By: Tom Murray | Managing Director, Agency
Facebook has obviously been in the news in all of 2018 with data scandal after data scandal. In order to solve for this, they need to start relying less on user data that is self-reported, and instead focus on real third party data that they can control. This may come as a shock, since Facebook got rid of partner categories this year, which gave marketers less targeting options at their disposal, specifically in the offline data realm.
This leads me to Square, Jack Dorsey’s other company that he runs besides Twitter. Square, which went public in November 2015, is a point-of-sales system that enables small businesses to efficiently process orders, manage payroll and taxes, as well as employee time tracking. As a small business owner myself, we’ve used Square’s software and hardware for six years now. Their software is easy to use, always updating, and coupled with great hardware that makes for a sleek counter design. Their analytics platform is robust, allowing me to break down sales by items, categories, etc, over any time period. It is estimated that over 2 million sellers currently use Square, and having used the platform, I can see why.
Facebook has tried to get into the retail game in the past by releasing Facebook beacons. This tiny device was supposed to allow users to get tips, reviews and coupons when they walk into a store via Bluetooth technology. The main goal on Facebook’s end was to be able to know that a person walked into a store, thereby increasing its accuracy of measurement for in-store sales tracking. This ended up not being the silver bullet that it seemed like it would be since the beacon never caught on. That is where Square comes in.
With over 2 million sellers and likely over $75 billion in sales transacted in 2018 (and growing), this is a treasure trove of in-store sales data that Facebook would be wise to acquire. Not only would it be able to help understand what people are buying offline (which still make up 80-85% of all retail transactions), but it would also be able to place beacons inside the point of sale system itself. Between being able to increase in-store sales tracking measurement accuracy and being able to segment users for better targeting, Square would be a no brainer to try to acquire. With a market cap of $22B, it would be Facebook’s biggest acquisition yet. However, with nearly $50B in cash on hand, Facebook would be able to purchase Square with relative ease.