Borrowing ideas from the location-based social networking site Foursquare and the growing group-buy shopping phenomenon, Facebook is hoping to boost its advertising revenue with a new feature, Facebook Deals, which launched Monday in Canada.
The social media giant has partnered with several retailers, a movie theatre chain and even the Toronto Pearson International Airport for the beta launch of the feature, which allows users to claim discounts while shopping in the real world if they virtually "check-in" on a store's special Facebook page with a smartphone.
A user can get a 40 per cent discount on books, a $5 pair of jeans, free facial moisturizer or free access to an airport lounge in exchange for a Facebook post, which is by default broadcasted to friends and family unless hidden with a privacy setting.
And unlike the growing multitudes of so-called group buy sites, which typically take a cut for selling discounted digital coupons, Facebook is not seeking any revenue sharing arrangements with businesses.
"Deals is free and that's our plan," said Elmer Sotto, Facebook Canada's head of strategy, at a launch event in Toronto.
"We don't take any percentage or back-end revenue from the deal ... any deal creator can use our advertising product — which is available to everybody — to create advertising about that particular deal, so that's one source of revenue for us."
When users are at a store offering a deal they can use a touchscreen phone to "check-in" through an app or Facebook's website, and then show a cashier an on-screen coupon to get the discount.
Users can also search the nearby vicinity to see which other retailers are offering deals through Facebook.
Facebook says no personal information is shared with businesses. Demographical information like age and sex is available to businesses, however, if the sample size of buyers is large enough to not identify users.
Sotto said Facebook has more than 10 million Canadian users that use the site daily, although he would not break out how many use the mobile platform, the target audience for Facebook Deals.
Sotto said users without smartphones are being left out because the idea for the feature really is about harnessing Facebook on the go.
And in what sounded like a jab at the group buy concept, Sotto said Facebook is more interested in leveraging the power of users' modern technology, like smartphones, rather than asking users to carry around pieces of paper.
"In the past, the model where someone prints off the online coupon and walks it over with a piece of paper was acceptable," he said. "Now that we do have these [high-tech] mobile devices it doesn't make a lot of sense."
The coupons sold through group buy sites don't allow users to use them immediately and require planning in advance, unlike Facebook Deals, he added.
"If you see there's a deal at the H&M on Queen Street that's something that is highly relevant at that very moment you can then walk in and claim the deal, which can't be replicated by something that you print out of your computer three or four days before you even think about wanting to go shopping."
Facebook Deals launched in the U.S. last November.