Facebook Drawing Marketing Money Away From Google And Foursquare?

Facebook doesn’t want to leave anything on the plate for others. The Facebook Places feature was launched not more than five months back, but within such a short period of time, they started outbalancing the so called pros in the arena like Foursquare and Gowalla.

That’s what Financial Times points out in their official blog. The blog post reads, “Facebook Places, launched just five months ago, already appears to be sucking marketing dollars away from needy location-based startups such as Foursquare and Gowalla.” It refers to a report from Merchant Circle, a platform for small business to share the news in their marketing domains.


Merchant Circle made a questionnaire and presented it to different local business owners. The responses that came from around 8000 such business owners suggest that group buying sites like Groupon and Living Social aren’t doing well for their marketing when compared to social media and web based advertising outlets such Facebook and others. The report also shows that Facebook tops the list and is preferred over Google for marketing online. Twitter, which is a favourite platform for brands, comes way below at 7th spot, while LinkedIn is at three.

The interesting thing is, the model behind Facebook Places is similar to Foursquare and Gowalla. In fact Facebook Places is an imitation of those. But still they are outnumbering both Foursquare and Gowalla. One reason can be that the local business owners must have already had pages on Facebook. Since, Facebook Places feature will notify users about local deals based on their check ins, to promote their business, the local merchants are now just shifting to the places category.


The survey shows 32% local business owners are currently promoting their brands through Facebook’s new feature and 12% will join the club over next few months. Too bad for Foursquare and Gowalla as the former bagged only 9% and the latter only 3%. Financial Times declares Facebook as a formidable threat to them, “The survey results should give the Foursquares of this world plenty to ponder about their business model and the threat from Facebook. They may also be discouraged by the amount of dollars local businesses are willing to spend on marketing, with 72 per cent spending less than $5,000 a year and those spending less than $1,000 accounting for 34 percentage points of that.”

Editor’s Note: Things in India seem to be a little different though. Though research from Google suggests that over 50% SMEs believe that Internet Advertising is cost effective, other reports claim that Email and SMS marketing are looked at as important channels. Incidentally, just yesterday Coffee Day announced (via Tweet that linked to Facebook) that it was first Indian Brand on Foursquare. With Facebook Places just beginning to make its entry into India – things could get very interesting. What do you think will happen?

(This post was cross-posted from SocialTrakr – Facebook Places Crushes Foursquare As Facebook Takes Down Google)

One Response to “Facebook Drawing Marketing Money Away From Google And Foursquare?”

  1. February 24, 2011 at 2:49 am #

    I only use facebook for advertising. It’s the cheapest and most targeted form of advertising out there right now.

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