This week the social gift certificate giving service Wrapp launched in the U.S. after a successful pilot run in Sweden. The service puts a new spin on the old Facebook ad system. Rather than paying for banners and links, brands give away free gift cards to users to give to their friends online - essentially allowing users to circulate their offers for them via word of mouth. In addition, the brands only compensate Wrapp when a gift certificate is redeemed, meaning that advertisers are only paying for impressions that actually result in a sale for them. Wrapp even allows you to add money to the gift card if you'd like to give them something more substantial and mutual friends may also contribute to the gift via Facebook. Currently, the application has launched with 10 brands including Gap, WeSC, H&M and Sephora and you can redeem your gift card at most retailers simply by presenting the barcode made available via the phone app upon check out.
Wrapp claims to tailor the gift certificates you can offer to friends based on their demographics and location. It's unclear how true that is as I found the suggestion of sending my teenage sister a one month subscription to the Wall Street Journal a little odd when I went hands on with their Android app (iPhone also available). As you have to allow Wrapp access to your Facebook data, it will probably do a better job at targeting when it has permissions for both profiles. The free gift certificates essentially amount to a small discount - $5 here or $10 there - and cannot be combined to build larger pools of cash. When you think about it, Wrapp is an evolution in coupon distribution. While Wrapp still utilizes demographic and geolocation information to target its audience, integrating social giving adds a layer of personalization to the marketing process as your friends and family are bound to know what will appeal to you better than anyone else. Since going live in Sweden this past November, 165,000 people gifted 1.4 million certificates to the their Facebook friends. According to their website, Wrapp also has plans to expand their service to 13 other countries including Canada, Japan, Germany and France. If you'd like to know more about how it works, check out the video below.