Facebook Places, Google Places Vie for Local Ad Spend

By Clint Boulton  |  Posted 2010-08-22

Facebook Places, Google Places Vie for Local Ad Spend

The Facebook Places check-in service should pose a strong challenge to Google Places once local businesses begin advertising through it, experts believe.

The services ultimately share the same means to a financial end in making ad dollars from connecting local businesses to consumers using their smartphones to navigate city streets.

Google Places is a local business owner's advertising vehicle for the Web. Facebook Places plays to the social side of the coin to help people share information about each other, but it has great ad potential.

Formally named the Google Local Business Center, Google Places lets restaurants, tanning salons and other service providers list information about their establishments on Google Maps.

When users do a search for a local Starbucks, they can click on its Place Page and see store details, as well as ratings and reviews of that specific venue. Businesses may even choose to provide a small yellow call-out in their listing for $25 per month through a program Google calls Tags.

But Google Places has no true social element to call its own.

Google has fashioned its Google Latitude friend-finding service and Google Buzz for mobile to leverage Google Maps, but there is no glue between these products, no network of people to entice other users to connect and share information.

Facebook Places, meanwhile, is a location-based platform that lets users check in from a restaurant, bar or some other local joint and tag their friends so that other friends can know what they're up to and possibly meet up.

Facebook's service is available in the United States only for now, covering 125 million people, but in time Places will serve the network's 500 million global users.

Where Google Places is about information and advertising first, Facebook Places plays up the idea of connecting friends with a strong plan for local advertising lurking in the background.

At launch, the company didn't play up the advertising component. Indeed, Facebook told reporters it didn't it didn't have specific plans in mind to make money from Places.

Analysts Discuss Facebook, Googles Places

Still, it's clear from this document the company was downplaying its potential. Facebook sees Places as a platform with unlimited ad potential. The introduction notes:

"Facebook Places provides a presence for your business' physical store locations, encouraging your customers to share that they've visited your business by 'checking in' to your Place. When your customer checks into your Place, these check-in stories can generate powerful, organic impressions in friends' News Feeds, extending your brand's reach to new customers."

That "organic" advertising has promise, but it's more of a casual shout-out to brand exposure until businesses begin registering their own Facebook Places.

Google Places has more than 4 million local businesses using its service. Facebook Places is a new entity that will require time to foment, analysts say.

"At present Google Places and Facebook Places are largely distinct products," industry analyst Greg Sterling told eWEEK after publishing this piece on Facebook Places on Search Engine Land.

"Facebook Places is of limited utility as a 'local search' tool today-just as 'search' on Facebook doesn't work well. Places is much more an extension of Facebook's core functionality built around physical locations, while Google Places has limited social functionality."

Over time, Sterling said Facebook Places will gain advertising dollars from small and larger businesses, which will put it in a more competitive position against Google Places as a primary point of presence on the Internet.

Sterling believes it's only a matter of time before Google adds social content or features to Places.

Forrester Research analyst Augie Ray agrees, pointing to Google's rumored Google Me social network as a way Google Places may be infused with social tools. This would thrust Google and Facebook into more fierce competition.

"To date, the way Google Places has worked doesn't seem quite as competitive to what Facebook intends, although it's easy to see how the race to 'own' the digital representation of a real world place can bring Facebook and Google into competition.

"If that happens, then Google and Facebook will very much find themselves competing for both user adoption and localized ad dollars."

Sterling said the local advertising and location-based services market is large enough for multiple successful companies.

"However, a well-executed [Facebook] Places could command a great deal of consumer attention and mindshare," Sterling said.

"Ultimately, rather than a zero-sum game, it's more likely that Google and Facebook Places will co-exist as two complementary sites and toolsets for consumers and marketers."

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