Mar 4, 2010

Five things you need to know: Facebook-PayPal tie-up

Facebook has recently partnered with PayPal to offer advertisers and users a way to make payments to the social media giant and its developers. Matt Sutton (pictured), managing director of Aktiv Digital in Singapore, gives us five reasons why the Facebook-PayPal partnership makes sense.

Facebook PayPal
Facebook PayPal
1. Client base. Facebook has been extremely astute in making the site easily accessible for SME’s as a self-serve advertising option. This can be seen in the number of retailers marketing their services and products there. These companies don’t have the dollars to justify an intermediary like a media planning agency, but still have a requirement to reach a large number of people at low investment levels. Facebook delivers this for them, and in turn they deliver a huge market in terms of the volume of advertisers that are available. In this sense, they’re getting some of the market share that Google has been dominating and where other social media like Friendster have all but missed out. It makes sense for them to protect this revenue stream with an easy payment route like PayPal.

2. Distribution network. It looks like we are seeing a streamlining here in Asia of the distribution network for purchasing Facebook ads. It’s no secret that Facebook is looking to put in place its own team. It looks likely that we're going to see a simplified dual purchase approach: Firstly, PayPal purchased basic ads (Social ads etc) for SME’s and secondly, an internal team for integrated and bespoke requests from large brands with intermediary representation.

3. Retail. The most successful social networks here in Asia have a strong retail element. For QQ in China, reports tend to suggest that anything up to 90 per cent of their revenue is from retail purchases. Further integration with PayPal is a likely indication of Facebook opening up to the creation of further shop fronts where purchases are made within the platform without the need to move away from the site.

4. Local relevance. The point to stress here is that Asian users are already extremely comfortable with PayPal as their payment method of choice for online transactions. All those users in Asia-Pacific will be extremely comfortable using it for payments on Facebook.

5. User behaviour. Online apps and games are big news. Facebook RockYou, one of the world's largest creators of apps and games such as HugMe and ZooWorld across social media platforms, recently recorded numbers larger than Facebook itself! In places like Hong Kong and the Philippines, over 25 per cent of the online population use these games and apps on Facebook every month. PayPal allows them to trade real currency for online currency and fully engage in such platforms.
 

Related Articles

Just Published

8 hours ago

Polestar takes (subtle) aim at Tesla as EV wars heat up

The new OOH campaign from Forsman & Bodenfors is promoting big rebates for Tesla owners.

15 hours ago

WPP reports 2.7% revenue decline in Q1 2025

China continues to slip, recorded the steepest revenue dip among the agencies top five markets.

17 hours ago

Reaping Jumbo profits: How brands see a niche in ...

How did an animated film about an orphan’s journey to find courage become Southeast Asia’s highest-grossing animation? Smart product placement and brand collaborations played a key role.

17 hours ago

How ASICS India is turning footprints into funnel ...

From gait scans to geo-targeted ads, the sporting goods group laces together tech, retail, and events to chase India’s growing base of runners.