With Golden Data Will Facebook Push Local?

Earlier this year at the Borrell local conference Yellowbook executive Pat Marshall made the remarkable statement that the site was getting more traffic from Facebook than from Google. I never was able to get complete clarity there or unpack the remark to fully understand it and the underlying data. But it’s symbolic of the growing importance of Facebook in the local ecosystem.

Now with the advent of the Like button and Open Graph local publishers will race to integrate these tools. Indeed, they’ll make local sites more social and personal by showing friends’ activities and so on. They also provide a simple way for local businesses and the publishers to gain greater exposure to networks via Facebook. This was already true to varying degrees with Connect; the new tools merely amplify the effect.

The potential “dark side” of all this is the fact that all the data that emerges from all the Like button clicking will be in Facebook’s hands. Other third parties in the network will be able to access some of that data with permission but no single party in the “Open Graph” ecosystem being created will have the entire data set — except Facebook.

Facebook has given no indication that it will do anything like what I’m suggesting here, but let’s play out a scenario.

All the local publishers in North America and Europe implement Social Plug-ins, etc. Millions upon millions of businesses are “Liked.” That creates a master data set in the aggregate. Facebook will know:

  • The favorite sushi restaurants in every city
  • The favorite contractors
  • The favorite attorneys
  • The favorite  . . . in every category

They’ll know all these things in the aggregate and in terms of my network in particular. Each “Like” is a “vote” in the same way that each link is a “vote” in the SEO world. But a Like vote is much better than a link vote.

In a very short period of time Facebook will have a ton of valuable data. What will do with all this data (courtesy of all the local sites that will implement Social Plug-ins)?

It could do nothing in particular or it could build the single most effective local directory and search site that exists. This data will be more valuable than anything Google has or any individual local publisher-partner possesses. That includes Yelp, YPG or anyone else that joins the Open Graph and implements these new Facebook platform tools.

Now let’s think back to Google a few years ago.

Google was originally regarded mostly a source of SEO traffic to local sites. It had maps but it wasn’t considered the local competitor it is today. Over time Google continued to improve its local offering and started showing maps + local listings increasingly. It’s to the point now where local SEO is a very limited option. The need for alternative traffic is fueling the rise of CityGrid, the anti-Google.

The story could well be the same with Facebook, should the company decide that local information is important to its users and/or that it wants to make local search a bigger part of the Facebook experience.

One could also imagine a mobile app, “Facebook Likes,” that provides recommendations from my network and from Facebook users in the aggregate. The “coverage” on such an app would be unmatched because of the data that Facebook will be capturing — data that nobody else will have.

Just like SEO in the past local publishers probably cannot afford not to participate in the Open Graph program. For them the benefits are clear and immediate. But in the long term the benefits to Facebook could be far greater.

The question and uncertain thing is the degree to which Facebook wants to offer its own “local search” results or apps. No one at Facebook has given me any indication that they’re going to do something like this. It just popped into my head yesterday at the F8 event. And Facebook wouldn’t do anything for at least a year or two at the very earliest.

However given the goldmine of data that will be coming from the Like button it will be very tempting to do something at some point.

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33 Responses to “With Golden Data Will Facebook Push Local?”

  1. Will Scott Says:

    Greg,

    If you’re a search marketer and you look at the demographic data you’re a sucker if you’re not already thinking of Facebook as another local channel. As I’ve said many times, if Facebook were a country it would be the 3rd largest in the world (ahead of the US).

    And, months before the Borrel data Facebook folks I was talking to were already touting their higher number of page views.

    My big concern is that Google will see this as a threat to their ad revenue on the basis of the openness of their platform. In that I mean, Google represents what Perry Evans always called the 1st search. The place from which you start. It’s not the destination, or the 3rd search – a site which is already sticky and to which you go when you really need to *find* things – a la Yelp.

    In other words, does Google move more in the direction demonstrated by Places Pages? Do they do their best to keep you ON Google.com and therefore stop handing you off to the sites they index? I hope not.

    Clearly Google perceives a threat here but the horse may already have left the barn.

    Will

  2. Greg Sterling Says:

    Will:

    In the end it could wind up being Facebook vs. Google in local with everyone else relegated to the role of “agency” or data provider.

  3. Christian Sterner Says:

    Great post Greg.

    Will,

    One observation I have about your comments is that you are hoping Google won’t move further into the direction of sapping content producers’ value within the search experience.

    As a founder of WellcomeMat (the leading video publishing platform for real estate brands), I have to say that they have unquestionably made the decision to do this. Look no further than YouTube, the 2nd largest search engine with an entirely different-engagement centric-model.

    Everyone thinks they need to have their videos on YouTube, but rarely do people consider the fact that they are handing their expensive content to a company that has no intention (or should we say a lack of ability) to send traffic to their site.

    Their answer would be “but we allow video sites to publish video site maps,” but in reality, they lag HUGELY in indexing that content (maybe that’s a mistake they’re making? Maybe it’s a mistake and they just haven’t gotten around to fixing it?).

