Sociable Labs Promises ROI On Facebook Commerce

Return on investment in social commerce? Most vendors in this space promise that, but ROI guides the new Facebook Connect-driven product that Sociable Labs is launching today.

Return on investment in social commerce? What vendor doesn’t promise that? Well, ROI guides Sociable Labs’ new Facebook Connect-driven product that debuts today.

The company’s ROI-Guided Social Design combines the capabilities of Facebook’s social graph with the e-commerce capabilities of merchants’ sites, said Founder and Chief Executive Officer Nisan Gabbay.

Gabbay and Sociable Labs have help in the form of $7 million in series-B venture financing, which was led by Battery Ventures, with participation from series-A lead investor Javelin Venture Partners. Battery Ventures Partner Brian O’Malley was also added to Sociable Labs’ board of directors.

The venture capitalists and Sociable Labs’ CEO think the company is unique compared to other social commerce providers:

Retailers have been focused on the wrong things — acquiring Facebook fans but not really doing much with that, monitoring consumer conversation — none of that really drives sales. Fan pages and messaging fans is another form of business. The true value is in facilitating real communications and real interaction, and the best way to do that is to put it in context when people are on a shopping site.

He stresses the importance of information from friends when it comes to influencing purchasing decisions, examples of which are the clients and Rue La La. Regarding the former, he says, “if you’re looking to run a 5K and want to see if any of your friends are running” it too and what kind of shoes and other gear they bought for the race.

On Rue La La, he says:

If you come to Rue La La and have authorized Facebook Connect for the site, and you’re looking at a pair of Gucci shoes, we can alert you, “Here’s a friend of yours who is a fan of Gucci. Why don’t you alert them about this offering?” The data come from Gucci. “Here are friends of yours who have purchased items from Gucci, or reviewed Gucci products.”

Is ROI-Guided Social Design a viable business model? Gabbay, who has been working in the Facebook ecosystem since 2007, said that when using the platform:

Traffic converts 300 percent better into sales than traffic from Facebook fan pages, and also better than traditional forms of online marketing. It’s a win-win for marketers and consumers

We measured the percentage of visitors logged into Facebook while shopping or browsing and found that, on average, the total was 40 percent across all of our customers. Third-party websites are benefiting from the high degree of engagement Facebook created on its own site. Increased user participation drives a lot of great benefits for commerce sites.

When asked whether Sociable Labs encountered privacy concerns from Facebook users, he added:

Do users want to have their Facebook data utilized on other websites? We’re finding that this is not the challenge. When users want to engage in this sort of application, typically, 50 percent to 65 percent will authorize usage of their Facebook information on this type of site. We are providing the right context for the user and making them feel comfortable with how the data are being used.

We asked Gabbay about the impact of the changes Facebook began implementing last month, including the open graph, and this is what he had to say:

Facebook is moving in the right direction with the opening of open graph to include more user action types. User action types are going to become much broader — this Facebook user purchased this item, was shopping for this item, reviewed this item — a lot more context, a lot more relevancy.

The more options Facebook offers, the more complex it is for people to understand how to best utilize it on their sites. We enable our customers to test all of these things and measure how users participate in it, and how it impacts traffic and sales for them.

It’s hard for a mainstream website to stay on top of all of this and figure out how to apply it, and how to build a great social design on their site. Facebook’s changes add a layer of complexity for them — they’re happy to have a third party like us helping them to figure it out. We’re the advocate for them. We’re critically evaluating what Facebook is doing and guiding them to the best practices for their business, rather than doing what Facebook suggests.

The only way to get this to work is to experiment with it and test it in an easy and low-cost way.

Readers: Are you more comfortable shopping online on retailers’ e-commerce sites, or have you found Facebook storefronts to be useful, as well?

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