How would you think about monetization for Facebook Marketplace?

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How would you think about monetization for Facebook Marketplace?

Asked at Meta (Facebook) over a year ago

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Devona Walker · Answer 1 · 2021-11-13T04:37:24+0000

Clarifying questions

What are the revenue channels for FB marketplace currently?
Marketplace has a lot of categories? Do you want to focus on sponsored offerings or DIY postings?
What is the relationship between FB marketplace and current Ads for services and wares?
Are there any concerns of canibalization between the two products?
How do the revenue streams fair in comparison?

BUS

Business Objectives
- Increase revenue among DIY posters and sponsored posts within the marketplace.
- Increase participation/engament/adoption retention in Mktpl.
- Leverage FB princ to create breather brand awareness for marketers w/in platform
- Create a marketplace that makes it easier for users to navigate to items they are interested.
- Create a marketplace with some structure that ensures both buyer and seller has a good experience.
- Create a marketplace that makes desirable objects easy to discover.
- Create a marketplace that
User problems
- Commercial Sellers
  - Secure purchases.
  - Repeat business.
  - Customer acquisition cost on FB per other channels.
  - Ability to quickly post items of FB, see immediate performance data based on product type, when the ad is posted, location, geotargeting.
  - Ability to immediately have a post removed once its no longer available.
  - Limited ad dollars to spend multiple channels to spend on.
  - Limited resources to post/monitor ads/process purchases/ship goods outside traditional business processes.
  - Why FB? Why not Amazon?
- DIY Sellers
  - Posting to FB might be more time consuming than they like.
  - Unlike Amazon, it does not provide for secure transactions.
  - Products are not categorized or easily discoverable.
  - Not reaching the right market segmentation to leverage more purchases.
  - Transportation logistics are not solved by this solution.
  - Limited Tech savvy to implement tools to measure success of posts/knowledge of how to make certain posts for visible to certain targeted purchasers.
- FB buyers
  - Product discoverability.
  - Purchase security -- knowing what I am going to get befor making a purchase.
  - Knowing when I will get what I purchases. Unwillingness to wait for 6-8 to receive my purchases.
  - Product dimensions. Does the product look like what I actually want to receive. Are the dimensions correct. Is the color correct.
  - Navigating Mktp is kind of a pain.
  - Served up items I am not remotely interested in.
  - Ability to compare different providers on FB.
- For this answer I will focus on sellers both commercial and DIY as many of their painpoints are similar.
Solutions

Increase revenue within marketplace for FB/Marketers/Increase customer satisfaction with marketplace to drive better adoption and retention.

Leverage FB princ of bringing people together to help marketers better engage with online purchasers, driving more adoption, revenue and retention and brand trust w/in and w/out platform.

Commercial Sellers
- Account set up management tools.
- Create a customizable template that allows the marketer to Geo-target customer segmentations.
- Receive a weekly downloadable dashboard on performance.
- Automate notifications to user when product has been shipped.
- Create some stickiness for better customer retention -- placement of ads served up for previous purchasers of a given product/similar products
- Have a tier for post.Hot items for instance so marketers can develop campaigns.
- Increase discoverability of products.
- 360 view of product/zoom in functionality.
  - This is directly related to customer retention and acquisition as well as band trust. We want to make sure the user
- Post live events suchs as sales/seasonal/etc.
- Automate notifications for stale/hot products.
- Better Categorization.
- Implementation of user recommendations that include the user’s friends once they click on an item.
- Virtual tours on marketers physical location.

DIY Sellers

Assistance w posting ads.

Templatized ads.

Streamline measurements to evaluate success.

Reduce the need for customization.

Automate some generic performance dashboards and serve them up in an easy to digest dashboard.

	Goals	Signals/Triggers	Metrics
Happiness Seller can easily set up account. Post their products. Receive payment. Ship product and engage with purchasers
Engagement Streamline account set up/product placement. Automatic deletion of sold products Automated out-of-the-box performance dashboards that can also be customizable -- comes with a How to video/documentation for advanced customization. Notification to seller when something has sold. Could be attached with personalized notification to seller, your product is on its way. Embed some tips in admin portal based on metrics	Reduce no. of steps for account set-up Reduce need for seller to go back into account/remove product Increase Ability to easily understand metrics.	Lower acct. Abandonment. Increase in account maturation.	No. of active users on marketplace per month No. of products posted. No. of clicks on products. No. of products shared. No of likes on products. No. of conversations between buyers/sellers
Adoption Geo-target customer segmentations. Better end user navigation of products Better discoverability of relevant products to user. Ability to bookmark a product to purchase later. Ability to see friends who have purchased similar products/ other products from the save vendor. Better integration w/external channels. Introduction of some VR components to shopping experience.			No. of sold items. No. of sold iterms per category. No. of sold items/impressions. No. of clicked items per sold items. No. of abandoned carts.
Retention Create sticky purchases - ability to for the customer to opt-in to marketing. Customer referral program Introduction of digital contracts.			Return purchases. Referral purchases.
Task completion Easy account set up. Simple tools to post product Ability to replace/modify post. Easy ability to track orders.			How many clicks to post. How many clicks to sell. Time between purchase and shipment.

