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Facebook’s latest acquisition dives into backend of social media marketing

(SOCIAL MEDIA) This $1 billion dollar acquisition of a CRM shows Facebook diving into the back end of social media for the first time.

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Woman checking social media on her phone on a balcony overlooking city traffic.

A social media giant is stepping into the Customer Relationship Management Realm.

On November 30, Facebook announced that it had acquired the CRM platform Kustomer for a deal valued at a whopping $1 billion. Founded in 2015, Kustomer boasts to be a customer service focused platform that is made to support high volume transactions. In a statement on the company’s website, Kustomer CEO Brad Birnbaum believes that the platform’s complementary relationship with Facebook will create a mutually beneficial relationship.

“With our complementary capabilities, we will be able to help more people benefit from customer service that is faster, richer and available whenever and however they need it–via phone, email, text, web chat or messaging.” Birnbaum said, “In particular, we look forward to enhancing the messaging experience which is one of the fastest-growing ways for people and businesses to engage.”

The move may seem unusual at first. In the past, Facebook has opted to purchase customer-facing applications and software, instead of back-end applications. Such purchases include Spanish cloud video gaming company PlayGiga in 2019, and popular gif catalog service Giphy this past May. These applications are often used to build out new features for Facebook’s core platform and users.

Considering Facebook makes around 99% of its revenue through advertising, however, the acquisition makes sense. Through Kustomer, Facebook hopes to provide better support to companies wishing to use the social media conglomerate as a channel for attracting customers. By providing end-to-end support for these businesses, Facebook hopes to drive revenue and become a core channel used to sell products and services.

Only time will tell if the investment in a CRM platform can help drive companies to use Facebook as a primary sales channel. Ultimately, the end goal for Facebook is to increase its advertising revenue, and one could expect the organization to integrate Kustomer with popular existing applications like Instagram and Whatsapp.

The acquisition will have to pass a regulatory review, however, before Kustomer can officially become part of the Facebook family. While that is likely to go off without a hitch, Facebook needs to handle some bigger regulation issues before it can take advantage of its new CRM software.

Patrick Auger is a management consultant and entrepreneur who resides in Austin, Texas. He has a Bachelor of Arts in Business Management from Western Illinois University, and is the Founder and Principal Consultant at Auger Consulting Group, LLC. When he's not writing for The American Genius, he's writing about the business of Mixed Martial Arts for The Body Lock or learning how to cook, one burnt recipe at a time.

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2 Comments

2 Comments

  1. Thomas Johnson

    December 22, 2020 at 9:31 am

    Great. Now all your off Facebook customer data will get vacuumed up to be sold to your competitors. They will know what offers have been sent, what contracts are being negotiated and when. I’m sure Facebook will assure some kind of firewall which when discovered to have been breached by the
    ‘Customer experience team” will be apologized as the victim loses their customer list.

  2. Pingback: Apple takes a bite out of Facebook's tracking policies

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Social Media

Instagram teases “take a break” feature: Is it true or another PR stunt?

(SOCIAL MEDIA) In an attempt to rectify their reputation, Instagram teases the newest safety feature – “take a break” – to nudge teens from harmful content.

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Upside down photo of man holding iphone case saying "social media seriously harms your mental health."

The knowledge that social media – especially in excess – can be harsh on mental health is not something learned from the recent Facebook whistleblower; we’ve known for a long time and so has Facebook and Instagram.

And now to pretend that they care about such harshness, Instagram has introduced a “take a break” feature (I’m both rolling my eyes and singing the “Hamilton” song of the same name). The announcement of the feature came from Facebook’s vice president, Nick Clegg, during a CNN address a week after the whistleblower drama came to the forefront. Clegg said,

“We’re going to introduce something which I think will make a considerable difference, which is where our systems see that a teenager is looking at the same content over and over again, and it’s content which may not be conducive to their well being, we will nudge them to look at other content” 

Instagram app on Apple app store.

He said the social media company plans to introduce a feature “called ‘take a break,’ where we will be prompting teens to just simply take a break from using Instagram.” This is in addition to pausing plans for an Instagram Kids platform and giving parents optional controls to supervise teens.

There is currently no information available on a timeline, which may further the point that this is just a PR tactic to deflect from the issue at hand – that they had data proving the harms of social media and chose to bury the information. Last month, Instagram posted a blog about the Instagram Kids pause and information on children and teens using the internet.

It could be argued that the “nudge to look at other content” is simply another in a series of distractions that somehow keeps people using social media in copious amounts. The fact that there is hardly any information on the feature is suspicious and hardly a bandage for a bullet wound.

