Could Facebook Be About To Enter And Win The Location Battle?
Seems like a funny title to give a post given the fact that Facebook have not even entered the location based wars that are currently being waged between services like Foursquare, Gowalla and more recently Twitter. Facebook are not at the races yet in terms of location (it’s not even a feature) but the key word in this sentence is “yet” and I think they may be about to enter and possibly dominate the location market. There are a few key factors that give Facebook a massive advantage and could see them grab huge market share and with their F8 developer conference happening this week in San Fransisco it would seem that it is the perfect opportunity to roll out their location based offering…
Huge Mobile Usage Already
I have spoken in the past about just how good Facebook is on the iPhone and in general I prefer using it on mobile devices as opposed to in the browser and it seems that over 100 million other Facebook users agree with me as the mobile usage of Facebook has sky rocketed recently. One of the main reasons that mobile usage is on the up is that Facebook is actively promoting that as a channel all over the site and when you have over 400 million users that equates to a lot of conversions. We’ve already discussed how this will be the year of mobile social media and there is little doubt that people are starting to use the devices they carry around with them in their pockets to engage with their social networks on a daily basis.
Less Geeky Than Foursquare
Foursquare may be getting all the hype at the moment and the early adopters are certainly using the service in droves but it means nothing to the average man on the street. Some companies are already dipping their toes in the water with special offers for mayors and discounts for checking in using Foursquare but even it’s biggest fan will admit that it is a long way off reaching the mainstream. My big issue with Foursquare and the reason I don’t use it is that none of my real friends are on there checking in. There are plenty of people I know on Foursquare but I am just not interested in sharing my location with them but on the other hands my friends who are on Facebook are generally people who are from my trusted network of people who I have known for many years and I probably wouldn’t mind them knowing where I am.
Small Businesses Already On Board
According to Facebook, the Web site currently hosts more than 1.5 million local businesses from around the world. Small businesses love Facebook due to the fact that it is so easy to set up Pages and promote themselves and engage with their fans with many choosing to substitute a website with the cheaper and more engaging Facebook fan page. Businesses have been trying lots of different methods to engage with fans and the ones who are doing it well and pushing out good content have seen a significant uptick in sales and see Facebook as an increasingly important marketing channel.
Facebook Needs Additional Revenue Streams
For all of it’s users and interaction Facebook has until recently struggled with the magnetization of the site with many of the adverts it allows users to run having appalling click through rates and low engagement levels. There is no doubt that Facebook is making money but it has not got to the stage that Google is at where it’s Adwords and Adsense products pretty much allow it to print money. Adding a new location based advertising model with millions of small business being matched up in a very targeted way to the 100s of million Facebook users could just be the cash cow that Facebook has been waiting for.
Google Beware?
The reason Facebook gets such crazy valuations (most recently talk has been around the $20 billion level) is that it has a a huge user base who are all split down in to very clear demographics and incredibly easy for advertisers to target. If you add an extra layer where small businesses can target users based on their location with special deals and offers then you open up a huge new revenue channel and Facebook then really start to stray in to Google’s territory and they will be eyeing up some of the billions in revenues that Google rely on so much. The big brands have already jumped in to Facebook and started spending big bucks to acquire more fans and engage with their consumers but the real danger to Google is all the local businesses who could be tempted over to Facebook with a new location based product.
When Will This Happen
It will almost certainly be rolled out this week. Facebook has been spotted testing QR codes in the last couple of months which could be part of the feature set and it feels like Facebook should have rolled this out a long time ago but my guess is that they are going to do something very spectacular around the business pages and location and they want to make sure they get it right. The huge advantage that Facebook are going to have is that they have millions of trusted users already walking around using Facebook on the go so adding a transactional or promotional layer to their platform is going to be a game changer. It will be interesting to see if Facebook go up against Foursquare and Gowalla (my guess is that they won’t and will encourage them to use the Facebook platform to further their offering) but the real battle here is with Google. Business pages have been very useful for brands and businesses but they feel a little one dimensional now and they need some new features that engage users and increase transactions. Watch out for a whole lot of fuss about the new Facebook location features this coming week with most people screaming about privacy issues and expect to be “checking in” in the very near future on Facebook.
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