Facebook disclosed in its filing Wednesday that 15 million of its 845 million users paid for virtual goods on the platform in 2011.
The social networking giant raked in $557 million or about 15 percent of total revenue in 2011 from virtual goods payments and other fees. That is about 1.8 percent of Facebook’s users bringing in 15 percent of the company’s revenue.
Facebook Credits was launched in May 2009, and in July 2011, Facebook made Credits mandatory for social games developers to process payments through Facebook Credits.
The company has been trying a number of promotions such as “Buy with friends” and “Frictionless Credits”. It is also currently running a buy $1, get $4 free offer to drive sales using Credits.
Yesterday it announced an incentive program for developers who drive sales using Credits among European users. Developers who drive more than US$100,000 in sale to European customers in a given quarter will be rewarded with an additional 3 percent related to those sales. The incentive program covers sales from January 1 to March 31. Facebook added that it will evaluate the program at its conclusion and may or may not renew it.
Facebook takes a 30 percent cut of all revenue earned through Facebook Credits. It can be a goldmine for the company if it can get more users to make transactions using Credits.
What is stopping Facebook users from buying much on Facebook? Security concerns.
The same type of concerns people had when online stores first came up. And even though social commerce is expected to reach $30 billion within five years, people are still hesitant.
Harris Interactive did a survey on behalf of Dititas last month, polling 2,630 U.S. adults aged 18 years and older, of which 2,247 were social media users.
Some highlights of the survey infographic include:
- 55 percent of social media users aren’t comfortable giving credit card information via social media, While the other 45 percent are at least somewhat comfortable doing so, especially men within the age group of 18-54 and having an income of $35,000 or more.
- 20 percent of social media users agree that they would purchase products or services from their favorite brands on a social media site.
- 34 percent of social media users agree that they’d be more likely to share info about a purchase they made on a social media site with friends than one made on a traditional e-commerce site.
- 75 percent of social media users agree that they would be more likely to purchase a product or service that a friend openly endorses via social media, than ones that were “liked” or “followed”
- 74 percent of social media users indicate that they would rather use an alternative payment method than use virtual currency, such as Bitcoin or Facebook Credits to pay for a purchase made on a social media site.
