The Privatization of Local Search

Share this:


I’ve had occasion to write in this column before about the concept of local search as a public trust. Indeed, it may be helpful to think of local search, in a metaphorical sense, as a kind of public utility, although that concept is, as they say in academic circles, fraught.

Local search takes place across devices and services that are proprietary and dedicated, even if indirectly, toward earning revenue for the companies that run them. If Google and others of these companies offer many local search services for free to consumers and businesses, the motive isn’t altruism — it’s eyeballs. More people attracted to free services means more people signing up for paid services and more consumers viewing ads. Ignoring the bottom line as the motivation behind Google Maps and other tools we tend to take for granted would be naive.

And yet, this doesn’t in itself preclude us from thinking of local search as a kind of utility. After all, public utilities like gas and electric companies don’t operate as charities either. We pay to keep them running and in exchange we expect them to fulfill our need for services fundamental to our daily lives. European antitrust actions against Google and Microsoft have underlined the point that our computer desktops and internet search pages exist in large part to serve the public good as well — or at least we have been trained to think of them that way. The private companies that create these environments enjoy their status as default brands for our most common activities precisely because they are careful to maintain neutrality in the mind of the consumer. Google surely knows that it must play a delicate game whenever it co-opts a few more pixels on the search results page.

In organic and local search, there’s a long history of debates over the concept of paid inclusion. Once a fairly common search engine practice, Google notoriously shunned the idea of paying for prominence in search results as part of its “Don’t Be Evil” mission statement, though the company later experimented with paid placement for verticals like hotels. Still, Google always was careful to mark sponsored content as such, taking great care to let consumers know that they were essentially viewing a form of advertising. So, too, with ads in Maps results pages, which are clearly set apart from organic content.

Local search has always been more fragmented than organic, and remains that way today. In part, this is because, ironically enough, local search itself has no clearly defined location. It occurs on the search page in both local and organic results, but it also takes place in apps and name-in-mind searches on popular sites like Yelp and Facebook. Where you go for local information depends on who you are, what you’re looking for, and where the best answer to your particular question resides.

But local searches all share one thing, even though it exists only in an abstract sense: a common data layer. Whether I find a restaurant for tonight on Apple Maps, Foursquare, or Bing, I expect to get the data I need to transact business. Is the restaurant nearby? Is it still open? What’s the phone number? Local search providers compete to offer the most compelling or customized means of answering these questions, but in an ideal world, the answers themselves should be identical.

The entities that stand to gain the most from ensuring accuracy and consistency in the local data layer are consumers and the businesses for which they are searching. But search portals gain too: The perception of value in the minds of both constituencies gives portals a playing field on which to compete with differentiated services. No matter how engaging the user experience, however, local search at a basic level must provide the correct answers to factual questions. The best way to do this is to let businesses control data about themselves, either directly or through services whose task is to assist businesses in navigating the complexity of the local ecosystem.

This is why Yahoo’s recent announcement should give us pause. The search company may be keeping a pathway open for free management of business listings for now, but it’s easy to see all of listing management on Yahoo eventually disappearing behind a paywall. As with MapQuest and some smaller directories, Yahoo appears to have decided that maintaining public access to local data is less important than maintaining its own easy access to a high-margin revenue stream.

Of course, one can’t blame Yahoo for conceding defeat to Google as a local portal and circling its wagons around more easily defensible assets. Still, the unavoidable consequence of the privatization of local search is a loss of perceived value. Local listings are fundamentally different from advertising — an important distinction. The certain sign of decline in a search portal is when advertisements and sponsored content overwhelm useful information. It comes to seem like a cash grab rather than a tool, eroding the very value proposition the paid service was designed to leverage. This is a story that doesn’t end well for businesses, consumers, or Yahoo itself.

Local listings management is a form of marketing, to be sure. Businesses should do everything in their power to stand out from the competition and present themselves in an appealing fashion to consumers on multiple third-party sites, social networks, and apps. Marketing service providers can be extremely helpful in this effort, but these services work best within a context where local listings are treated primarily as a form of information — again, as a kind of public utility — and the foundational activity of local listings management is ensuring completeness and accuracy of information. Paid placement inevitably turns listings into a form of advertisement, and portals that go that route will simply drive consumers to their competitors.

Damian Rollison is Director of Market Insights at SOCi.