How Facebook's Payment Product Can Help Advertisers

Thursday, reports emerged that Facebook was testing a new payment product, allowing users to purchase items within the website or app only with a Facebook ID and password, that analysts described to All Things D as "a dead on competitor of PayPal."

But Josh Constine at Tech Crunch believes that the new product can actually work in conjunction with PayPal its real goal is to show brands their ads' ROI.

Constine writes:

Rather than collecting fees, Facebook’s payments test will give it data about whether your ad clicks lead to revenue for advertisers. Say you got that e-commerce app through a Facebook ad whose click cost the app $0.25. If you then make a $20 purchase using the Facebook info fill-in option, Facebook can then report back to the advertiser that their ad buy earned them a return on investment.

Facebook is consistently trying to make the site more retailer-friendly. It tested a "Want" button, which has a stronger purchase call to action than a "Like" button, and brands have also experimented with Facebook stores.

This would be an interesting way to both drive Facebook-based shopping and prove ads' worth, proving to brands that the social network really is worth investing ad dollars in