How Facebook’s Calibra Will Impact Your Marketing
Facebook recently unveiled plans to launch a subsidiary in 2020 called Calibra, which will carry a digital wallet that will be offered as a standalone app, and which will also be embedded into WhatsApp and Messenger. The digital wallet will give global users the capability of making financial transactions using Libra, which is a newly formed currency based on block chain technology.
The Libra currency will be supported by Facebook, as well as a number of leading technological and venture capital organizations, for instance PayPal, MasterCard, and Uber. The Libra Association will be responsible for governing the currency, as well as promoting its adoption in countries around the world. Each of the founding members involved in the company, including Facebook, will be entitled to just one vote on any issues involving governance.
Although still in the very early stages of preparing Libra for launch, Facebook is already addressing privacy concerns that potential users might have. It has declared that it will share no user account information, and no financial information with any third party, unless the user explicitly consents to it. Facebook has also announced that Calibra’s user data will not be used on the Facebook platform itself for ad targeting. However, there will still be some implications for advertisers about Calibra.
More ad business with Calibra
Despite the fact that Calibra data will not be used for ad targeting, Facebook fully anticipates that moving into the cryptocurrency market will trigger an increase in ad revenue. The expected rise in commerce is likely to have a ripple effect with small businesses, which would presumably sell more on and off platform, resulting in those small businesses purchasing more ads on Facebook.
It’s no exaggeration to think that the Libra project will have the potential for creating a shopping ecosystem within Facebook’s broad family of apps, which will have the potential to become a giant. It is anticipated that businesses will have the capability of buying and selling products without the necessity of using other vendors’ digital payment systems. For those brands which use the Facebook platform, they would have the option of leveraging Facebook’s cryptocurrency to provide for an easier method of payment.
Global e-commerce opportunities
A good many marketer are already closely observing the cross-border payment capabilities which will be provided by Calibra. One CEO of a digital marketing agency has said that this amounts to a mechanism which will bring Facebook into the e-commerce arena for developing countries, where stable currencies do not yet exist.
This could in effect, become a huge opportunity for advertisers on e-commerce platforms to target global consumers, while still increasing the time spent on all the apps in the Facebook family. According to paid social media strategy strategist Josh Thompson, this new digital wallet will give more than 1 billion people who currently lack bank accounts, the opportunity to make online purchases.
The success of driving global e-commerce within Facebook apps via Calibra is completely dependent upon the overall success of the cryptocurrency it is founded upon. There are a number of other barriers which Facebook has to overcome as well, for instance customer trust issues, data privacy issues, uncertainty about regulations, the absence of China among its supporters, and competition from other mature technologies.
Even if all these challenges can be handled, it won’t be a fast process, but is almost certain to become a long-term, long-running project. This is one reason why investors and advertising brands need to be seriously cautious about embracing the new digital wallet. Supporters would be well advised to avoid overestimating benefits achieved by the new digital wallet, as well as to be prepared for even more problems which may crop up.
Opponents of cryptocurrency
It’s clear that Facebook’s underlying goal with this initiative is to create a way for users globally to engage with brands, and to make purchases from them regardless of where they live. If this all comes off as planned, it could have a dramatic impact on Facebook’s existing business model, and it could solidify its position as the world’s most dominant social platform.
However, don’t expect it to be smooth sailing in the months leading up to the launching of Calibra. Almost as soon as Facebook announced the launching of the project, Congressmen contacted the social media platform in an effort to halt its plans for the cryptocurrency. It also requested that Facebook executives give testimony before Congress regarding security concerns, and about data privacy surrounding the plans to launch a new digital currency.
There are even more headaches in store for the project, since India has also proposed a law which bans cryptocurrency and proposes a 10-year jail sentence on anyone dealing with it. This is a very significant development, considering the fact that India is the biggest market for Facebook on the globe, and if the bill is passed, it could represent a major setback. Facebook does not plan to launch Libra in those countries where it has no current presence, for instance in Iran, North Korea, and China. The Libra blockchain may be global, but only custodial wallet providers will have the capability of deciding where they will operate.
What if it’s successful?
If the Libra cryptocurrency were to be successful, marketers will probably line up in droves to take advantage of the increased e-commerce and customer experience potential that it would enable. This new digital wallet will have the effect of keeping Facebook users within its platforms, e.g. Facebook, Instagram, WhatsApp, while also boosting conversion rates for advertisers of e-commerce.
It is to be expected that consumers would be using Libra coins during the checkout process, and that would provide for one integrated seamless experience. Currently, most websites have a relatively poor user experience, and are not really optimized for ideal mobile usage. Facebook’s network of integrated apps could easily become the most powerful and most advanced user experience online, and that would leave Facebook in a position even more dominant than the one it currently enjoys.
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