Australian SMEs have been warned to get on top of their Facebook Places accounts, after the social network launched a new feature yesterday built deliberately to compete against online review sites and increase its prominence in the “local” space.
The move was so obviously disruptive that shares in Yelp, the leading online review service, fell by 3% yesterday after the announcement was made.
And Australian businesses are being told to get on board.
Facebook will debut a new feature called Facebook Nearby, which will initially roll out to a small group of users today and then increasingly to everyone over the short term. The new features add the ability to give a star rating, and “like” nearby businesses, alongside the existing check-in function.
Local mobile experts are once again warning SMEs to get their act together on Facebook, especially as it starts pumping more capability into the crucial mobile platform.
“It’s all about the mobile,” says Reseo chief executive Chris Thomas. “It’s a big step for Facebook, and they’re starting to make the platform even bigger.”
Facebook Nearby brings several key changes that will affect how users find local SMEs, and thus reflect how important it is for those companies to get on top of their social status.
Instead of just seeing a group of businesses in Facebook Places, the app will now provide users a list of businesses it thinks you’ll be interested in. Those listings will be curated based on how many “likes” your friends have made, or how many times your friends have checked-in to a certain company. Businesses will also be curated based on star ratings.
That in itself is a big shift, but there’s more. Businesses can now be found through categories and sub-categories, and a summary page provides information such as which of your friends have “liked” a company, and its average star rating.
A new Facebook Places design also shows a new set-up for contact information, opening hours and other information.
The changes will affect SMEs in a big way. Until now Facebook Places have been presented to the user in terms of distance – now they will be chosen based on your friends’ activity. The more people who like your business among certain social circles, the higher your business will be presented in the Places search results.
This is essentially how the News Feed operates. The more times a story is “liked”, the more likely it will appear in your feed.
This is a question Facebook has wanted to answer for some time: How to use friends’ activity to affect buying decisions? Recently, chief executive Mark Zuckerberg pondered at the Disrupt conference that Facebook is able to answer questions that a normal search engine can’t answer – like how to track friends’ activity.
The disruptive nature of this new feature is obvious – Yelp shares dropped 3% after Facebook made the announcement. While Yelp is important in that it curates reviews and affects search engine optimisation rankings, it doesn’t actually help users find businesses their friends are using.
And as Chris Thomas points out, it could be a potentially lucrative avenue for advertisements. Facebook has struggled to make mobile profitable.
“Maybe they could start charging businesses for higher listings,” he said.
But while Yelp took a hit yesterday, StewArt Media chief executive Jim Stewart told SmartCompany the local victims are likely to be apps such as those which curate restaurant reviews.
“It is primarily geared towards the consumer and retail market. We should see a resurgence in businesses wanting to get customers to check-in and leave a review,” he says.
“If you are in retail you should encourage this and make sure you’re giving customers a reason to do so.”
Stewart points out the simple check-in feature had been abused for some time, with users making up their own names – even for fake places – and voting on them for laughs.
Now, he says, the experience will be more sophisticated. In particular, Stewart argues hospitality companies should really be paying close attention.
“If your restaurant has more favourable reviews from people in my network I’m more likely to visit you than one that doesn’t.”
“This is primarily a mobile experience. Any retail business that relies on custom from people out and about should pay attention to this.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
