What Marketers Need To Know About Facebook Nearby

Ever since Facebook acquired his location-based check-in site, Gowalla, around this time last year, co-founder and CEO Josh Williams (now a product manager of pages, locations, and events at Facebook) has been building the next phase of local-social discovery. Despite a roller-coaster year that brought the check-in industry plenty of ups and downs and a fair share of speculation as to what would come next, the scope of the new location project remained under wraps, until now. Last month, Facebook announced, to much fanfare, the release of a bundle of new and updated features collectively known as Nearby.

Ever since Facebook acquired his location-based check-in site, Gowalla, around this time last year, co-founder and CEO Josh Williams (now a product manager of pages, locations, and events at Facebook) has been building the next phase of local-social discovery. Despite a roller-coaster year that brought the check-in industry plenty of ups and downs and a fair share of speculation as to what would come next, the scope of the new location project remained under wraps, until now. Last month, Facebook announced, to much fanfare, the release of a bundle of new and updated features collectively known as Nearby.

Industry pundits are already suggesting that Nearby presents a major hurdle for Yelp and Foursquare, particularly on mobile.

That’s big news for local businesses, hotels, restaurants, etc., but some global retail brands might (understandably) be wondering exactly what it means for them now and in the future. At Brand Networks, we’ve been able to glean some preliminary insights into how using Facebook’s local features can drive “butts in seats,” “heads in beds,” “turning turnstiles,” and “ringing registers” for businesses large and small.

Here’s what marketers need to know about the potential impact of Nearby:

The Landscape
With the proliferation of social networks over the past several years, smart marketers have surveyed the landscape and prioritized the right channels for their messages, rightly determining that some just aren’t worth the effort. Now that the dust has seemingly settled, it’s fair to say that most consumer brands today focus on Twitter and Facebook as their social networks of choice, while those with brick-and-mortar presences monitor Yelp, TripAdvisor, and other popular ratings sites, as well as check-in-based services like Foursquare.

But a site like Foursquare, with relatively few users (a respectable 30 million), is often an afterthought for marketers. Facebook, by contrast, has 250 million users tagging locations every month, Williams tells TechCrunch. That critical mass, he explained, results in a huge difference in the amount of data available to fuel the application. Since Facebook already has a wealth of photos, tags, and social data, Nearby is not about check-ins so much as personal context — knowing what local businesses to recommend based on social connections and data like reviews and tips, for example.

For marketers, Facebook Nearby changes everything, providing access to their customers en masse in the context of their daily lives.

So here’s what it all means for brands and marketers of all stripes.

Outbound Marketers

Ads

Search-based

It’s not clear yet what types of ad units will be created in tandem with Nearby, but if Yelp is any indication, brands may soon be able to pay for higher placement in local search results. If this happens, brands should take advantage, as many people searching for places on their mobile devices are in a hurry and will go with the first good option they see. These ads are likely to be very powerful.

Hyperlocal

There are also likely to be some ads that leverage near field communication and/or check-ins to offer hyperlocal promotion opportunities. This would be a great opportunity for brands to increase discovery and to pull people into their brick-and-mortar locations using supertargeted advertising. Although Facebook already provides the ability to target users based on check-ins, the added features of Nearby will give Facebook users new incentives to provide location data. This should make it easier and more efficient for brands to target people based on their whereabouts.

Friends’ Activity

Nearby leverages real-world friendships and connections to help people find businesses. As powerful as Yelp’s review system is, it’s still hard to connect with your friends on it (and most people just don’t bother — it’s not required, and the incentives are unclear.) On Yelp, you can find out what 1,000 strangers think of the sushi restaurants in your area, but if, via Facebook, you find out that six of your friends like the same one … well, you’re way more likely to check that one out. Right now for Nearby this will be an organic feature, but it’s likely that brands will start to leverage friends’ check-ins and reviews to serve ads for particular places to their fans, much the way sponsored stories currently work in the news feed.