Facebook’s Perennial ‘Potential’ in Local

David: Nice to chat with you after a busy week at SMX Advanced in Seattle, Mike.

Mike: Hopefully that was time well spent. I am glad to not be traveling and am able to finally ride my bike.

David: Definitely time well spent, although like you I’m happy to be home for a little while to enjoy our three months of sunshine for the year.

As far as a topic for this week, you and I both caught this piece from Reputation.com’s Adam Dorfman about Facebook “finally” getting serious about local. Adam describes some of the recent Marketplace feature releases as well as a number of other latent arrows in Facebook’s quiver.

Mike: I saw that article in my tweet stream and ran over to read it, thinking that Facebook was actually going to make a move in local that made sense. Alas, the title was more ambitious than Facebook’s local efforts.  

David: It sure seems to me we’ve seen this movie before with Facebook: lots of potential but incredibly limited execution on that potential.

Mike: I actually tried to use Facebook’s Marketplace to look for cars, and it was the lamest experience ever in local. While they have long had access to the local graph and long had the local users, this experience left me feeling “WTF?” In no way could it be construed as anything more than one more failed experiment.

Which leaves me asking when “finally” is going to become now for Facebook and local? (A question we have been asking for eight years or so.)

David: It feels like the higher-ups just don’t see the dollar signs in the SMB/local market—which is weird, because they regularly tout the number of active advertisers on their quarterly earnings calls, the vast majority of whom are small businesses. Maybe Facebook executives just know how to play that audience with vanity metrics, though.

Given the incredible user data Facebook collects—and its search for something less game-able and divisive than fake news—now seems like the ideal time to become the meeting point between brick-and-mortar small businesses and their real-world communities online.

To some extent this is happening serendipitously in Facebook Groups, as our Local U colleague Carrie Hill has pointed out, but it’s almost in spite of Facebook’s efforts to become this meeting point rather than because of them.

Mike: True about the Groups, but the tactics Carrie points out are not easily accomplished even by single-location businesses, let alone multi-location ones.

Given Google’s massive push in local over the past 18 months, one has to ask if Facebook’s opportunity in local may have passed?

The usage trends would seem that they are starting to turn against Facebook as well. They seem to be losing the next generation of shoppers.

David: I think that’s true of the Facebook platform itself, at least in the U.S., although Instagram still seems white-hot and WhatsApp is still intriguing.

On the consumer side, in Portland at least, and I suspect in other relatively tech-savvy mid-size or larger cities, NextDoor actually seems to have taken a sizable chunk of Facebook’s engagement.

Mike: And it’s not just on the consumer side that we are seeing Facebook fading. It is only a matter of time before small businesses realize that their organic reach in Facebook is asymptotically approaching zero.

Many of these businesses created Facebook-only presences that can’t be providing any real benefit. They will start utilizing other entry-level tools to promote their business presence and leave Facebook. That would be a huge loss to Facebook if that happens.

David: I also noticed the article you shared in last week’s Local U newsletter from Digiday about the number of brands fleeing the advertising side due to increasing costs. While I still think Facebook ads offer darn good value relative to other options, the competition even for paid placement, not just organic, has clearly ratcheted up.

NextDoor seems to have done a better job of both intentional experimentation with specific monetization techniques, as well as at least attempting to facilitate structured data collection and dissemination whenever a NextDoor user mentions a small business.

They have a long way to go to make it easier for businesses to participate in these conversations, but in the markets where NextDoor has significant penetration, it now seems to be a more logical place for small businesses to participate than the Facebook news feed.

Mike: I suppose that Facebook could buy NextDoor or perhaps figure out an Instagram local strategy, but I am starting to lose faith that Facebook itself will be the competition that Google needs in the space.

David: Facebook has dipped its toe into the dedicated app experiment, using Events as the central selling point, but I haven’t seen any growth or engagement metrics reported by the mainstream tech press.

At least anecdotally, it feels like Instagram has a lot more consumer-business engagement than that dedicated app and would be a more natural place for Facebook to start building a truly well-integrated local discovery product.

Mike: Maybe Facebook has already figured this out? They seem to be largely re-emphasizing person-to-person interactions over consumer-to-business interactions in the main platform.

David: Well, Facebook seems to be pushing Messenger extremely hard on both the business and consumer side as that communication vehicle, but from where I sit, it’s totally unrealistic to expect that a small business has the time to answer messages 24×7. And the promise of M as a discovery product has faded.

Mike: In Facebook’s pivot to focusing on person-to-person communications and its strong emphasis on messaging, is there an implicit concession that the company will not make Facebook itself the center of its local effort?

And that we will have to await another day to finally see them realize all of that “potential”? I think so.

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After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company GetListed.org to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University. 

Mike Blumenthal is a co-founder of GetFiveStars, a feedback and reputation platform, and LocalU, which provides small business and agency training in sustainable local search marketing. His motto: All Local All the Time.  He writes at his blog and does a twice a week podcast about Local marketing. 

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Got an idea for what you want Mike and David to discuss next time? Send it to either [email protected] or [email protected], or just leave a comment below and we’ll put it in the hopper!