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Comment by ig1 | Hacker News Reader

Local advertising is a $100 billion/year market in the US. Facebook are better positioned to take that market than anyone else.

Local leafleting has a reply rate of about 1-2% but costs 200-300x as much to reach the same number of people, which means you only need a 0.005 response rate on Facebook to get the same value. A decent Facebook ad campaign will have a response rate around 0.08 - 0.1. That implies facebook advertising is 15-20x more effective than leafleting. Facebook ads might convert less well, but I doubt they convert 10x less well.

Local adverts on Facebook make sense, it's just a case of making them easier to use and selling local business on the idea.

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I just don't see it. I live in San Francisco and I need, say, a plumber. Do I:

1) Go to Google and type in "Plumber" (a search that is already localized to SF and shows plumbers near me right away).

2) Go to Yelp (or another similar site) and do the same search to find more review-based results.

3) Go to a social network...

Yes, there may be some cases where FB is better (for example, if I don't even know that there is some local service I should check out) -- but those seem pretty rare.

It actually honestly depends. If you have lived in a given city long enough that most of your friends also live in said city, FB gets bonus points. If you extrapolate into the future for Google sucking even more than it does now, Google loses points. Yelp is crap in the first place (taking bribes etc).

So if plumbers are like mechanics and you have to find one that's happy and good and trustworthy, you might actually be more likely to ask your friends than Google, especially if Google is a corporate spamwhore.

But if you own a carpet cleaning service in San Francisco and want to reach a lot of new customers, do you:

1) Buy some PPC ads via Google and maybe a few new customers will trickle in via searches

2) Do a groupon, possibly getting a huge influx of business BUT at a 50% discount and giving groupon half the proceeds

3) Pay for a Facebook "Flyer" targeted at San Francisco home-owners that have a dog or cat, offering them a 20% discount ...

I think when you look at it from the POV of the business doing outbound marketing, Facebook has more opportunities.

Of course, FB has to be careful not to turn the system into a huge coupon-book and alienating users by the hundreds.

You do 1 because it's cheap and because it generates results.

If I search for "carpet cleaning in san francisco" on google I see 3 ads. I suspect that those ads are responsible for a fair amount of business to those companies, explaining why they pay google for the advertising.

The difference between ads on google and ads on a social network is that ads that are relevant to your search are actually often desired and far more likely to be used. If I'm searching for a carpet cleaner in san francisco then ads of such kind are useful to me. In contrast, ads embedded in social networking sites are distractions from the activities people engage on there. If some carpet cleaning company pushes an ad on me because they've discovered I live in the area and/or have pets I will more likely than not think "ugh, who are these assholes?" or perhaps "maybe I should install ad block". When I actually need a carpet cleaner I'm not likely to think "hey, I should use that company that keeps annoying the crap out of me on facebook", instead I'm likely to go to google, search, compare some reviews, and pick a company that seems decent and inexpensive.

Look at the leaflets that come through your door, why are they leafleting rather than just advertising in yellow pages ? - it's because for a lot of services people don't actively look for the service but will use it if prompted by advertising.

Sure people who are actively looking for a service are more easy to sell to and I'm sure Google, etc. will make a lot of money from them. But they're only a small part of the overall market.

I don't think Facebook will earn a lot from that market. I think it will be huge in advertising in large media sites though. And small. The like button is on every blog and every news site. These sites have ads today, and Facebook should be able to show way better ads than are on these sites today.

I still don't think it's a good long term investment, but they should be able to sell a lot of ads the next few years.

If anything, Yelp and Groupon are better suited at taking that market than Facebook. They already have the built-up salesforce and relationship with local vendors. Not to mention for local advertising, mobile is where it's at. And Facebook would have to play nicely with Android and iPhone. Think Google or Apple will let Facebook anywhere near the sweet center of local advertising?

I am afraid, if FB decided to chase Yelp, they would significantly reduce it. All they need to add are check-in stats and start rating with user profiles who visited a place. It'd almost work better than the subjective long Yelp reviews: just from looking at the public view of people's profiles who visited, and the star ratings they gave, I could figure out what kind of crowd likes/dislikes a certain place. Also, the amount of check-ins would be massive, if I was able to see all check-ins, even out of my network.

Does anyone else see checkins on FB? I never see any. When it was released I saw a few here and there, but I haven't seen one in months.

I see Yelp checkins on Facebook. And I see people's foursquare checkins imported from twitter.

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