Should Marketers Check In?

Should Marketers Check In To Location-Based Social Networks?

Location-based social networks (LBSNs) have been all over the media lately. Foursquare hit 2 million users. Twitter launched, revamped, and re-launched Places. CNNMoney partnered with Gowalla around its popular annual “100 Best Places to Live” list.  There’s even a social experiment -- PleaseRobMe -- that was started in response to the hype around this new social sharing technology.   So it’s no surprise that we’ve been getting a lot more questions from marketers lately about these services.  Marketers want to know who’s using these services, how often they’re using them, what they’re using them for, how marketers can get involved, and whether they should.

We dug into our research to try to answer these questions, and at a high level what we found is that just 1% of US online adults are using LBSNs weekly, while 4% of them have tried them at least once.  The sample size of this 1% of adults who use LBSNs regularly is small, so our findings on their behaviors are directional only, but our research shows that these users are typically young, male, well-educated, and influential.  In fact, LBSN users are 38% more likely than the average US online adult to say that friends and family ask their opinions before making a purchase decision. 

Given the directional breakdown of the users, it’s not surprising that marketers who are already dabbling with these services are those that often experiment with new technologies as a way to stay current and to reach key portions of their consumers.  But is it time for other marketers to start jumping on this bandwagon?  We don’t think so.  Though many LBSNs are gathering steam, the landscape is fragmented and the programs can’t scale just yet. But with large companies preparing to enter the market (I’m looking at you Facebook and Yahoo!), the time for marketers to get involved is coming.

For more details about users of LBSNs and our predictions and recommendations about the technologies and marketing opportunities, please see our just-published document, “Location-Based Social Networks: A Hint Of Mobile Engagement Emerges.”

In the meantime, tell us: Are you experimenting with these services yet?  And if so, what kind of results are you seeing?  If not, what kind of usership -- or other important benchmarks -- will you need to see before you put some brainpower and dollars behind LBSN marketing?

Comments

LBSN

I know that we are in the testing period to find the killer app, so to speak, that might incite businesses to develop a location-based that will really attract users. Alternatively, will this just be an evolutionary dead-end and a lot of hype? Another headline for the findings is that 75% of people who have tried an LBSN have rejected it. Time will tell.

Stickiness?

I agree that usage over time is going to be a big factor. So many cool applications turn out to be fads, so the ones with real utility that become indispensable for the user is what everyone hopes to find. We'll all just have to keep an eye on these LBSNs and see if they turn out to be one of those lucky few.

Myself, I think they are

Myself, I think they are exciting, for the right applications. We are floundering around now, both as marketers, communicators, consumers, and citizens. If it turns out to be the right channel to reach the right audience at the right cost , even if the audience is small, this has big potential.

Why I don't check in

Great post! I was interested to see that so many people who use LBSNs are influencers, though I'm not so surprised by it. Unfortunately, I fall into the tried it and rejected it category. Let me explain why though. I love Foursquare. For a few months, I was obsessed at being at the top of the leaderboard, keeping my mayorships and checking in to new places. Then my iPhone was stolen and I'm now back to a non-smartphone sans apps. My hardest adjustment? Not being able to check in. I've talked with a lot of people about this issue too. There's a whole market of us who want to play and get in on the fun but we can't because we don't have the technology. Sure, I can check in on my laptop, but I didn't have that with me at Fenway Park last week. These days we assume everyone has the ability to take part in LBSN, but that's just not the case. I think as the smartphone market grows, so will the number of people who participate in LBSN.

Cheers,
Marki

Hi Mark, thanks for

Hi Mark, thanks for commenting! I agree with your point about smartphone adoption. As more people purchase smartphones (and the expensive data plans that go with them) more people will participate in LBSNs. But currently, when you're at Fenway Park (and I'm a frequent visitor as well) how many people a smartphone? And of those people, how many want to check-in? It's a very cool technology, and very addictive, but smartphones are clearly a limiting factor.

Checking In at Fenway Park

FWIW, I think you could find a few Fenway Park premium seat holders who would be willing to check-in if it meant they could get beer delivered to their seat.

I'm a big fan of peanuts on

I'm a big fan of peanuts on game day! Check out this blog post and the corresponding picture. Mobile barcodes are an interesting idea for the entertainment and food service industry. http://www.gomonews.com/neustar-launches-mobilenextbigthing-blog/

I wish!

That would have been great if they had barcodes on the seats at Fenway! I was craving a Fenway Franks and waited far too long until the guy came around. I think it'll be a while before we see this fully take flight, but it will be loved by many sports fans!

Why LBS are Important

Several years ago, we developed a SMS service that would let hotels create their own custom SMS search for guests. The problem was, in order to support guests, you needed a way to log them into the system.

It turns out that Foursquare solves an interesting problem. When you check into a hotel on Foursquare, we can detect that and use that to establish the person is staying at, say, the RIHGA Royal, and use the dataset associated with that hotel.

I suspect that Foursquare's trajectory will look a lot like Microsoft Passport - it will discover, a bit late, that the real business model is a "federated identity" service that allows people to "log-in" and based on that secure authentication, give people access to services, information and resources. Microsoft Passport was the presumptive 800 pound gorilla, but we now work with services like OpenID/OAuth, Facebook Connect, and Google.

I am a fan!

While I had registered for Foursquare early this year, I had never really used the service until late May. I was passing through this little town of Salem in Tamil Nadu, South India. It was around 12 noon and my little kids were thinking of lunch. I had little knowledge of the place and was thinking if I would find a clean place to eat. It is then I booted up Foursquare... And not only was an eatery listed on it. But some Japanese tourist has added tips on what to try etc.

