Developing Better Search A Key To Facebook’s Future

During last week’s Facebook earnings call COO Sheryl Sandberg argued that the company could and would compete for marketing dollars “throughout the entire marketing funnel.” That is, from branding and awareness at the “top” of the so-called funnel to “demand fulfillment” at the “bottom.”

Below is the quote in broader context:

We believe we are very well positioned to compete for advertising dollars throughout the entire marketing funnel, from the very top where companies focus on generating demand, to the bottom where the focus is on fulfilling demand. The majority of the advertising spend that is migrated online to date has been for demand fulfillment, which happens when a customer already has intent to purchase. Search advertising has been the primary driver of this migration. Facebook is also effective at the bottom of the funnel, with gaming being a primary example. But we believe that Facebook also helps marketers build brands and generate demand. This is important because the majority of the $600 billion global advertising market is spent on demand generation.

(Emphasis added.)

Right now Facebook doesn’t truly compete for ad dollars in the “demand fulfillment” category. As Sandberg implies this is where Google reigns. But Facebook doesn’t need to directly compete with Google in web search to participate in search revenue or bring the site more fully into the demand fulfillment arena. (Sandberg & Co may be thinking of novel alternatives to search but search is the most direct way in.)

A couple of weeks ago Director of Facebook Engineering Lars Rasmussen, a former Google employee, told the Sydney Morning Herald that it made no sense for Facebook to get into web search. I agree; the company probably wouldn’t compete effectively against Google and it would create problems for Facebook’s relationship with Microsoft.

However search on and within Facebook can continue to improve to the point where it becomes a valuable utility and search revenues start flowing. As Greg Finn pointed out recently, Facebook is already testing sponsored results in site search.

Last week on my personal blog I wrote about Facebook’s Massive, Still-Untapped Local Opportunity. One of the comments to that post was the following: “The problem FB faces is that none of us use it to find local businesses when we need one. So unless FB finds a way to change that, no SMB will ever derive any value from advertising with FB.”

Exactly. One way to change that is to make search within Facebook a real honest-to-goodness tool that people actually use to find things. Once that happens, you’ll see local businesses and brands respond with more content and with search-like ad campaigns. We would also likely see products and product catalogs showing up.

The combination of social signals (Likes) and other content could make Facebook search a compelling tool that people would start to use for all kinds of queries. But that’s all contingent on the degree to which Facebook invests in and develops its own search capability.

It’s not just about revenue. Better site search would make the overall Facebook experience much better. It would lend a kind of “coherence” to the site that’s currently lacking.

In a way it doesn’t matter if Facebook ever does anything with “web search” if it dramatically improves search on Facebook. It will achieve the same result: getting people to use the site when they have “intent to purchase.” Then, and only then, will Facebook truly be in the “demand fulfillment” business.

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • http://www.mediawhiz.com/ Keith Trivitt

    Great analysis, Greg. You’re spot-on when you point out that while Facebook doesn’t need to (nor should it) compete with Google in search it needs to better integrate search within its platform. There are multiple benefits to this but perhaps the most obvious is that search is how people still use the Internet and it is how we will continue to use the Internet for years to come. While there will be multiple changes to how we interact with others and communicate online (such as Facebook) the integration of search with social media via Facebook has been a long time coming and it is good to see Facebook execs starting to address that need. 

    Keith Trivitt
    Director, Marketing and Communications
    Mediawhiz 

  • Simon Baptist

    Thanks for the clarity on this Greg.  Two comments,

    1) Directional Ad Media
    Since the release of the Open Graph I have been continuing to test against typical Local directional media expressions of interest but they don’t really seem to be dropping through yet. I believe if Facebook fixed that, then they will be a long way towards solving this.

    2) Better Search
    If the vision of Facebook is to be a human-powered directory of people, places and things then they need to have a much better Search experience.  I continue to be frustrated with what is on offer, this is especially relevant to Local and the number of new businesses who start with a Facebook presence ahead of any other digital footprint.

  • http://blog.clayburngriffin.com/ Clayburn Griffin

    They don’t have a direction yet, though.  Other than their social graph (and how useful is that truly for search?) they have nothing innovative to offer.  Facebook Questions was a failed attempt at building a new foundation for search.  

    And again, as for the social graph with search, anyone using Bing Social?  Exactly.  

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