NMK contributors react to the launching of Facebook’s Graph Search

By Magda David Hercheui

Digital marketing professionals and the digital industry as a whole is trying to analyse now the impact of Facebook’s launch of Graph Search. New Media Knowledge has received a few contributions on the topic. See the first reactions from market analysts and professionals below.

The new tool enrich Facebook platform

Following Facebook’s announcement of its launch of Graph Search, Eden Zoller, principal analyst at Ovum, has the following comment:

"Before the arrival of Facebook’s Graph Search, the search function on Facebook was basic and as such, a wasted opportunity given Facebook’s imperative to strengthen advertising revenues. Facebook Graph Search will no doubt leverage member data to provide advertisers with more targeted, personalized advertising opportunities going forward. But Facebook needs tread very carefully here and be mindful of user privacy. It claims to have built Graph Search with privacy in mind, but Facebook has a mixed track record on this front and is in the habit of pushing privacy to the limits of what is acceptable.

"Facebook Graph Search is not a web search engine, but a search tool designed to enrich the Facebook platform and experience for both users and advertisers. This is sensible as a full blown web search engine from Facebook would inevitably have to compete with Google search, and given Google’s dominance of the search market it would be hard for Facebook to make a serious impact – and win advertising dollars."

Scale and deep level of user engagement

In response to news, Dominic Trigg, managing director Europe at Rocket Fuel, comments:

“For advertisers, Facebook is rapidly becoming one of the best places to reach an audience – it has scale and a deep level of user engagement. This new feature should bring search and rich display together – something we haven’t really seen before at the scale that Facebook can offer. This means the ability to better engage users when they are searching, but also to target messages more precisely so that users see advertising that is relevant to them. All this serves to increase Facebook’s attractiveness to advertisers.”

“Facebook have multiplied the overall size of the RTB market with the launch of FBX, providing high quality inventory that is brand safe and extremely targeted, impacting the overall advertising ecosystem. We are particularly excited to see how Graph Search develops within Facebook’s overall offering. We are sure this is will be a positive development."

Rocket Fuel is one of the Facebook Exchange’s first approved RTB partners.

Strategic implications

Commenting on Facebook’s announcement, Victor Basta, managing director of Magister Advisors, M&A advisors to the technology industry, said:

“People are completely missing the importance of this announcement. It positions Facebook as a much more significant strategic threat to Google than it has been to date. Facebook has effectively rolled Amazon, TripAdvisor and tribal search engine capabilities into the ecosystem in one fell swoop.”

“This is far more important for Facebook’s mobile strategy than simply doing a Facebook phone. Graph Search will be key to generating revenues from Facebook’s hundreds of millions of mobile users through super-value, highly targeted search. To date it has been very difficult to serve up advertising on a small screen. Search is really the only way to do it.“

“Graph Search potentially sets up Facebook to generate the billions of dollars of revenues that it needs to achieve to underpin its valuation. Google gets more than 90 percent of its revenues from advertising and search drives advertising, so this is really the only way that Facebook can take revenues from Google.”

“People are saying Facebook has reached a saturation point with users, but they’re missing the point. This is all about generating revenues from existing users. The ramifications of this innovation for Facebook and its competitors are very significant indeed and will be felt for years to come.”

Graphic analysis

Crimson Hexagon, using its social media analysis platform ForSight, has analysed the conversations on Twitter surrounding Facebook’s Graph Search announcement, last week. The ForSight platform has almost 200 billion posts stored in its database, and analyses around 300 million new posts per day. For this analysis, Crimson Hexagon’s ForSight platform analysed 149, 064 relevant Twitter posts around the general sentiment, privacy concerns and the implications for competitors and the business world.

The findings include:

34% of users were sharing news about Facebook’s Graph Search

32% discussed the business implications and competition element

19% were expressed concern over privacy issues

9% of Twitter users felt the idea was cool and innovative

5% of users thought the news was trivial and/or disappointing

Privacy

David Gibson, Varonis VP of Strategy, sees great potential in the tool, but he is concerned on privacy issues:

“This is a very exciting step for Facebook. They are now allowing their user community to harness the power of all the metadata they’ve been collecting – and it is this metadata that allows context. For example, the difference between a Google search for a restaurant and a Facebook search is that Facebook has “like” metadata— who liked the restaurant, and what makes their opinion matter? The search engine with the most complete and most accessible metadata usually wins. As a parallel, Varonis has seen that knowing what a file contains is one thing, but when you know who uses that file and who has access to it as well then you have an advantage.

”Facebook will be able to use metadata to put opinions into context and answer questions like: Which of your Facebook ‘friends’ liked something? Which ones that went to culinary school liked it? Which like other restaurants that you like? By combining that ingenuous bit of metadata— the Facebook “like”— with where people live, what schools they’ve gone to or where they work, you’ve got a very powerful way to analyse which people like which stuff. Google right now has location data and some reviews, but doesn’t really have the dimension of who is liking what, and how those people are relevant.

“From a privacy standpoint, however, it’s a little scary how easily something you once posted on Facebook can be resurfaced with a quick query. This is especially unnerving considering how privacy settings on Facebook are notoriously confusing and prone to human error.”

About the author

Dr. Magda David Hercheui is a senior lecturer at Westminster Business School. She lectures on information management, project management and digital innovation. She is a researcher on social media, virtual communities and collaboration, and a consultant in her area of expertise. Magda has also been the editor of New Media Knowledge since 2009.

http://www.linkedin.com/in/magdadavidhercheui

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