I have been an avid user ever since. Informing my friends on what to look for and warn them about things. The gaming aspect is like a topping, bringing a smile on your face from time to time. It is only a matter of time before more people find it useful for its sheer usefulness.

India has some 600 million mobile users of which about 10 million are smart phones. So it is only a matter of time when there will be a dogfight for Mayorships :)

Correction

600 million mobile phone of which 10% are smartphones (not 10 million)

Thanks

Niche is what the client needs.

Early adopters make the most of the bell-curve. The whole selling point of location based platforms is that they are niche, that you can target the consumer by intent and not just demographic.

Sure the adoption of a technology needs to be large enough by advertisers and consumers to make investment viable but the small to medium size businesses need to find niche paths to market or they are just coming up against the massive marketing budgets of the corporations where they have little chance of making an impact.

There is no doubt that geo-location will play a massive role in marketing, the early adopters are the 'geeks' but that has been the history of the technology of the internet.

Thanks, Zane. I agree that

Thanks, Zane.

I agree that niche is what some marketers need. Regardless of the size of the marketer, I think it's always important to have an understanding of the kind of consumer one can reach with different kinds of campaigns.

As for whether or not geo-location will play a massive role in marketing in the future, I'm not yet quite as confident about it as you are, but it's definitely an interesting are of development to pay attention to.

LBSN

... a few years ago, when car first invented, there were naysayers ... give this application a chance and its adoption and peoples' privacy concerns may be well-overcome by its convenience and future development ... way too early in game to foretell LBSN future.

Geo-location apps/games have

Geo-location apps/games have lots of potential, however, they're nowhere near where they could be. A lot of people give up on them because the points and mayorships are no longer enough (especially when so many people game the system). But is the reason they're not seen as useful because of the games themselves? Or because marketers have not yet seen and effectively implemented their potential.

Starbucks certainly tried with their Frappicino promotion, however, as AdAge reports, the promotion was less than successful. A large part of appears to be the lack of communication from Starbucks to their staff as several locations did not have a clue about the promotion.

Another aspect of this is the technology itself. While Google Maps can practically pinpoint your location, it's frustrating for a user to be literally sitting in the location they're trying to check in to and being told that they're miles away or that the system is currently unable to check them in.

While location based apps may prove to be a fad in the long run, they have not yet fully come into their own.

Thanks for your comment. I

Thanks for your comment.

I agree that these services are still very much emerging. There could be any number of reasons for this, as you mention. It promises to be a very interesting space to watch over the next several quarters. With luck and some well-crafted product and promotion strategies, we may see users signing up in droves. Without solving some of the technical and strategic issues you mention, well....the possibilities don't seem quite as rosy.

The Point of Experimentation

Melissa, thanks for the post. I agree, it's important not to get caught up in the bright shiny object that is LBS. But, it's equally important to not miss the forest for the trees. Just as Twitter and Facebook aren't the point of all of this, but rather a signal of an underlying shift that individuals, brands and technologies must pay attention to, the point of experimenting with location for marketers is to understand another element of this underlying change or shift in the brand/consumer relationship. These technologies are ways for brands to push the limits and experiment in this change. And, with location becoming a de-facto feature of most social networks by the end of the year, experimenting with these technologies now will put them that much farther ahead when the act of checking in becomes as common as updating your status is today.

I did a program at a recent conference with Gowalla and a client. Did we see huge numbers of people engage? No. Did we sell product through it? No. Did we make the front page of the New York Times? Almost. But, did we get out of the experiment exactly what we hoped for? Absolutely, and then some. The point of the experiment was just that - to see how a large brand could engage with people in a specific context using an emerging technology platform. We learned that you can initiate a response that drives people to an action. You can use technology to surprise and excite people around the brand. And, it is worth experimenting with these technologies to understand how your consumers use them, or don't. Because we now have a better understanding of how the brand can play in this space in a relevant way, location will be included in next year's program, but in a new way that pushes the boundaries again.

As much as it seems that I'm a location-based fan boy, I'm not. I am a fan of pushing the boundaries of what was thought possible to see what happens. LBS is just the next toy to play with. And, it won't be the last. @bradmays

Managing Expectations

Thanks, Brad.

You've certainly hit the nail on the head with what can make this-- or any kind of experimentation-- work for marketers: setting expectations for objectives and results. For companies that have the time, resources and budget to experiment, "new toys"- as you excellently put it- are always fun and often useful to play with.

Aggregation

Congrats on sparking such an excellent debate. I'm sure we'll look back on this report as a key moment in time for LBS and location-based marketing.

You cite the two key issues that the http://www.MomentFeed.com solution addresses: fragmentation and scale. We discuss this in our whitepaper, From Hype to Holy Grail: Location is the New Frontier in Digital Marketing.

How will these issues resolve themselves? For the most part, they won't. LBS will continue to become more (not less) fragmented. But scale will eventually be there with a few services. It most certainly will be there in the aggregate. In some ways, it already is with certain demos and geographic areas.

I love to check in with my

I love to check in with my 4Square. My friends and I compete to get mayorships.
But I think that besides us being early adopters of these services, that there would be a marketing benefit for venues to also adopt.

The mayor's badge would be much more fun, if I as a supporter of a Mexican Cantina that we frequent would be offered incentives or upsells via the tool to reward our continual return.

So I definitely appreciate seeing the "specials nearby" as not only a savings opportunity, but also to see which venues and businesses are adopting.