If it even ever comes to fruition, it will likely be one of Facebook’s many trials and errors. Based on last year’s documentary shocker “The Social Dilemma,” it is clear that social media users are simply dollar signs in the eyes of those at the top.

Instagram mobile login page.

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Why Trump’s lawsuit against social media still matters

(SOCIAL MEDIA) Former President Trump snagged headlines for suing every large social media platform, and it has gone quiet, but it still deeply matters.

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trump sues social media

It was splashed across headlines everywhere in July: Former President Trump filed a lawsuit against social media platforms that he claims unrightfully banned him during and after the fallout of the January 6th capitol riots. The headlines ran for about a week or so and then fell off the radar as other, fresher, just-as-juicy news headlines captured the media’s eye.

Many of us were left wondering what that was all about and if anything ever became of it. For even more of us, it probably passed out of our minds completely. Lack of public awareness for these things is common after the initial media blitz fades.

Lawsuits like these in the US can take months, if not years between newsworthy milestones. The most recent news I could find as of this publishing is from August 24, 2021, on Yahoo! News from the Washington Examiner discussing the Trump camp’s request for a preliminary injunction in the lawsuit.

This particular suit shouldn’t be left to fade from memory in the shadows though, and here’s why:

In the past few years, world powers have been reigning in regulations on social media and internet commerce. The US is actually a little behind the curve. Trump may have unwittingly given us a source of momentum to get with the times.

In the European Union, they have the General Data Protection Regulation (GDPR), widely acknowledged to be one of the toughest and most thorough privacy laws in the world, a bold title. China just passed its own pair of laws in the past four months: The Data Security Law, which took effect on Sept. 1, and The Personal Information Law, set to take effect November 1st. The pair is poised to give the GDPR a run for its money for that title.

Meanwhile, in the US, Congress has been occupied with other things and, while there are five bills that took aim at tech monopoly currently on the table and a few CEOs had to answer some questions, little actual movement or progress has been made on making similar privacy protections a thing in the United States.

Trump’s lawsuit, while labeled by many as a toothless public relations move, may actually create momentum needed to push regulation of tech and social media forward in the US. The merits of the case are weak and ultimately the legislation that would give it teeth doesn’t exist yet.

You can’t hold tech companies accountable to a standard that doesn’t properly exist in law.

However, high profile attention and someone willing to continue to make noise and bring attention back to the subject, one of Trump’s strongest talents, could be “just what the doctor ordered” to inspire Congress to make internet user rights and data privacy a priority in the US, finally.

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Even solopreneurs are doing live commerce online – it’s not just QVC’s game anymore

(SOCIAL MEDIA) When you think of watching a show and buying things in real time, it invokes thoughts of QVC, but social media video has changed all that.

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live commerce

After the year everyone has had, one wouldn’t be remiss in thinking that humanity wants a break from live streaming. They would, however, be wrong: Live online commerce – a method of conversion first normalized in China – is the next evolution of the ubiquitous e-commerce experience, which means it’s something you’ll want on your radar.

Chinese company, Alibaba first live streamed on an e-commerce site in 2016, allowing buyers to watch, interact with, and buy from sellers from the comfort of their homes. In 2020, that same strategy netted Alibaba $7.5 billion in presale revenue – and it only took 30 minutes, according to McKinsey Digital.

But, though western audiences have proven a desire to be just as involved with sellers during the buying process, live commerce hasn’t taken off here the way it has elsewhere. If e-commerce merchants want to maximize their returns in the next few years, that needs to change.

McKinsey Digital points out a couple of different benefits for organizations using live commerce, the main one being an influx in traffic. Live streaming events break the buying experience mold, and consumers love being surprised. You can expect that prospective buyers who wouldn’t necessarily visit your store under normal circumstances would find value in attending a live event.

Live events also keep people on your site for longer, resulting in richer conversion opportunities.

The sense of urgency inherent in in-person shopping doesn’t always translate to online markets, but having a stream showing decreasing inventory or limited-availability items being sold inspires people to act expeditiously rather than sitting on a loaded cart–something that can kill an e-commerce conversion as quickly as it starts one.

There are a ton of different ways to incorporate live events into your e-commerce campaigns. Virtual auctions are popular, as are markets in which individual sellers take buyers through inventory. However, the live event could be tangentially related–or even just something impressive running in parallel with the sale–and still bring in a swell of revenue.

Screen fatigue is real, and there isn’t a true substitute for a brick-and-mortar experience when done correctly. But if you have an e-commerce shop that isn’t utilizing some form of live entertainment–even just to bring in new buyers–you’re going to want to try this strategy soon.

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