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First: we wholeheartedly agree with the ideas underlying Facebook’s big announcements today. People want to be able to interact with their friends on sites all across the web, not just within Facebook.  And sites don’t all want to have to become Facebook apps to support this.

TurnTo has been working to enable contextual delivery of social networks on ecommerce sites since our founding in 2007.  And we’ve proved that the benefits for both shoppers and merchants are significant.  So we applaud Facebook, appreciate the validation that their heading in this direction provides, and are already hard at work incorporating their new API.

We also think that to derive maximum advantage from an Onsite Social strategy, ecommerce sites should not rely exclusively on the new Like-based functions that Facebook is providing, but should – more importantly – leverage their purchase transaction data.  Here’s why:

It’s useful for your shoppers to see which of their friends know about your store and the products you sell.  Facebook’s API takes care of the problem of determining who you shoppers’ friends are.  But how do you determine what those friends know about?  Facebook’s new Like button lets shoppers register a connection to items on your store that they, well, like.  But Like does not equal know-about.  And many people who buy from you – and therefore REALLY know about you and your products, will never click Like.  In other words, there will be loads of false positives and false negatives.

If you were a content site, this might be the best you can do.  But as a commerce site, you have a unique asset: the purchase transaction.  You already have a massive set of people who really do know about you and your products, and the list grows every day.  They’re called: customers.

So go ahead and use the new Facebook plugins.  But also, and more importantly, leverage your transactional data to socialize the shopping experience on your site.  That’s where the big opportunity lies.

Paul Dunay, The Global Managing Director for Services and Social Media at Avaya, gave this description of social commerce in an interview in eMarketer:

Social commerce is working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions. Social commerce can be anything from a buying suggestion or recommendation—perhaps a tweet from a Dell outlet saying, “Hey, we have a special on this”—to something like Facebook Connect. Facebook Connect would allow you to go to a Website like Dell.com and authenticate yourself using your Facebook profile, allow your identity to be known and access your friends so you could spark up a chat. So I could say, “Hey, Jeff, I’m looking at this new fancy laptop or this netbook. I heard you bought something. Would you recommend this to me?” So you could almost take your friends shopping with you. That is the potential with this example.

Hey Paul, come look at the sites using TurnTo.  Your vision is alive today!

Business Week just published a piece on the potential for Facebook in online shopping.  They focus on the role of Facebook Connect in enabling shoppers to post questions to their Facebook network before making a purchase.

It makes sense that this is the primary way Facebook Connect has been used so far in online shopping, since it’s the easiest to implement.  But it’s just scratching the surface.  The real potential is in bringing the social network to the shopping site (not the other way around).

For one thing, many people are hesitant to blast questions that they know are only relevant to a small portion of their network out to everyone.  No one wants to be a spammer.

Also, most shoppers don’t think of Facebook as the place to go when researching a purchase.  The primary research destinations are merchant sites and content sites that address the product category.

Combine those two considerations and what you get is a requirement for a system that runs on the merchant (or content) site and tells a shopper which particular people can help them with their purchase decision, so only relevant people receive the shopper’s questions.

If you sell online and this makes sense to you, check out the way TurnTo’s merchant partners are using the TurnTo system to achieve exactly this.  www.turnto.com/partnerlist.

Here’s the full article: http://bit.ly/14Wl0n

And here’s what they have to say about us: New York-based TurnTo Networks Inc., for example, which was launched in September, helps retailers link their customer accounts with social-networking accounts and email accounts using Facebook Connect and other tools. TurnTo charges retailers a percentage of the revenue from sales attributed to the system.

Tea retailer Teavana Corp. is a TurnTo client. Jay Allen, Teavana’s vice president of e-commerce, says the conversion rate—a measure of how many shoppers make purchases—for people who use the application is 20% higher than the rate for others, and their average orders are slightly more expensive.

TurnTo founder George Eberstadt says preliminary data for the company’s first 20 clients show that using TurnTo tends to increase conversion rates 20% to 50% and builds traffic to retailers’ sites. Some 700,000 new users, for instance, have come to computer retailer CompSource Inc.’s site through its TurnTo application since July. TurnTo is “a lot better than average” in terms of price per new customer compared with pay-per-click advertising, says Dean Bellone, CompSource’s president.

Here’s what Citysearch CEO Jay Herratti told the New York Times last week regarding their recent trial of Facebook Connect:

In the four months the site [Citysearch] has been testing Facebook Connect, 94 percent of reviewers have published their reviews to Facebook, where an average of 40 people see them and 70 percent click back to Citysearch. That has translated into new members: daily registrations on Citysearch have tripled.

If you are an on-line merchant, don’t leave all the Facebook Connect fun to the publishers!  With tools like TurnTo, a Facebook Connect implementation is far easier and quicker than you might imagine.  And results like those from Citysearch show the benefits can be dramatic.

Here’s the TurnTo presentation from the OnMedia conference today.  This talk focuses on the whole idea of “Trusted References”.  The TurnTo part goes from roughly minute 1 to minute 10.  (I’m hoping the conference will provide a version of this without the side-bar.  I’ll upgrade if we get one…)

I just got back from the Social Networking Conference in Miami.  Here’s the presentation I gave, titled “Ecommerce Meets Social Networks: A Different Approach to Driving Online Referrals”.  The usual caveats about slides-without-accompanying-commentary apply.

Peter Kim asked a handful of thought leaders in the social media space to give their predictions for the top trends of ’09.  Here are a couple related to social commerce:

Charlene Li: Shopping Goes Social (also reprinted on her own blog)

After a devastating holiday season, retailers will eagerly seek a way to improve results other than driving demand with deeper discounts. One option they will investigate will be how to insert people and social connections into the buying process, illuminating and influencing for the first time the Black Hole Of Consideration. As they lick their wounds in the first half of 2009, retailers will watch from the sidelines as media companies implement open social technologies like Facebook Connect and the Open Social Platform. But as the holiday season launches early after Labor Day, shoppers will find options to see what friends are recommending, buying and rating integrated into the shopping experience.

Jeremiah Owyang: eCommerce Goes Social

The recession will force revenue results out of social technologies –marketing must prove its worth to actually changing the bottom line.  Although customer reviews are nothing new on popular eCommerce sites like eBay and Amazon, in most cases, consumers use the critiques from people they don’t know.  Now with connective technologies like Facebook Connect, Google FriendConnect, and OpenID, consumers will now be able to see reviews, experiences, and critiques from people they actually know and trust.  As a result, expect to see eCommerce widgets and applications appear in popular social networks, as well as when visiting existing eCommerce sites the ability to login with your Facebook or Google identity.  As an example, next time I’m shopping for a laptop, not only will I see reviews from editors and consumers, I will now know which one of my friends uses an Apple computer, and what they think of it.