Entering the Era of Social Sign-On and the Open Graph

Retailers primarily use Facebook to create awareness and buzz about their brand, not to drive sales. However, with new innovations in the social media space — namely the integration of social sign-on and Facebook's Open Graph — retailers can now use Facebook profile information to specifically target consumers based on their behavior and their friends’ behavior on the social media site, which can ultimately lead to increased sales.

Retailers on Facebook have a wealth of information available to them once a person "likes" them or when they opt in to social sign-on. Social sign-ons let users sign into their Facebook account rather than having to create a new account with a new password to remember on a traditional e-commerce site. Also, when a consumer registers on an e-commerce site, they're asked to enter general information, like name, address, etc.

This information eventually grows stale, whereas Facebook profiles are updated much more frequently. Social sign-on allows brands to access the plethora of information that floats around on Facebook, enabling them to use that information to create a targeted e-commerce experience.

Enter the social graph. Mark Zuckerberg launched Facebook's Open Graph in April 2010 with the intent to see the connections between people and the things they care about. E-tailers now using this tool can develop recommendations based on users’ friends and profile data. Users can then see recommendations based on their profiles and their friends’ profiles. (Users can also see photos of friends with upcoming birthdays, complete with gift suggestions.)

Behavioral targeting for traditional e-commerce retailers is primarily done via basic product recommendations, which are typically based on past purchases. However, past purchases aren't always indicative of what the person really wants or needs. What a consumer has purchased in the past could have been seasonal or gifts for friends and family.

For example, let's say Jane Doe has "socially signed-on" to Macy's. The day before on Facebook she posted the following: "had an awful commute to work today … my hair froze!" In the past Jane has bought earrings from Macy's — nothing related to frozen hair. But now the savvy marketers at Macy's can see her Facebook post, enabling them to send her a targeted email suggesting a hairdryer or a new hat.

Let's take it one step further and say that Jane "likes" the brand North Face on Facebook. With tools such as social sign-on and social graph, marketers can even offer her North Face hats. This is an example of the unique insight these tools can provide, which simply can't be matched by normal product recommendations.

However, be careful not to make your customers feel uneasy and queasy. According to a July 2010 study by the Marist Institute for Public Opinion, half of social network users are concerned about their privacy on the sites. Typically, this concern is higher in women and consumers over the age of 30.

Other drawbacks to social sign-on and open graph, which are still young, include the ambiguity of the "like" button. Just because a person "likes" you doesn't mean they're 100 percent invested in your brand. There's absolutely no type of commitment by clicking "like."

All things considered, integrating these features into your e-commerce site can be quite beneficial. Social sign-on and open graph can make for a customized and easier shopping experience. Although the full impact of these features has yet to be seen, the growing popularity of social media sites can easily equal the growing popularity of your brand.