    All told….Google is simply trying to figure out how to encroach as much as possible on publishers without canabalizing adwords/ad sense.

  4. Christian Sterner Says:

    Greg….just saw your comment after submitting mine: I agree entirely. My team has been focused on Facebook as the biggest local play for a long time. Checkins are nothing…

    Just like the web, mobile is about engagement (who can get people to take out their phones and use their apps). Location just makes the messaging more targeted. Exciting stuff!

  5. Tim Cohn Says:

    With Facebook’s annual revenue per user- $1 Billion / 500 million users = $2.00 a year or $0.005 a day from each user, Facebook definitely has a lot of upside.

  6. Malcolm Lewis Says:

    Facebook definitely has the potential to become the preferred gateway for commercial search, a position that has made Google billions. And it’s not just local businesses. Imagine if Amazon and other shopping sites add the Like button for every product in the same way directories will add a Like button for every business. Soon FB knows what everyone likes in aggregate, and can filter based on social graph. Eg, What sushi places in seattle do my friends like? Or What digital cameras do my friends like?

    As part opf this, I suspect FB will need to broaden the definition of “friend” to encompass someone I don’t know personally but who’s opinion I trust in certain domains. Ie, move from the Friend model to the Twitter Follower model. Eg Roger Ebert is not my FB friend but I trust his movie recommendations. Roger might not accept my FB Friend request, but he would probably accept a twitter-like “Follower” request.

  7. Greg Sterling Says:

    Agree that Facebook’s opportunity is greater than local here. Shopping is an area that FB could “own” if it wanted to.

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  10. dennisyu Says:

    Google vs Facebook in local– we have bets on both horses as an agency, but lean towards Facebook! I am hoping that templated pages and templated ad campaigns on Facebook are not far away!

  11. Greg Sterling Says:

    I wouldn’t be surprised Dennis.

  12. Hiding Startup Says:

    These companies are likely very foolish to trade their data (and being the location of high-revenue searches) to Facebook to let Facebook possibly become where that search happens instead.

    Seriously you or Andrew Shotland should maybe talk with Yelp and these guys about the Trojan horse implication of going that route.

    Perhaps Facebook ‘extorted’ Yelp into it by threatening to get into local listings if Yelp didn’t comply.

    Otherwise, this is probably the dumbest thing I’ve ever heard of Yelp doing….Facebook Connect to post a review happened on Yelp and get brand exposure…good for Yelp and the reviewed business…Facebook Connect to give Facebook a copy of your precious data…not bright…

    If I were Yelp, I’d get those fairly worthless like buttons off like ASAP…even if Yelp were under some ‘do it or else’ threat from Facebook…if Yelp doesn’t go along, Facebook is unlikely to be able to succeed at cracking local on their own.

    Is Yelp just clueless about how search monetization works as their best business model (HOW YOU MAKE MONEY) or did I miss some rationale here?

    Perhaps Facebook has a secret Facebook Connect deal with Yelp (search rev share perhaps) on this though like they apparently likely had in the past to let Yelp associate Facebook ID’s which is otherwise not allowed last I heard.

  13. Greg Sterling Says:

    I think the “danger” is there that Facebook would become the definitive source of local information over time.

  14. Malcolm Lewis Says:

    I suspect Yelp is already not thrilled with the idea. Their Like button implementation is pretty weak compared to say the Rotten Tomatoes implementation (clear FB branding + opp to post you Like as a status update). I’m curious to see if Amazon folds on the product side.

  15. nadav Says:

    hi,
    im nadav from http://www.fcbarcelonatickets.com a football ticket on line shop, we are planing a new web and marketing strategy and i wanted to point out/ask:
    the facebook comunity profiles that are active in the football related socialnetworks are not the people that buy tickets on line, there for not our target. how can we solve this conflict between traffic profile and targeted public?
    thank you, nadav

  16. Tim Cohn Says:

    Somewhat related to your thread:

    Matt Cutts has deactivated his Facebook account.

  17. Greg Sterling Says:

    Thanks

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  31. David Says:

    Interesting what will happen now that Google + is being rolled out. Obviously their idea is do do exactly what you say, and by integrating social signals from across the web into search results they ought to have a product that beats Facebook.

    The question is, have they left it too late?

    While plenty of people are jumping into Google +, most of them seem to be techie early adopters rather than “normal” internet users. Will Google + reach the tipping point fast enought?

  32. greg Says:

    David. Most of the action now is over at Screenwerk.com. Thanks for your comments. I agree that the population is techies. But that’s by design.

    Google should plan for a long build and not seek huge numbers immediately. But according to comScore the numbers (globally) are already more than 20 million. The company doesn’t need critical mass out of the gate, it just needs a dedicated group of users who are engaged with it and help it improve.

    It took Facebook a few years to overtake myspace. I don’t think Google+ is the new Facebook but I do think it will be around and used by many.

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