Finally! The 800 million ways Facebook gets serious about local business

For quite some time, the search industry has been wondering when Facebook is going to get serious about local search. With 2 billion monthly users, the world’s largest social media network could potentially become a powerful platform for people to do hyperlocal searches for things to do and buy, just as Google is.

But for years, searching for a business on Facebook has been a clumsy and unreliable experience. As a result, Google has become the primary place local searches take place. But we’re beginning to see some signs that Facebook is setting itself up as a platform for location-based marketing and search, and Facebook Marketplace is key to how Facebook is changing.

800 million strong

The typical Facebook user probably still thinks of Marketplace as a virtual garage sale. Facebook originally launched Marketplace in 2007 as a way for people to post classified ads as they do on Craigslist, but the feature failed to catch on as users instead relied on their own “buy and sell” Facebook Groups.

Facebook relaunched Marketplace in 2016 with a more dedicated effort to attract users. Significantly, Facebook assigned Marketplace a prominent spot in the navigation tab bar. This time around, Marketplace took off.

In May 2018, at the F8 Developer Conference, CEO Mark Zuckerberg reported 800 million people across 70 countries were using Marketplace each month compared to 86 million people who visit Craigslist monthly.

It did not take long for Facebook to capitalize on Marketplace’s potential for connecting people and retailers locally (in addition to connecting people with each other to sell merchandise). In recent months, Facebook has made several changes:

  • Opened up Marketplace to automotive dealerships. Starting in October 2017, Facebook has been working with third-party publishers such as Edmunds to pull vehicle listings from their inventory and list them on Marketplace. In addition, Facebook has beefed up the Marketplace search filters to help users do more descriptive searches for vehicles and dealerships near them, thus making Marketplace a more useful search tool. By working through third-party publishers, Facebook also has a way of vetting dealerships with credible publishers instead of taking on the task itself.

  • Introduced home services on Marketplace. In May 2018, Facebook took another major step toward making Marketplace a commercial destination when it announced the launch of home services on Marketplace. Now, users can find service providers such as plumbers and house cleaners by applying search filters to narrow their interests, just as one would on Google. Once again, Facebook is working through third parties such as Handy to vet their supply of professionals. In a statement, Facebook Product Manager Bowen Pan said, “More people ask for recommendations related to home services on Facebook in the US than any other topic. By partnering with Handy, HomeAdvisor, and Porch, people will now have a place on Marketplace to find the right professional to help with their next home project.”

With both automotive and home services, Facebook is capitalizing on activity that had already been flourishing on private user groups, but not necessarily in an organized fashion. Through Marketplace, Facebook gives users a more organized, vetted way to find commercial alternatives locally.

For instance, when Marketplace users want to find a home cleaning professional, they need to complete details such as how many bedrooms are in their home and the home’s size in square feet. In addition, Facebook makes it possible for both the professional and the customer to communicate with each other via Messenger (which also applies to auto dealerships).

Facebook does not collect any fee from these transactions, so what’s in it for Facebook? The answer: user engagement.

Facebook is making plenty of money from merchants through advertising. But Facebook has been enduring declining engagement numbers in recent months, and giving users more options to stay on Facebook, such as a more robust Marketplace section, is one way Facebook can address this challenge.

In addition, an expanded Marketplace gives Facebook one more weapon against Google, which enjoys a head start in local search and platforms such as Local Services by Google to connect customers with businesses.

Advantage: Facebook

Although Google is a formidable competitor with a well-entrenched position, Facebook offers a few advantages:

  • Social proof. On Facebook, you can more reliably vet merchants through the power of reviews by other users — either through people you know or through people you can contact to discuss their experiences with a business. On the other hand, Google, like Yelp, struggles to contain fake reviews.
  • Messenger. Facebook has wisely established Messenger as a quick follow-through tool for people to contact each other and merchants. As Facebook builds out Messenger to be more content-rich, it will become more useful as a way for buyers and sellers to do business. One issue that merchants may need to address: The person who manages their social media activity may not be the appropriate person to manage a product request via Messenger. Merchants will need to figure out an efficient way to manage the handoff between their social media team and sales/fulfillment personnel.

Look for Facebook to expand Marketplace for more businesses based on the dramatic user growth. If Marketplace becomes applicable to your business, you’ll be able to capitalize on the one-two punch of Facebook advertising and organic engagement through Marketplace, your own page and Facebook’s own advertising products.


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