ondango	
  -­‐	
  Confiden-al	
     11	
  
4 types of f-Commerce
                                	


1.  Fan Page Full Shop
    
        	

2.  Fan Page Storefront
        
            	

3.  Canvas Apps
            	


4.  In-Feed Shops	


                       Ondango	
  -­‐	
  Confiden-al	
     12	
  
Fan Page Storefront
                                	


A shop that exists within a Facebook Page, but when a
users clicks on a product, it is redirected to an online
shop outside of Facebook to complete the purchase.	





            Examples: Dawanda, ShopTab	



                      Ondango	
  -­‐	
  Confiden-al	
       13	
  
Example of Fan Page Storefront
                               	

Dawanda:	





              Ondango	
  -­‐	
  Confiden-al	
     14	
  
4 types of f-Commerce
                                	


1.  Fan Page Full Shop
    
        	

2.  Fan Page Storefront
        
            	

3.  Canvas Apps
            	


4.  In-Feed Shops	


                       Ondango	
  -­‐	
  Confiden-al	
     15	
  
Canvas Apps
                            	


A shop that exists as an iFrame within Facebook, but
not on a Facebook Page. The user can generally
complete the purchase within Facebook.	





           Examples: Milyoni, Shop Igniter	



                      Ondango	
  -­‐	
  Confiden-al	
     16	
  
Example of a Canvas App
                                    	

Milyoni:	





                      Ondango	
  -­‐	
  Confiden-al	
     17	
  
4 types of f-Commerce
                                	


1.  Fan Page Full Shop
    
        	

2.  Fan Page Storefront
        
            	

3.  Canvas Apps
            	


4.  In-Feed Shops	


                       Ondango	
  -­‐	
  Confiden-al	
     18	
  
In-Feed Shops
                            	


A shop that exists on an embeddable widget that can
be shared through Facebook, and thus it can show up
on a user’s news feed, where she can complete the
purchase.	



               Example: Sellaround	



                    Ondango	
  -­‐	
  Confiden-al	
     19	
  
Example of an in-Feed Shop
                                   	

Sellaround:	





                    Ondango	
  -­‐	
  Confiden-al	
     20	
  
f-Commerce: Summary
                                          	

      Type	

              Example	

                               Pros	

           Cons	

                                                     Best shopping             Limited space to
Fan Page Full Shop	

                                experience within         display products	

                                                     Facebook	


                                                     Easy to replicate         Longer purchase
Fan Page Storefront	

                               existing online shop	

   funnel, users have
                                                                               to leave Facebook	



                                                     More space to             Facebook is used
Canvas App	

                                        display products	

       just as a frame for a
                                                                               normal shop	


                                                     Products show up          Only allows to sell
                                                     directly on the           one product,
In-Feed Shop	

                                                     news feed	

              unusual shopping
                                                                               experience	



                                 Ondango	
  -­‐	
  Confiden-al	
                                        21	
  
Agenda
                           	


1.  Introducing Ondango
    
        	

2.  The f-Commerce space
        
            	

3.  Lessons learned and best practices	





                      Ondango	
  -­‐	
  Confiden-al	
     22	
  
Lessons learned and best practices
                                    	


1.  Users don’t install apps
    
        	

2.  Tips on NFO (Newsfeed Optimization)
        
            	

3.  Be different
            
                	

4.  What’s in f-Commerce for Facebook?	


                    Ondango	
  -­‐	
  Confiden-al	
     23	
  
Users don’t install apps
                                  	


FBML made necessary that the users install a shop’s
app in order to purchase something.	




Example: Payvment	





                       Ondango	
  -­‐	
  Confiden-al	
     24	
  
Users don’t install apps
                                     	


          Since February 2011, Page Apps can be 	

                  developed using iFrame	


	

Advantages:	

•     No app installation necessary	

•     Product deep linking	

•     Better SEO	



                        Ondango	
  -­‐	
  Confiden-al	
     25	
  
Users don’t install apps
                                         	


Ondango switched from FBML to iFrame in April 2011.	

	

	

      Up to 80% of users would drop-out from the purchase funnel
                  when requested to install our app!	





