Lots of Facebook News — But Little Progress in Local

Share this:

Last week produced a flurry of Facebook news, including the latest News Feed algorithm tweaks, a limited local news section, the apparent end of its hybrid AI/human chatbot experiment, and murmurings about video chat hardware. Since local marketers rate social media as one of if not the most effective marketing channels, and since Facebook dominates social media, it’s worth putting a local media and marketing perspective on the stories.

In response to concern over its role in fostering fake news and echo-chamber filter bubbles, Facebook said it was adjusting how its Feed prioritizes content for users, de-emphasizing news stories and brand posts and promoting friends’ posts that generate conversation. A little earlier, the company said it was testing a new channel for local news and events in six U.S. cities. This is one of the fruits of its journalism project, and appears to be unrelated to its Facebook Local Yelp-wannabe offering.

Facebook seems to be separating elements of what has been the local media business model for both traditional and digital media. Instead of integrating multi-media news consumption with entertainment, community conversations, events calendars, advertising, and a buyers and sellers marketplace, it’s isolating them as components. While this is consistent with its separate apps approach (core Facebook, chat, Instagram) it likely won’t result in as much audience cross-fertilization as it should. Neither does it feel at all local advertiser-friendly.

In a post on January 11, Facebook CEO Mark Zuckerberg sketched out the Feed changes and the thinking behind them. In it he noted, “Now, I want to be clear: by making these changes, I expect the time people spend on Facebook and some measures of engagement will go down. But I also expect the time you do spend on Facebook will be more valuable. And if we do the right thing, I believe that will be good for our community and our business over the long term too.” We’ll see. Some already think it means ad pricing will go up in response to shrinking inventory and/or usage.

As shown in the figure below, many big brands rate social media advertising among their top three local marketing tactics, nearly on par with email and neck and neck with TV. Slightly more respondents to our Street Fight survey said they used Facebook than Google, and far more than Twitter, Yahoo, or local specialists like Yelp.

Both enterprise local marketers and local small businesses told us they planned to increase their social media budgets. That’s supported by our early returns from our new survey of the hyperlocal supply side, who say that social media is the top area where they see their customers increasing spending. Even more than the multi-location brands, local SMBs say social is their most effective advertising or marketing tactic – over 60% rate it in their top 5, higher than email. And as shown below, they say Facebook offerings are their top social media.

Before the shift in its Feed algorithm, by some accounts Facebook has been driving less publisher traffic than Google lately. And referral traffic is only half the battle. At the same time, professional content creators have widely differing opinions on using Facebook to distribute content for consumption: it’s tough to generate ad dollars from it, even if it doesn’t directly result in traffic back to their sites. Media brand recognition is certainly valuable, and Facebook appears to want to promote that rather than burying it. But seemingly more publishers are tuning content for Google’s mobile AMP format than for Facebook’s Instant Pages. The new channel will raise more questions for local publishers until it has been up and running for a while.

Streaming video on Facebook is another puzzle for local media. Facebook’s video strategy has been all over the place: longer vs. shorter formats, professional vs. user content, ever-evolving rules and regulations on advertising, and lots of mis-measurement. Video is emerging as an effective local medium for brands, according to our survey. Right now, it looks like YouTube is the bigger and better platform, especially since Snapchat appears to be struggling and is focused on national media.

So far, Facebook is a non-event in local search, and is sitting out this round of voice search and home-based or mobile smart assistants. It announced that it was cancelling Facebook M, its IM-oriented chatbot that was partly powered by real, live humans as well as artificial intelligence. The video hardware it’s supposed to be preparing for introduction at its developer conference this spring seems to be about videoconferencing rather than virtual assistants. Even though virtual assistants were the talk of CES last week, I expect that particular platform battle has a way to go before it has a major impact on local media or marketing. That said, Amazon and Google are going to be way ahead on voice input and output by the time Facebook articulates a strategy around it.

The net result of recent events seems to point to continuing confusion over Facebook’s role in local, even as its audience reach and targeting capability remain hugely compelling, and social media grows as a very effective local medium. 

David Card is Street Fight’s director of research.

Click here to take Street Fight’s latest State of Hyperlocal survey and save 15% on Street Fight Summit West tickets or download a free report.