This acquisition of both the team and technology follows our predictions that expensive Facebook Page management services are becoming commodified by companies offering free products, so the Page management industry needs to explore new revenue streams by expanding into ad buying or ecommerce through partnerships and acquisitions.
Buddy Media got an early start in the industry, helping brands market themselves on Facebook since the Platform opened in late 2007. At time, there were few powerful Page management tools, let alone free ones, and brands didn’t have any experience and therefore needed helped. Since then, Buddy Media has signed some of the world’s most prominent brands, grown to over 170 employees, and raised $38.3 million, including a massive $23 million Series C round in October 2010.
Now, though, solid free tools and Page tab app suites are proliferating and brands are gaining the experience necessary to require less hand-holding with day-to-day Facebook Page operation. More brands are still shifting marketing focus towards Facebook, but commodification means the Page management industry’s largest companies will eventually need to seek additional revenue streams if they want to keep growing, or even avoid shrinking.
The most obvious expansion area is facilitating Facebook ad purchases by their clients — a lucrative business where they can license tools or charge a percent of the growing Facebook ad spend of big brands. The other is ecommerce, where they can also license Facebook ecommerce storefront and analytics solutions.This appears to be just what Buddy Media plans to do with Spinback, its first full-fledged acquisition.
Spinback’s two main offerings are EasyShare, a product and purchase social sharing widget, and EasyTrack, which provides analytics on this sharing and the sales it generates. These technologies will allow Buddy Media to inform clients about what social channels are driving sales, what products are being shared most frequently and creating the most revenue, and who are the most active and influential customers and customer segments.
Spinback has signed over 20 retailers as clients since it launched in October 2011, with clients seeing an average increase in incremental revenue of $2.10 per Facebook wall post, and a conversion rate of 10.9% for Facebook shares leading to purchases. The five-person company’s founding CTO, Paul Boutin, was formerly the founder and CTO of Payvment, the most popular Facebook ecommerce storefront application.
The acquisition will allow Buddy Media to attract more retail and ecommerce clients, and offer a wider range of services to Spinback’s and its existing clients. It will also protect it from commodification as brands mature from establishing a Facebook presence to attaining a healthy return on investment in social.
via insidefacebook
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