Google’s Cities Initiative and the Ownership of Local Data

As we know, Google has made a herculean effort to create highly detailed virtual and photographic maps of the world. But like all mapping providers, the company relies on data overlays to make maps usable. One of the trickiest data sources to keep accurate track of is the corpus of business locations in a given city. Businesses move, change names, appear and disappear at a regular rate. Given this state of constant flux, no third party source of information can offer perfect business location data. Yet location data matters. The usability of Google Maps hinges on its ability to return accurate, actionable information about local businesses to consumers on desktop and mobile. So too, Google has a strong incentive to engage with small businesses on a free platform like Maps in order to drive the sale of paid products.

Google has historically licensed location data from aggregators like Infogroup and Acxiom, relying on its own deduplication and quality control algorithms to derive the best amalgam it could of multiple third party sources. On top of this, for several years Google has allowed small businesses to directly manage their local listings by going through a free claiming and verification process.

Ideally, Google would source small business data from businesses themselves. In reality, however, half of small businesses still don’t even have a website, and getting them to recognize the importance of managing local listings has not been an easy job. In fact, Google has just recently endorsed a statistic from a 2011 Marketing Sherpa survey stating that only 37% of businesses have “claimed a local business listing on one or more search engines.” If Google is still repeating that statistic today, you can bet the needle has not moved much in the last four years.

So Google’s recent announcement of a new initiative called “Let’s Put Our Cities on the Map” belongs to the larger story of the company’s attempt to gain a critical mass of participation from small businesses. The initiative is intended to promote Google My Business signups in 30,000 U.S. cities in cooperation with local chambers of commerce and other community organizations. Google has created a custom website for each city with resources to help small businesses and their supporters get involved. As an incentive, they’re offering each participating business a free domain and web hosting for a year through partner Startlogic.

This initiative is really a continuation of the “Get Your Business Online” program that began in 2011, an effort to promote small business websites. The company’s shift in attention to local listings reflects the symbiotic nature of the two activities. Most small businesses will struggle to get their websites noticed in organic search amidst competition from national chains and big local directories. But Google local results are different. For targeted or inferred location queries, Google wants to return its own local listings, within which website links are prominently displayed.

Google’s local offering is strengthened by participation from business owners, and Google’s ultimate play is likely to own the most valuable body of location data online by deriving it directly from the source. It won’t be easy. There’s a reason why aggregation en masse has been the favored model for sourcing large datasets. As soon as you shift your reliance to millions of individual contributors, you lose a great deal of control. But the crowdsource model has worked elsewhere and could conceivably work for local. Already Google Map Maker has established itself as an active community of contributors to the continual improvement of Maps.

This isn’t Google’s only recent move toward a greater degree of ownership over local data. As Mike Blumenthal has observed, Google recently cut ties with Yellow Pages Group in Canada as its primary supplier of Canadian business listings, and for the last few years has been renegotiating contracts with data suppliers across the globe so that listing content is purchased and owned by Google rather than licensed on an annual basis. If the company sees success with its new initiative, it will further reduce its reliance on third party sources, at least in the U.S. No doubt that would set a precedent for similar efforts in other countries.