                             Ondango	
  -­‐	
  Confiden-al	
        26	
  
Lessons learned and best practices
                                    	


1.  Users don’t install apps
    
        	

2.  Tips on NFO (Newsfeed Optimization)
        
            	

3.  Be different
            
                	

4.  What’s in f-Commerce for Facebook?	


                    Ondango	
  -­‐	
  Confiden-al	
     27	
  
Tips on NFO	


      NFO is the f-Commerce Equivalent of SEO	



                                       SEO	

                             NFO	

What do we want to       Show up higher on search               Shop up more frequently
achieve?	

              results	

                             on our fans’ newsfeeds	



What do we want to       PageRank	

                            EdgeRank	

maximize?	



How are these formulas   Sum of (PR of outbound                 Weight x Affinity x Time
calculated?	

           links / # of inbound links)            Decay	

                               	

	



                             Ondango	
  -­‐	
  Confiden-al	
                                 28	
  
Tips on NFO	

            How does Facebook calculate EdgeRank?	


                    Weight x Affinity x Time Decay 	


Weight defines a hierarchy between different types of content shared on Facebook. Facebook is
said to adapt this hierarchy to their strategic needs.	

Right now: Facebook Places  Video Update  Picture Update  Link Update  Status Update	


Affinity defines how relevant is a certain content for the content viewer. Different variables
determine the affinity, but the two most important are: How much have you interacted with
content from that source before, and how much do your friends interact with content from that
source (Interaction = likes, comments, shares, etc.).	


Time Decay lowers the EdgeRank of a piece of content depending on how old it is.	




                                     Ondango	
  -­‐	
  Confiden-al	
                         29	
  
Tips on NFO	


How can I improve my EdgeRank?	


•  Post high-weight content more often (e.g. videos and pictures)	

•  Ask users for feedback or make questions on your status updates (that
   generates likes and comments)	

•  Ask for a large quantity of likes to reveal new content	

•  Create contest that involve commenting on a picture	

•  Don’t be spammy (max. 3 posts/day)	

•  Post content at the right time (status updates sent out in the morning get
   more user activity, and Wednesday is the best day of the week)	




                               Ondango	
  -­‐	
  Confiden-al	
               30	
  
Lessons learned and best practices
                                    	


1.  Users don’t install apps
    
        	

2.  Tips on NFO (Newsfeed Optimization)
        
            	

3.  Be different
            
                	

4.  What’s in f-Commerce for Facebook?	


                    Ondango	
  -­‐	
  Confiden-al	
     31	
  
Be different
                                      	

Users expect different things from a Facebook shop	


 •  Facebook-Only products (e.g. pre-official launch)	

 •  One-time-only availability	

 •  Special discounts	

 •  Limited stock	

 •  Other perks, such as free shipping	



In our tests, Facebook-only products and free shipping
have proven to increase engagement and conversion.	


                               Ondango	
  -­‐	
  Confiden-al	
     32	
  
Lessons learned and best practices
                                    	


1.  Users don’t install apps
    
        	

2.  Tips on NFO (Newsfeed Optimization)
        
            	

3.  Be different
            
                	

4.  What’s in f-Commerce for Facebook?	


                    Ondango	
  -­‐	
  Confiden-al	
     33	
  
What’s in f-Commerce for Facebook?
                                   	


  Facebook will use the same approach as with the
              Social Gaming Industry	


•  When shop owners discover the value of Facebook as a sales channel,
   they will spend more on Facebook Ads (which are cheaper for Facebook
   Pages than for external sites)	


•  Facebook Credits won’t be used for real goods (30% commission).
   Instead, they’ll be used as promotional tools (buy this and get 5 Credits for
   free!)	




                                Ondango	
  -­‐	
  Confiden-al	
                34	
  
Thank you!
         	

