With recent news that Google is more forcefully entering the social realm byintegrating Google+ into its results, what about Facebook? What impact could it make in search?
While Google and Facebook have a very similar number of users, there is a notable difference in the revenues they extract from their users. Google makes over seven times more money, pulling in $29.3bn a year while expert estimates (Facebook is still privately held) puts Facebook’s ad revenue at about $4bn (this year).
Search is, quite simply, the best game in town, commercially speaking.
Why is search so lucrative?
Research conducted by Greenlight found that 50% of Google users have clicked on a sponsored listing in Google at least once and equally, 50% of Facebook users have engaged with Facebook advertising to the same extent.
This means that users have similar attitudes towards Google as they do towards Facebook advertising.
This would suggest that Google’s huge comparative returns from advertising come from the fact that people will simply click far more frequently on Google ads than they will do on Facebook ads. This is all the more impressive when you consider that the average user will spend almost five times longer on Facebook than on Google.
This disparity isn’t unexpected of course as Facebook users aren’t necessarily in ‘search mode’, whereas with Google they are in that mode by definition, unless they are conducting a navigational search.
Essentially, Facebook is a destination more often than not, whereas Google more closely resembles online transportation, hence the greater propensity to click out to somewhere else.
In this regard Facebook’s advertising model is closer to that of a publisher’s than that of the search engines (but with ordinary people being the content creators).
Search traffic, therefore, on a per unique user basis, is currently far more lucrative than social traffic as one inherently encourages people to leave its properties, and gets paid when they do, whilst the other is inherently designed to keep you socialising there, in long and frequent sessions.
The Holy Grail would be to enjoy the benefits of both models.
How much of the search market could Facebook actually take?
Our research found that, of 500 respondents, 5% would ‘definitely’ use a future Facebook search engine if the firm were to launch one to rival Google’s .
The other extreme, those categorically saying that they simply would not use a future Facebook search engine, totalled 26% of all respondents.
Those responding in the ‘Definitely’ and ‘Probably’ camps totalled 17%. Those responding ‘No’ and ‘Probably not’, totalled 48%.
These stats therefore suggest that Facebook could capture around 22% of the global search market by simply launching its own search engine tomorrow morning (the ‘Definitely’, ‘Probably’, and half the ‘Don’t know’ respondents added together).
It wouldn’t need to be a spectacular engine either, just well integrated into the Facebook experience and generally competent.
This 22% market share would make Facebook the second most utilised search engine in every major market except for China, Japan, and Russia, where it would occupy an uncontested third place.
Obstacles to further growth
The survey results also suggest that Facebook could increase that projected market share to a maximum of 50% within a few years by converting the least overtly loyal Google users over to them.
That increase would need to come from the 27% of respondents who replied ‘Maybe, but only if it was better than Google and Bing’. However, to do so it would need to contend with five main obstacles.
1. Google’s market share & searcher inertia
Google’s market share is at the 60%+ mark in the US and over 90% across Western Europe. Our global research shows that 77% of internet users only use one search engine and that 97% of respondents use Google for at least some of their search needs, and 80% of them using Google exclusively.
Even if a viable contender were to materialise, it would have to combat significant market share, loyalty and therefore very high levels of switching inertia.
2. Google’s user satisfaction levels
93% of our survey respondents said that they ‘almost always’ or ‘usually’ find what they want when they use a search engine.
Given that this is the main purpose of a search engine, we can assume that this is a very high level of consumer satisfaction. This coupled with Google’s 83% ASCI score in 2011 (up from 80% in 2010) , suggests that people are incredibly happy with Google.
Facebook, on the other hand, came in last with an ASCI score of just 66% (up from 64% in 2010), putting it in the bottom 5% of all measured private sector companies, in the trench with cable companies and airlines. Arguably therefore, Facebook still needs to get its own house in order before trying to ransack Google’s.
3. Google’s strength in mobile
Our survey respondents stated that they use Google twice as much as they use Facebook on their mobile phones. YouTube incidentally came third.
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Given the growing importance of smartphones this is an important finding which, coupled with Google’s Android and Motorola Mobility interests, could be quite an obstacle for Facebook to overcome.
4. Google’s control of the browser
Google is also incredibly strong on the desktop. For 60% of our survey participants it occupies the powerful position of being their default browser homepage.
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Facebook only occupied this role in 3% of cases. Google’s market share in search is therefore behaviourally consolidated, which again makes them difficult to displace.
This is before taking into account Google Toolbar installations, Gmail, and Chrome usage which consolidates its power on the desktop still further.
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5. Google is trusted far more than Facebook
We asked our survey participants which brands they trusted or mistrusted and to what degree. Apple, unsurprisingly, was the most trusted. The second most trusted, and not by a particularly huge margin, was Google.
Google is then followed by Microsoft/Bing, Yahoo, Facebook, and then Twitter. Google being far more trusted than Facebook is mirrored by other studies too.
This implies that hearts and minds cannot be moved so readily away from Google. Having said that there may be a difference between the notion of trust and actual trust; people still entrust Facebook with more of their personal information than anyone else.
In search therefore, Facebook faces a dominant competitor that people are satisfied with, that they trust, and that is embedded in the desktop and mobile experience. Furthermore, it is a competitor that has invested in key assets to consolidate those advantages, such as its ownership of YouTube and Motorola.
Also, it cannot be assumed that Google will simply stand still if Facebook were to cross its borders. Google would respond quite forcefully and it has a number of ‘irons in the fire’ to do just that.
What can Google do to respond to such a move by Facebook?
There are three areas where Google could respond if Facebook were to become competitive in the search space.
