I'm frequently asked who's winning in local. The answer always surprises me in how short the list is. Google wins in usage, by sheer weight of query volume. But courting a fragmented SMB market (direct and through re-sellers) continues to develop.
Pureplays like Foursquare and Yelp aggregate respectable-sized audiences, but face those same monetization challenges of a fragmented SMB population. Yelp has an edge here, as it brings engineering and product focus together with direct local ad sales.
Speaking of direct sales, there's also yellow pages. They have the opposite problem of Google: Thousands of "feet on the street" reps to get their arms around SMBs; but not always the same product focus or swiftness to innovate local and mobile products.
But where's Facebook in all of this? It usually gets my "sleeping giant" designation within local. That's not to ignore its already woken status as an 800 pound gorilla in general; but because its local ad monetization has stalled out for the past few years.
On the user side, Facebook is back and forth on Places, check-ins and other location features. The Nearby feature is now more clearly branded as "Local Search," but it's still buried in the UI. I expect this to change soon (more below).
How this translates to ad dollars continues to be the big question, as it's inherently gated by context. In other words, Google's use case has clear commercial intent for immediate needs, while Facebook is where I go for drunk pictures of my friends.
"Google is the best advertising product in the history of the world... because it's like advertising at a store," Henry Blodget said recently, "Facebook, meanwhile, is like advertising at a party." The question is if Facebook will be able to change this.
I'm starting to come around to Facebook's opportunity to tackle local. In the last few weeks alone we've seen some impressive numbers to support both local search usage, and SMB advertiser adoption. Many aren't paying yet, but there are positives signs.
Facebook director of SMB Dan Levy announced at the Local Search Association show that 70 percent of Facebook users are connected to at least one local business page. And in total, there are 645 million monthly views for these pages.
This comes soon after the Comscore/Neustar/15Miles study that showed Facebook has the second largest app usage for local search, behind only Google. This was surprising because Facebook Local Search has mostly been buried, as mentioned.
In other words, this lead in local is more about Facebook's overall reach and halo effect, than any extensively overt product positioning. So the question becomes what can be expected once Facebook does actively push harder on local search?
"[Figures] were a pleasant surprise," Levy said. "It shows that people are turning to Facebook. We've been investing to have SMBs exposed, but the local search product is still under development and we want to make sure it's ready before it's front and center."
The product updates we can expect are not just user-facing local features, but also merchant-facing tools for Pages. Think: appointment scheduling for home services, coupons and offers for retail and restaurants, or eCommerce where it makes sense.
This all gains additional relevance with Graph Search. If you triangulate Facebook's moves with Nearby/Local Search, Graph Search, and mobile news feed ads, there's an opportunity to connect buyers and sellers in locally relevant ways.
Though it's early, we can bet the format will be organic to the user experience, stressed Levy. With the same "native" philosophy that's behind all Facebook monetizaiton (i.e., sponsored stories), local advertising should merge with the user experience.
"People on Facebook ask friends for recommendations," said Levy. "'I'm in NYC, where should I eat?; I have a sick kid, who knows a pediatrician?' This is the word of mouth advertising that's happened for years. We'll put those queries in a structured format."
The opportunity further bifurcates in mobile. With all the talk about SMB mobile presence, much can be inherently gained with Facebook asserted Levy. In other words mobile distribution is built in to the presence and active posting from a Facebook Page.
"Knowing you automatically have a mobile advertising strategy as part of your Facebook Page is an important thing that's resonating with SMBs," said Levy. This is exactly the lowered barrier that could finally get SMBs into mobile marketing en masse.
And of course there's the other mobile topic on everyone's mind: Facebook Home. Like most of the above, this newest move by Facebook will have tie-ins to its local search and SMB marketing efforts. Levy gave a nod to how this could take form.
"With Cover Feed, which gives you News Feed updates on your home screen, businesses can make page posts that surface there," he said. "Business will appear just like a user's friends. And knowing our rate of development, this will advance quickly."