       	

jm@ondango.com

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Ondango - F-Commerce - FacebookCommerce - 20. Twittwoch Berlin

  • 1. Exploring F-Commerce April, 2011
  • 2. About me José Matías del Pino Founder at Ondango Industrial Engineer, MBA Graduate of The Founder Institute More than 2 years of experience in the German internet industry as founder (mobile content) and as Business Development Manager (monetization of online games). Previous industry experience in logistics (Procter & Gamble), marketing (Robert Bosch) and consulting (The Boston Consulting Group). Ondango  -­‐  Confiden-al   2  
  • 3. Agenda 1.  Introducing Ondango 2.  The f-Commerce space 3.  Lessons learned and best practices Ondango  -­‐  Confiden-al   3  
  • 4. Facebook is the new Internet 600 million users 290 million people play games on Facebook at least once a month Social Games 5 billion pieces of content are shared on Facebook each week Social Sharing Facebook is the second largest traffic source for online videos Social Media More than 2 billion chat messages are sent each day Social Communication But what about shopping? Ondango  -­‐  Confiden-al   4  
  • 5. Introducing Ondango Shop owners use Disconnected experience between Facebook Page Limited capability to reach Facebook as marketing more people channel and shop Transforming their Users never leave Viral features to spread Facebook presence into a Facebook to complete the word sales channel the purchase Ondango is a shopping solution that helps people and small shops sell products directly on their Facebook Pages, by leveraging social interactions. Ondango  -­‐  Confiden-al   5  
  • 6. Ondango live demo Easy navigation Different product variations Like button Image gallery with zoom Rich HTML support for product description Flexible payment and shipping methods Comments with “post on news feed” Call to action for new shop owners … and much more: Localization Multiple currencies Optimized checkout flow Facebook-like user interface Ondango  -­‐  Confiden-al   6  
  • 7. Agenda 1.  Introducing Ondango 2.  The f-Commerce space 3.  Lessons learned and best practices Ondango  -­‐  Confiden-al   7  
  • 8. The market of e-Commerce in Facebook N° of shop owners with Facebook Pages 1,500,000 x Average N° of products sold per shop/year 60 x Average price of a product 55€ Global market size of f-Commerce: 4.5 Billion € Ondango  -­‐  Confiden-al   8  
  • 9. 4 types of f-Commerce 1.  Fan Page Full Shop 2.  Fan Page Storefront 3.  Canvas Apps 4.  In-Feed Shops Ondango  -­‐  Confiden-al   9  
  • 10. Fan Page Full Shop A full-fledged shop that exists completely within a Facebook Page, i.e. the user never leaves Facebook in order to complete the purchase. Examples: Ondango, Payvment Ondango  -­‐  Confiden-al   10  
  • 11. Example of Fan Page Full Shop Payvment: Ondango  -­‐  Confiden-al   11  
  • 12. 4 types of f-Commerce 1.  Fan Page Full Shop 2.  Fan Page Storefront 3.  Canvas Apps 4.  In-Feed Shops Ondango  -­‐  Confiden-al   12  
  • 13. Fan Page Storefront A shop that exists within a Facebook Page, but when a users clicks on a product, it is redirected to an online shop outside of Facebook to complete the purchase. Examples: Dawanda, ShopTab Ondango  -­‐  Confiden-al   13  
  • 14. Example of Fan Page Storefront Dawanda: Ondango  -­‐  Confiden-al   14  
  • 15. 4 types of f-Commerce 1.  Fan Page Full Shop 2.  Fan Page Storefront 3.  Canvas Apps 4.  In-Feed Shops Ondango  -­‐  Confiden-al   15  
  • 16. Canvas Apps A shop that exists as an iFrame within Facebook, but not on a Facebook Page. The user can generally complete the purchase within Facebook. Examples: Milyoni, Shop Igniter Ondango  -­‐  Confiden-al   16  
  • 17. Example of a Canvas App Milyoni: Ondango  -­‐  Confiden-al   17  
  • 18. 4 types of f-Commerce 1.  Fan Page Full Shop 2.  Fan Page Storefront 3.  Canvas Apps 4.  In-Feed Shops Ondango  -­‐  Confiden-al   18  
  • 19. In-Feed Shops A shop that exists on an embeddable widget that can be shared through Facebook, and thus it can show up on a user’s news feed, where she can complete the purchase. Example: Sellaround Ondango  -­‐  Confiden-al   19  
  • 20. Example of an in-Feed Shop Sellaround: Ondango  -­‐  Confiden-al   20  
