News Column

Purpose of Facebook's Graph Search: To Help You Buy Stuff

Jan 28, 2013
Facebook's Graph Search

Facebook's disappointing results in the display advertising business have now led to its efforts to become a search engine, called Graph Search.

Among social-media types, real-time search -- a dive into any aspect of the occurring moment -- has been something of a grail: a kind of responsive collective consciousness, a way to ever monitor the mood of the body politic.

But Graph Search is not that. Graph Search is about commerce. Indeed, all search is about commerce. This is not earth-shattering: We know that Google search, and Google's business model, is about helping match your interests with an ad.

What is new, and what Graph reflects, is that the entire digital world is more and more focused on helping you arrive at a purchase decision. Content sites and search sites, along with e-commerce sites, are converging precisely at this point and assuming this role: how to help you decide what to buy.

This might sound like just more digital shmigital -- Facebook's endless tinkering with its user data.

That's my failing, then. Because this is at least as important as, say, what the president said in his inaugural speech. More so. This is about real behavior and texture of ordinary life -- and it's about the nature and purpose of most of the information we receive. Why we know what we know will be precisely related to how we know what we want and how we get it.

A brief recapitulation: Digital media, with free access for everyone, was supposed to be supported by advertising -- it was a television model. But for many reasons having to do with information overload, how ads are displayed, the fleeting nature of the modern attention span and a more and more automated advertising marketplace, the margins of this business have continued to dwindle.

In a sense, advertising's bedrock idea, as a way to create desire, is now seen as inefficient. Search, on the other hand, can identity the desire that already exists -- and serve it. If you're a runner and you're cold, you know (and we know about you) that you need the latest in cold weather running gear -- hence, Patagonia can meet you right at the moment when you try to figure out how to stay warm.

That's what's worked, in slightly different ways, for Google and Amazon, the two -- the only two -- leviathan successes in the digital business.

But below those two kahunas, there is a second and third and fourth tier of purchase-focused sites quickly crowding in. TripAdvisor, with its user reviews of pretty much all the world's destinations, is now probably the single-most-important factor in a consumer's travel choices. Yelp works similarly with restaurants. OpenTable then books those restaurants. I wrote about ZocDoc recently, which works like OpenTable works, but for doctors.

Facebook did not begin in this business; it did not see itself as a retail facilitator. It has higher aspirations. But it's trying to quickly adapt. Now, its proposition is that you can bring your desires here and, out of the detritus of a billion people's digital doodlings, it can serve you back information that will better help you buy something. Its unique conceit is that because these people are your friends -- because this is social media -- you are more likely to do what they have done.

Maybe yes; maybe no.

That is almost not the point. The point is that this is what the digital business, whether you want to be in it or not, has become.

The idea that you might supply service or functionality or information or entertainment and that would attract an audience that advertisers would pay to reach is done. Now, your service, functionality, information, or entertainment has to meaningfully contribute to helping your user make a purchase.

Google does this and makes money because people still buy ads at the point of buying interest (looking up cold weather gear, for example). But it loses out on the real money, which is a cut of the purchase. Amazon does this by handling the transaction and taking its piece, but it loses out on the larger world of offline physical purchases that, more and more, mobile phones take you to.

Because we are talking about pennies or micro-portions of pennies, and we are talking about leverage and critical mass, you can't just play in your own sphere; you have to seek adroit positioning in every critical phase of the purchase process.

Google is developing Google Wallet, which will make it a direct participant in your purchase. And there is Square, the mobile credit card app founded by Twitter CEO Jack Dorsey. And there is Isis, a mega telecom partnership, in which your cellphone's SIM card will become your purchase agent and personal info collector.

This is a mighty confluence of data, curation (people telling you what to think), directed behavior and an ber (a very big word in digital these days) understanding of your habits and needs, and, as well, the payment mechanism.

The principle: He who helps the sale participates in the sale.

For better or worse, the big money in digital information will come when you use all that information -- everything you know about something and everything you know about someone -- to directly help ring the cash register.

In some sense, the entirety of free information (from your friends, from opinionated strangers, from the entrails of your data, from your shared personal tidbits, even the information that is actually produced by real writers) will become about pointing you to what you want to buy.

That's the game that Facebook, late to the party, is trying to play.



Source: Copyright USA TODAY 2013


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