1. Google+1 has more coverage (and therefore) potential than you might think
28% of respondents had no idea what ‘+1’ meant even when told it was Google-related. In addition, of those that knew what +1 meant, 27% had never +1’d anything before, and another 18% had rarely done so.
However, 23% of Google users stated that they either often (12%) or regularly (11%) +1’d listings in their search results.
Whilst 23% sounds quite low, Google+ is still fairly new and, given Google’s sheer number of users, that 23% equates to a considerable quantity of personal recommendations and information that could come in useful to Google if it wanted to take the next step and make its products far more social.
This doesn’t assume that Google can replace Facebook, simply that it potentially could amass enough personal data to consolidate its position by owning ‘social search’.
To put this into perspective, whilst 23% of respondents were ‘often’ or ‘regularly’ +1ers, the percentage of Facebook users that ‘liked’ a brand or company ‘regularly’ or ‘often’ stood at 35%.
This is not significantly greater when compared to Google’s social signal collection, particularly as it has only now begun to force +1 onto the masses with the redesign being currently beta tested.
Furthermore, Facebook does hold far more of our most personal data than Google, but we cannot assume that it will be allowed to collect and use that personal data without limitation in the future.
If our respondents are indicative of the wider trend, there are trust issues here that may limit that data collection or exploitation significantly in the short to medium term (see below).
2. Trust
As stated earlier, all research suggests that Google is far more trusted and less distrusted (there is a difference) than Facebook is.
Whilst Google has been criticised for many things, like scooping up data from unprotected WiFi routers, we forget that this isn’t the Google that consumers know and experience.
For them Google is that super fast search engine that has cute seasonal logo doodles and that has been their faithful servant for a decade, with the brand equity this comes with.
Facebook, on the other hand (and like Twitter), has yet to form a clear corporate identity and so, with regular criticism by the press, is deemed somewhat amoral.
Facebook could have done more to build a trustworthy identity, but it has unwisely left it to The Social Network movie to give people their main perception of Zuckerberg and therefore the brand by extension.
As Dan Tynan wrote in IT Week in July 2010,
[Zuckerberg] looks like the kid who left a flaming bag of dog doo on your front stoop and now just denies, denies, denies it
Only last month John Crace, writing for The Guardian reviewed an aired interview with Zuckerberg, when he referred to Facebook as ‘...truly the Heart of Darkness’.
For a business that needs your personal data to exist, this isn’t the most desirable perception.
In contrast, Google’s ‘Do No Evil’ slogan at least tells people they are willing to be held to that ideal. We can see this in how Google, like Apple, responds very quickly to criticism, whereas Facebook takes it’s time.
Google and Apple represent something, even if they don’t always get it right, and they communicate their identity to their consumers and to the press regularly and single-mindedly.
This can’t really be said of Facebook and Twitter and, again, that isn’t an attack on them. They are very young businesses that have grown rapidly so they won’t have had much chance to generate an identity and therefore engender trust with the consumer.
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That said, if Google can hypothetically maintain this higher ground and if Facebook descends further into this negative territory, it could provide the tipping point for Google (or someone else) to not beat Facebook per se, but perhaps hold it back from growing or expanding away from its comfort zone.
3. The importance of price comparison
Survey participants were asked how helpful five information sources typically are to them in their purchasing decisions online.
These were:
• Recommendations made by their Facebook friends.
• Recommendations made by sector experts.
• Product reviews from across the web.
• Price comparison websites.
• Offline sources.
Participants were asked to rate these using a five point scale according to their importance when in pursuit of electronics, travel, and insurance products.
For all three products, the recommendations of their Facebook friends were considered the least useful to them and in fact half as helpful as the next least useful source.
For travel options and insurance, price comparison sites were the most useful and helpful to the respondents. For electronics, price comparison was the second most useful after reviews by experts and professional reviewers.
This suggests that Facebook is less important when making purchasing decisions than many of us may have assumed. People would rather use price comparison sites to aid their decision making for key products than ask their social network.
This implies that social networks have far more of an impact on branding and PR, than they do in people’s immediate purchasing needs.
On the other hand, price comparison is the most decisive information source when it comes to making purchasing decisions.
Google seems to agree as can be seen in their dogged and controversial efforts to disintermediate aggregators through the introduction of their flight search (example below), finance search, and more within their search results.
This puts Google in a great position as, with price comparison capabilities, it can add +1 data, product review data from the wider web, and expert reviews through authority scoring, all of which it already has access to.
This would make it even more central to purchasing decisions made online than it already is. The power of Facebook’s closed social network would struggle to compete in that specific area.
This represents an area where Google could utilise social signals through Google+ perhaps more effectively than Facebook can utilise its own social graph in that area.`
COMMENTARY: I like these survey's, but they are a bit too inconclusive, since you are dealing in theoreticals. I would venture to say that people are creatures of habit, and when they do an online search for something, they use a well established and reliable search engine like Google, BING or Yahoo. I also disagree that all Facebook needs to do is offer a "good basic" search engine. Google's search engine is highly advanced and sophisticated allowing you to search for sites, images, videos, and even finds locations using Google Maps. It also features a Quick Search Box or View, Image Match, and specialized search tools for finding medicines, patents, and so forth. It would take Facebook years to duplicate Google's search engine feature-for-feature and specialized search tools. Also, let's not forget that Google is the predominant search engine on browsers by a lot shot. I jsut don't think Facebook could ever compete or capture a significant share of the global search market. It's a bit too simplistic to assume that Facebook could capture 22% of the market based on a one-time survey like this. It could take years to do that, and the search engine would need to be better than Google to get people to switch and use it as their search engine of choice.
Courtesy of an article dated January 12, 2012 appearing in Econsultancy
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