By John Stewart
While social networks like Facebook, Twitter, and Pinterest develop so-called buy buttons for the ads they sell, third-party developers are looking at extending the same technology across not only social networks but apps, mobile sites, and even emails.
One of the most aggressive of these developers, Santa Clara, Calif.-based XpressBuy Inc., has recruited 450 retailers since its launch two years ago and projects it will have 10,000 signed up by the end of 2015. Furthering that ambition is a deal it announced on Wednesday with Austin, Texas-based PocketMath, one of the largest self-serve, real-time mobile ad networks in the country, to make its buy buttons available to PocketMath advertisers.
PocketMath claims to serve up more than 20 billion ad impressions on at least 4 million outlets each day. “Now we’re ready for prime time,” Murali Subbarao, chief executive and founder of XpressBuy, tells Digital Transactions News.
Buy buttons are taking on urgency now that major social networks, as well as Google Inc., are testing or at least working on them. The buttons, which let consumers purchase an advertised product on the spot with as few clicks as possible and without leaving the host medium, are seen as a way to induce retailers to spend more on ads by generating buyers and, equally important, buyer data.
But now XpressBuy hopes to take the idea further by embedding its “Buy Now” buttons in ads in just about any mobile or desktop context, including the social networks themselves if that’s where client advertisers want to go. Indeed, Subarrao claims his technology can increase average conversion rates by a factor of six.
That may seem high, but the idea is that buy buttons can capture purchases at the instant the consumer is attracted to the product and in the mood to buy, before distractions set in. “The claims are completely believable,” says Yory Wurmser, retail/e-commerce analyst at New York City-based researcher eMarketer Inc. “The more you can reduce the friction, the more the boost to conversion rates.” The firm forecasts that advertisers will spend slightly more than $100 billion in 2016 for ads on smart phones and tablets.
With XpressBuy, consumers can review the full panoply of product photos and information, including colors and sizes, when they click the button. Once the consumer has made her choice, the technology also links with digital wallets—though not yet Apple Pay—to garner payment credentials.
While the buyer never leaves the host medium, XpressBuy connects via application programming interfaces with the merchant’s site to pull in product information, check inventory, and, if need be, display the retailer’s checkout page for payment. “If [the product] is out of stock, we show it’s no longer available,” says Subbarao. “We’re able to post that data in real time.”
Retailers that activate XpressBuy, he adds, can then “use it anywhere.” Integrating the APIs takes about an hour, and advertisers can have the system running in as little as a day, Subbarao estimates.
XpressBuy relies in part on technology developed at a prior company called Billeothat Subbarao founded in 2006. Billeo, which focused on card-based online bill payment, early on developed software that automatically filled in passwords and card credentials and stored payment-confirmation pages for users. “XpressBuy is a spinoff of that platform,” Subbarao says.
The company charges advertisers anywhere from 2% to 5% on each conversion as well as a separate fee for data provided on each transaction. In partnerships with ad platforms like PocketMath, XpressBuy bundles its fee with that of the platform.
That could amount to more than double the transaction fee online merchants already pay for card acceptance, but Subbarao argues XpressBuy offers advantages advertisers won’t get from buy buttons offered by social networks. With XpressBuy, advertisers rather than the social network remain the merchant of record on each transaction, he points out. The company also is “agnostic” as to wallets, he says, whereas social networks or search engines might offer a proprietary wallet that customers may feel reluctant to use. And, he stresses, XpressBuy’s buy buttons, once created, can be used across multiple mobile and online media, not just within a particular social network. Advertisers “get a lower cost per sales and a higher [return on investment],” he argues.
Some payments experts like this proposition. Buy buttons “are the wave of the future in terms of closing the loop between advertising and buying,” notes Rick Oglesby, a senior analyst with Centennial, Colo.-based consultancy Double Diamond Group.
Companies like XpressBuy, he adds, are in a strong position. “The downside [with XpressBuy] for the retailer is, you’d prefer the consumer buy on your site with your own consumer enrollment,” he says. “That said, you’re not going to give up sales for that.”
Equally, social networks would prefer that consumers use their proprietary buy buttons. “But they’re not going to turn away any advertisers,” says Oglesby.