Payvment, a social e-commerce platform, is launching a new Facebook Ad buying service today that integrates unique transaction-based data to provide more relevant targeting for brands and advertisers. Payvment is developing what CEO and founder Christian Taylor calls a “taste graph” by determining how people are interconnected around products and improving upon the efficacy od Facebook Ads based on the makeup of their social graph.
“We look at ourselves as a social commerce research and development company, trying to figure out the relationship between products and people,” Taylor told ClickZ in a phone interview.
The company developed a targeting algorithm that will analyze a seller’s inventory and determine which types of users are most likely to purchase those products based on proprietary transaction data that Payvment has collected from more than 40 million Facebook users to date.
Facebook’s social graph is not always the most efficient way for brands to facilitate discovery and actually sell products, Taylor said. Although many Facebook users have friends that number in the hundreds, if not thousands, “on a product discovery level, you really don’t have that much in common,” he said. Social commerce is about so much more than simply clicking a “like” button or using Facebook’s self-serve ad tool to select targeting parameters, he continued.
“For a small business, most of them don’t know the social makeup of who’s going to love their products… so it’s a real test, trial-and-error kind of product,” Taylor said. “That model doesn’t work and the reason why is essentially that funnel turns into nothing really quickly. Facebook Ads was the tool to get beyond your friends and family … but it was just not optimized on a product level and it wasn’t optimized for small businesses to do a campaign for $250,” for example.
Payvment recently surveyed its entire customer base of primarily small- to medium-sized businesses and found that 40 percent already use Facebook Ads and an additional 20 percent want to join in the action. However, most of those customers also complained about complications with Facebook Ads and an inability to target the most relevant audiences, according to Payvment.
The broken link in the social commerce chain lies in determining who makes purchases and what campaign strategies will drive more purchases, Taylor said. He also emphasized that Facebook does not have the same transaction-based data as Payvment because his company is providing an actual storefront platform, and is therefore more uniquely positioned at the product level.
Payvment powers more than 165,000 storefronts on Facebook today and accounts for a majority of all shopping on social networks (as high as 80 percent), based on its own estimates and information publicly shared by Facebook.