Prioritization

Project name	Reach	Impact	Confidence	Effort	RICE score
Adm metrics/reporting enhancements	200,000	6	100%	2	600000
Multimedia/VR enhancements	85,000	8	80%	6	136000
Peer-based recommendations	200,000	4	100%	2	400000
Transportation Logistics	200,000	8	50%	8	100000
Customer Referral program	100,000	3	100%	2	150000
Digital Contracts	85,000	5	80%	4	85000
Multi-channel integration (on marketers website/Instagram/What's app	150,000	6	100%	2	450000

Threshold

So marketplace must have solid admin reporting enhancement to better monitor their efforts/products/streamline

It must have peer-based recommendations.

It must have multi-channel integration.

Performance features

Simple account set up process.

Simplified check out process.

Digital contracts?

Excitement features.

VR or Shipping assistance

In summary, I would let digital contracts go. It’s impact is lower, it’s effort is fairly high. And it may not be important now. But if you start to see performance issues -- i.e., low adoption/retention among consumers, you may want to revisit. Anecdotally, at least, I know there are some painpoints here especially as it relates certain purchases -- perhaps more relevant with Facebook ads as opposed to marketplace.
All of the low effort items are necessary. But will it really drive acquisition and put FB in a better position among its competitors?
For instance, Shopify does offer some shipping assistance expecially for dropshippers. If we want to really compete in this space, we are likely going to have to compete with that.
We have the advantage of being embedded. Meaning people spend a lot of time within the portal, shopping w/i portal seems like a natural transition. But there is really little pain of switching to a new tab like Amazon for browsing for products as it is more of a mature product and handles on transportation logistics.
Another excitement feature, fairly high effort. But does have what I think is the wow factor is extended reality

Lokesh Kumar R · Answer 2 · 2021-07-11T19:38:32+0000

Clarification:

Is there any other goal apart from focussing on Monetization? No. Marketplace has been there for quite sometime and has been performing well. So, as a next step we are planning at monetizing Marketplace.

Are we focussing on a particular User Type or Location? No, we are not limited to a particular location. It is upto you to choose a particular user or not.

With the above clarity, I would like to procced on to answering the question.

The way I would like to go about it is by,

Understanding the Product/ Feature
List the strategic Choices we have
Evaluate with reasonable Factors
Summary

Background:

Facebook is a product that aims at Bringing people of the world together to form more meaningful connections and make the world more accessible and smaller.

Marketplace is one part of FB that alligns with the above goal and fuctions for a subset of the World Communtiy- Buyers and Sellers. So, far a user can list a product of theirs in the Marketplace and interested buyers can text them, have a bargain and carry on with the transaction if they want. FB in no way has a way of monetization in this process. So, in short the platform cononects prospective buyers and sellers. It in no way helps in the logistics/ planning. OLX is one major competitor to this product.

The major segments of users are

Buyers
- Buyers who buy to resell
- Buyerrs whobuy for their use
Sellers
- Sellers who do this as a profession
- Sellers who do this to get rid of something in their home and buy a replacement of that.

Strategic Propositions:

Following the usual trend of monetizing through ads in this segment- This is simply using the data of customers searches and interest in different products and thus can show ads personalized to them about other substitutes for the same product.
Creating a Subscription model- This is applicable for sellers. We can create a subscription price for the sellers who post more than two active lisitng in a month. Adding to this, they can be given few premium options like giving higher priority to their listing as search results for x days.
Taking a cut from the transaction- This is applicable for both sellers and buyers. FB can take a cut from the transaction of the buyer and seller as a service charge of helping them connect with each other and sort their needs.

Idea	Pros	Cons
Ads	Facebook as a company is highly experienced in this way of monetization.	No matter how accurate is the personalization, ads are always a friction point. Moreover on showing ads to buyers at the same section where they are checking out the istings of sellers will have a negative impact on the conversion of the listings into completed transactions. The more the impact the lesser will be our listings rate.
Subscriptions	Facebook will have a steady income through this mode every month. As this is only targeted on active sellers and urgent sellers, they might not find it a difficult to pay an amount when they list more than one listing. One important pros is that, this is so common to users nowadays, that they will not feel doubtful about this scheme	The sellers on paying amount might expect a faster rate of conversion than the usual. Thus, we nned to work on the algorithms in search results especially for this and make sure that the Sellers get things done ASAP so that they come back to us. The seller might also feel bad as not every sellers are charged.
Cut from everyone	This mode is common to every user. So none will be feeling in a negative way	Since the transaction is not gonna happen through FB, it is highly dificult to take a cut from the buyers. While Sellers on removing the listing can be charged a cut. Even then since the transaction didn't happen through FB, it will be difficult to charge the right slab of cut to the people.

Due to above reasons, I would like to go with Subscription based model to monetize FB Marketplace.