  • 21. f-Commerce: Summary Type Example Pros Cons Best shopping Limited space to Fan Page Full Shop experience within display products Facebook Easy to replicate Longer purchase Fan Page Storefront existing online shop funnel, users have to leave Facebook More space to Facebook is used Canvas App display products just as a frame for a normal shop Products show up Only allows to sell directly on the one product, In-Feed Shop news feed unusual shopping experience Ondango  -­‐  Confiden-al   21  
  • 22. Agenda 1.  Introducing Ondango 2.  The f-Commerce space 3.  Lessons learned and best practices Ondango  -­‐  Confiden-al   22  
  • 23. Lessons learned and best practices 1.  Users don’t install apps 2.  Tips on NFO (Newsfeed Optimization) 3.  Be different 4.  What’s in f-Commerce for Facebook? Ondango  -­‐  Confiden-al   23  
  • 24. Users don’t install apps FBML made necessary that the users install a shop’s app in order to purchase something. Example: Payvment Ondango  -­‐  Confiden-al   24  
  • 25. Users don’t install apps Since February 2011, Page Apps can be developed using iFrame Advantages: •  No app installation necessary •  Product deep linking •  Better SEO Ondango  -­‐  Confiden-al   25  
  • 26. Users don’t install apps Ondango switched from FBML to iFrame in April 2011. Up to 80% of users would drop-out from the purchase funnel when requested to install our app! Ondango  -­‐  Confiden-al   26  
  • 27. Lessons learned and best practices 1.  Users don’t install apps 2.  Tips on NFO (Newsfeed Optimization) 3.  Be different 4.  What’s in f-Commerce for Facebook? Ondango  -­‐  Confiden-al   27  
  • 28. Tips on NFO NFO is the f-Commerce Equivalent of SEO SEO NFO What do we want to Show up higher on search Shop up more frequently achieve? results on our fans’ newsfeeds What do we want to PageRank EdgeRank maximize? How are these formulas Sum of (PR of outbound Weight x Affinity x Time calculated? links / # of inbound links) Decay Ondango  -­‐  Confiden-al   28  
  • 29. Tips on NFO How does Facebook calculate EdgeRank? Weight x Affinity x Time Decay Weight defines a hierarchy between different types of content shared on Facebook. Facebook is said to adapt this hierarchy to their strategic needs. Right now: Facebook Places Video Update Picture Update Link Update Status Update Affinity defines how relevant is a certain content for the content viewer. Different variables determine the affinity, but the two most important are: How much have you interacted with content from that source before, and how much do your friends interact with content from that source (Interaction = likes, comments, shares, etc.). Time Decay lowers the EdgeRank of a piece of content depending on how old it is. Ondango  -­‐  Confiden-al   29  
  • 30. Tips on NFO How can I improve my EdgeRank? •  Post high-weight content more often (e.g. videos and pictures) •  Ask users for feedback or make questions on your status updates (that generates likes and comments) •  Ask for a large quantity of likes to reveal new content •  Create contest that involve commenting on a picture •  Don’t be spammy (max. 3 posts/day) •  Post content at the right time (status updates sent out in the morning get more user activity, and Wednesday is the best day of the week) Ondango  -­‐  Confiden-al   30  
  • 31. Lessons learned and best practices 1.  Users don’t install apps 2.  Tips on NFO (Newsfeed Optimization) 3.  Be different 4.  What’s in f-Commerce for Facebook? Ondango  -­‐  Confiden-al   31  
  • 32. Be different Users expect different things from a Facebook shop •  Facebook-Only products (e.g. pre-official launch) •  One-time-only availability •  Special discounts •  Limited stock •  Other perks, such as free shipping In our tests, Facebook-only products and free shipping have proven to increase engagement and conversion. Ondango  -­‐  Confiden-al   32  
  • 33. Lessons learned and best practices 1.  Users don’t install apps 2.  Tips on NFO (Newsfeed Optimization) 3.  Be different 4.  What’s in f-Commerce for Facebook? Ondango  -­‐  Confiden-al   33  
  • 34. What’s in f-Commerce for Facebook? Facebook will use the same approach as with the Social Gaming Industry •  When shop owners discover the value of Facebook as a sales channel, they will spend more on Facebook Ads (which are cheaper for Facebook Pages than for external sites) •  Facebook Credits won’t be used for real goods (30% commission). Instead, they’ll be used as promotional tools (buy this and get 5 Credits for free!) Ondango  -­‐  Confiden-al   34  
  • 35. Thank you! jm@ondango.com