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Marketers Gush, Speculate Over Facebook's Graph Search

Mobile, intent data hold largest potential, agency execs say

Marketers have been awaiting a Facebook search product for a while, and on Tuesday Facebook finally delivered it with Graph Search. Like baseball prep star, agency execs considered the product unfinished but were quick to scout its potential.

“This is huge,” said Jordan Bitterman, svp and North America lead for social-mobile-content. Even though Facebook CEO Mark Zuckerberg said Graph Search isn’t yet a business the company will monetize, Bitterman expects it to be “a highly used application for the Web.”  

Which would be unthinkable for any public company not to monetize, Bitterman believes. “I don’t take them at face value when they say they don’t have a date in mind for how to monetize this,” he said. “My gut tells me late Q1 or early Q2.” The question then becomes how to monetize.

Search ads are the low-hanging fruit. Facebook rolled out Sponsored Results last summer and will be porting them to Graph Search. But the key with Graph Search is the intent data Facebook may finally unlock. The social network is traditionally seen as holding valuable interest data, but intent data has been largely the domain of Google and Amazon. “What Google built its empire on was intent data and matching that with relevant content,” said Chris Copeland, CEO of GroupM Next.

What Facebook is attempting to do with Graph Search is build a tool that will compile and organize those massive piles of interest data it holds and map that data according to intent signals based on users’ queries. Bitterman wasn’t sure whether Facebook’s intent data would be as strong as that held by e-commerce sites since it skews closer to “implied intent,” but they’ll certainly start moving in that direction.” Even better for Facebook, it will have something Google doesn't: a blend of  interest and intent data (since Google has no access to Facebook data).

Assuming Facebook eventually streams Graph Search data into its ad targeting algorithms—and be serious, that day will come—the company could put its existing ad business on steroids, particularly when cycling that mixinto the Facebook Exchange—and the long-rumored external ad network. “If my wife goes on Facebook and starts doing searches around recommendations for doctors or diapers or other maternity items, Facebook is going to understand something about her and might target her differently through the exchange in the future,” Copeland said.

Mobile is another obvious application for Graph Search since users are often in search of things while on the go and a sponsored result can be as good as an organic one when urgently needed. Google said during its Q3 earnings call that the company raked in $8 billion from mobile, with the bulk of that haul coming from ads. Mobile was grouped in the next batch of updates the company will make to Graph Search, and Copeland said when that mobile solution finally launches it will have “real potential” for local businesses, particularly retailers and restaurants who currently look to Google, Foursquare, Yelp, etc. to get in front of on-the-go consumers.

Bitterman pointed out that last year eMarketer projected Facebook had overtaken Pandora as the second-biggest player in mobile behind Google. “It’s safe to assume that will [continue] in 2013 if they’re able to monetize through the first half of the year,” he said.

But before Facebook monetizes Graph Search, the product will need users. Robin Grant, global managing director at We Are Social, doesn’t think that’s a guarantee. “Its immediate impact will be very small," Grant said. "It seems that this is a product that has been built without any reference to user need." “At the moment it offers little real utility, and requires a massive change in behavior for people to start using it. As a result it's likely to flop initially, just like [searcb alternative] Wolfram| Alpha did on launch.”

GroupM’s Copeland also considered Graph Search an underdeveloped effort. “It’s lacking a mobile product and feels very 1.0. It’s going to take some time for people to get acclimated to using the product,” he said.

And, if and when they do, Google will be on watch. “While Graph Search is unlikely to worry Google at the moment,” Grant said, “if it survives the next few months of scrutiny from the media and Facebook users actually start using it, it could prove a threat in the long term.”

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