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Comment : Facebook and search. Silver bullet or dead donkey? / Paul Mead,VCCP Media

By Paul Mead, Managing Director of VCCP Media

Mark Zuckerberg generated some headlines this week by saying that ‘at some point’ Facebook wants to be in the search business.

Speaking at the TechCrunch Disrupt conference in San Francisco, ‘The Zuck’ said that Facebook is generating around a billion queries a day already ‘and we’re not even trying’. His comments pushed the Facebook share price up by more than 4%. So could Facebook be a Google killer? Is search the answer to its share price malaise?

Facebook certainly has the audience and a billion queries a day, if that’s accurate, is an impressive number. But if it were all about volume of users then Facebook would already be a bigger business than Google. The intent of users on Facebook is different to those on Google. But that is the sole reason why Google finds it relatively easy to generate forty billion dollars in revenue every year from its advertising program and why Facebook finds it relatively difficult to achieve one tenth of that.

The audience is the same on both websites, the same people who use Facebook use Google and vice versa. But user intent changes everything and the challenge for Facebook is that they may find it very hard to ever get around this fact.

Billion queries

Let’s go back to the billion queries that Facebook generates every day. People are looking for people on Facebook, not products, not services and not brands unless they are pushed or incentivised to do so by other activity, so the queries inherently have a much lower commercial value and being a walled garden they will always be several steps from a shopping basket.

Facebook has developed a number of different advertising products but they have to be push not pull (unlike Adwords) and so it always feels like they are tip toing around their user base trying not to annoy them with too many ads. Fundamentally Facebook users don’t want ads, they don’t want to be friends with brands and they don’t want to get into a conversation with a washing powder.

So Facebook has a fundamental challenge in commercialising its user base, because of their intent. Google can’t get its users to engage with its social networking product and despite several attempts, not many of us are forsaking Facebook to create ‘circles’ and have ‘hangouts’ on Google+ with our friends (real or imagined). And therefore how excited should we as marketers be about Facebook and search?

The Zuck was very careful to point out that if Facebook did move into the search space it would not be with a copycat Google product but it would focus on the space where search is evolving. It would be a product that would build on Facebook’s stengths of social data and the huge potential of referral and recommendation from people in your social circle or those you trust.

Unrivalled in its potential advertising value

Will Google lose any sleep over this? Facebook’s plans in search are as much a threat to Google as Google+ is a threat to Facebook – i.e.

Facebook has an incredible user base and a data set that is perhaps unrivalled in its potential advertising value. Imagine layering the Facebook demographic, location and social data with recent search and other behavioural data sets that we can already integrate through our DMPs and DSPs to laser target your audience? The privacy issues may mean this potential is never fully realised but what’s happening right now is already an intriguing prospect where we can give Facebook cookie data to retarget on their platform.

Google and Facebook are advertising funded businesses and in that respect Google will always have a distinct advantage. Google lives much more towards the ‘business end’ of the purchase cycle than Facebook and even its announcement this week that it is to charge advertisers for product listings in Google Shopping and at the same time drop an extra billion dollars of revenue onto to the balance sheet overnight is frankly the stuff of dreams for Facebook.

From an investor point of view Facebook could and should have done a lot more to generate revenue. Facebooks share price is based on the fact that whatever its mistakes very few companies are in the position it is in to benefit from cracking some of these challenges.

If we are talking about direct response and I’m being very pithy, I tell my team that Facebook is where you go to find Google users when they don’t want to buy anything.  By Paul Mead, Managing Director of VCCP Media

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