A Look at Facebook’s Foray into Location-Based Services - eMarketer

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A Look at Facebook’s Foray into Location-Based Services



Emily White
Senior Director of Local
Facebook

December 23, 2010

Emily White joined Facebook in September 2010. She leads the company’s product, sales and marketing efforts to engage with local businesses and users. White spoke with eMarketer principal analyst Noah Elkin about Facebook Places, the company’s location-sharing feature, and Deals, its location-based commerce initiative, as well as Facebook’s perspective on the burgeoning geolocation market.

eMarketer: Facebook was a relative latecomer to the fast-emerging location market, but given the size of Facebook’s mobile audience, it immediately becomes the heavyweight in the space. Could you talk about how Places and Deals will evolve?

“You can foster and in some cases even start relationships with those friends on the Facebook platform. And I think the most natural extension of that is into a place where users and businesses can interact.”

Emily White: You and I know Facebook as the place where users connect with each other—where you’re able to find your friends and you know what’s going on in their lives. You can foster and in some cases even start relationships with those friends on the Facebook platform. And I think the most natural extension of that is into a place where users and businesses can interact.

In fact, it’s really an extension of how businesses have been using the Pages platform. We found that many local businesses started to use Pages as their main communication mechanism, so what we really wanted to do was enable an even deeper relationship between those businesses and their customers. And we picked as a starting point one of the biggest problems local businesses have had online, which is they’ve been told that they need to spend money on advertising and to create a local presence. But they don’t always know exactly what they get for it. The concept of check-in deals helps them start to connect the dots between what’s happening online and what’s happening in their store.

“We have 200 million users on mobile devices looking at Facebook on a really frequent basis. So why not have an additional feature whereby they can interact with a business in a meaningful way and get some value out of it, and at the same time provide merchants value related to what’s happening in their store?”

Likewise, we have 200 million users on mobile devices looking at Facebook on a really frequent basis. So why not have an additional feature whereby they can interact with a business in a meaningful way and get some value out of it, and at the same time provide merchants value related to what’s happening in their store?

eMarketer: A lot of players have jumped into the location space, so there’s fragmentation in the market. Given that Facebook has the largest overall user base, how do you see Facebook helping to resolve the fragmentation issue, especially in a scenario in which a consumer knows there’s a deal out there, but doesn’t know whether to check in on Facebook or on a Yelp, Loopt or foursquare?

White: I get about 10 emails a day from deal sites, and I don’t have time to go through all of them. This is a real user issue that is a clear result of all the excitement around this space. There is certainly a scenario where one of the players is going to successfully and elegantly aggregate this data to make it much easier for the users to figure out exactly what deal they should be looking at on any given day, or where, based on their location.

eMarketer: What is your approach to marketing the Deals program to businesses?

White: We’re not doing a lot of outbound marketing. From day one, we’ve had so much interest in Deals, and it’s been a continued and growing thing. It’s a relatively simple product with a relatively simple user value proposition, both on the user side and the merchant side. Merchants seem to be getting it, and they’re actually reaching out to us.

eMarketer: What kind of tools, particularly in terms of reporting, are you making available to marketers?

“Over time, we can envision offering high-level demographic aggregation—a roll-up for merchants around what’s happening in their store—and start to give them some real business intelligence in aggregate about the people walking in their door.”

White: This first version is really basic. It’s focused on check-in and redemption volume. We don’t pass along any personal information about the users. But over time, we can envision offering high-level demographic aggregation—a roll-up for merchants around what’s happening in their store—and start to give them some real business intelligence in aggregate about the people walking in their door.

eMarketer: Given the high level of interest in the Deals program from many smaller businesses, have you been getting questions from business owners themselves on best practices for messaging and implementation?

White: We’ve been getting some, but it’s a little early to say whether this is a big issue. We have a lot of tips online already. Generally, businesses that are finding success with Deals are also starting to think about how they can help promote it, such as making sure they publish a deal on their fan page, potentially advertising it in our system or, at the very least, putting up some in-store signage. The merchants who are thinking through these steps are finding a good experience, and they’re also the ones making sure the staff is fully trained on how to accept a deal, which is vital for providing a good user experience. Right now, we're seeing a lot of interest and a lot of adoption, and people are just starting to figure out how to make this work for them.

eMarketer: When you think about the future of location and marketing, what do you see coming down the road?

“I’m really excited, because I feel like we’re at the beginning of a truly interesting time in this space.”

White: I’m really excited, because I feel like we’re at the beginning of a truly interesting time in this space. Personally, it would be wonderful to be in a world where not just deals but also the concept of being able to interact with merchants is something that’s acceptable to everyone, and it’s really a much more seamless process than exists today. Local has been hot for a while now, and I feel like we’re all starting to just kind of understand how to figure it out, and in a way that provides a tremendous amount of meaning and value to both parties.

The full version of this interview is available here, to eMarketer Total Access clients only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs.

Check out today’s other article, “Who Relies Most on Smartphones for Shopping?

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