Nick Cifuentes

In a just-released Forrester research report, it said that most marketers should refrain from location-based services, citing that just a mere 4% of the US online adults have ever checked in on the “location game.” And only 1% update these services more than once a week.

The study revealed some interesting statistics, as it looked at a large number of location-based sites, including popular players such as Foursquare, Gowalla, MyTown and Loopt. And to add to the study, a whopping 84% of respondents said they had no idea or were not even familiar enough with such types of apps. This study comes at an interesting time, since 2010 was marked the year of location-based services, igniting fires under social media marketers - all trying to integrate location-based strategies into their marketing programs.

And to add to the bottleneck, the report said almost 80% of location-based service users are male, with close to 70% of them between the ages of 19 and 35, and 70% have college degrees or higher. Forrester also discovered that 38% were more likely to say friends and family ask their opinions before a purchase, in addition, this crowd was very open to mobile coupons and offers as well. This vertical is also more resourceful with research prior to a purchase where nearly 20% are more likely to consult their phones before buying to conduct more research and read customer reviews.

Location-Based Reality Stinks?

This certainly brings most marketers back to reality before jumping on the location game bandwagon.

Although this data cuts down a very small segment to target, it’s still very approachable when you consider products that live in the gaming, consumer electronics, and sportswear verticals. These are the verticals that lead the way with testing these applications, according to Forrester. However, the location space is full of brands that are already proving they are not just for the male audience. Big players such as Starbucks, Oil of Olay, Bravo, Gossip Girl, Campbell’s Soup, Louis Vuitton, Bon Appétit, Lucky Magazine, TLC, and PepsiCo are all currently experimenting with location-based services.

But as in any new technology, there is always the question of adoption rate, and to be honestly blunt, these networks are very much in their infant stages. Foursquare has just over 2 million users; Loopt has 4 million, and MyTown with 2.5 million - barely a drop in the bucket from a marketing standpoint.

And the next question is scale, when this will happen? As of now, the digital social network rulers such as Facebook, Google and Twitter are not fully involved in the location game. When their entrance takes place, this will help set the market more efficiently, creating a much higher adoption rate. And a drastic shift in competition for the current market.

Thoughts…

As Forrester always does well, and does often - it reports the facts. I don’t think marketers should completely avoid location-based service programs, nor is Forrester saying that. They are however saying that you should tread lightly and not expect any massive returns as you start to experiment in this sort of advertising.

However, the market always moves quickly, as we all have become aware of over the past several years in social media’s popularity. If digital adoption rates stick, I’d say we would be in a good place to give this just a bit more of time before more users begin amass on each of these networks.

Depending on your specialty, I’d say it’s reckless to not at least consider location-based services when considering new social media programs. Your brand’s demographic might not fall directly into what Forrester reports, however, you should consider the question of “When?” At exactly what point will the ‘branded’ location-based network space take off in popularity? When will they eventually act like your Facebook branded community does now?

I think the real question is: Do you want to get involved now, or several months or years from now when every brand on the planet is doing it?

These types of applications will grow; they will be built beyond a cliché, cornball badge to tell your friends on Facebook or Twitter about. Monetary, if not branded products will soon replace these and be offered in place of  a ‘real’ incentive for checking-in. We already have started to see this in mobile coupon deals that Starbucks offers.

These incentives will get better and will have a stronger support system as the adoption rate increases.

We’ve just started in this game kids…just give it time.

Look out, because here they come! Foursquare, the ever-growing location-based social network is quickly digging its clamps into the mainstream as CEO Dennis Crowley reveled that the community is adding about 15,000 users per day. The announcement was made at this Business Insider’s Startup 2010 event in New York City this morning.

Foursquare first made it’s major debut at the SXSW 2009 Music, Film & Interactive Festival last year in Austin, where it was dubbed “the next Twitter.” With such a gracious title, the location-based network has exploded, recently surpassing the one million user mark, and now adding a substantial amount of new users a day.

Addressing the crowd this morning, Crowley said he very excited to provide a violable platform that businesses can utilize, offering “Google Analytics but for local merchants.” For example, allowing a small cafe to see its demographics and identify its most influential customers. These are powerful statistics that businesses can leverage to turn visits into meaningful data, very useful for future business strategy, as well as gathering consumer insights.

Foursquare has struck a number of recent media partnerships that have helped propel the community into the limelight. It’s recently announced deal with Starbucks, where Mayors of each location will receive a $1.00 off a drink is just the tipping point of what they have achieved so far. Bravo, Zagat, MTV, The Wall Street Journal, History Channel, and a number of other deals have been struck that have sent this new type of community channel soaring above its competition.

It’s main competitor, Gowalla, has not seen the kind of numbers it thought it would when it had it’s showdown with Foursquare at SXSW this past March. Both spurred a major amount of buzz, however, Foursquare seems to the be the clear winner so far.

Compete.com reports that more than 2 million + unique visitors a month are now heading to Foursquare, as opposed to just a little more than 500,000 for Gowalla. And this doesn’t account for it’s sole use in the mobile space, imaginably much more active.

Foursquare vs. Gowalla

Despite Foursquare’s dominance, Crowley believes competition in the location space will expand, and for Foursquare to carve its niche, he said he needs to provide a unique experience, as opposed to what larger sites could end up doing.

Foursquare – you’ve heard of it, probably even might be a member yourself. The quick-growing location-based social network is beginning to make reputable noise in the social space, and since August, traffic and user growth has soared for the new social noise maker.

According to co-founder Dennis Crowley, the platform is closing in on 500,000 individual users, with about 70% of the user base in the United States, and their international arm growing quickly – especially Tokyo, according to Crowley in an e-mail interview. These users are also checking in at an astonishing rate of 1.5 million check-ins a week.

If you are not familiar with Foursquare, the concept is simple – you sign up for an account and then you began the process of checking-in wherever you go; the majority of check-ins that are being done are through GPS-enabled mobile devices.

This social city-guide and game rewards you then for doing interesting things. The motive is to encourage people to discover new places and challenge you to explore your neighborhood in new ways. The rewards attached to this are tied to pseudo ‘badges’ a user is given for unlocking new places, times you check-in, how often, ultimately working your way to become the “Mayor” or “Deputy” of that locale.

In addition, the platform makes it very easy to connect your updates to your Twitter and Facebook profiles – seemingly synching your entire network with each update you post on Foursquare. Something that was not in place last year when Foursquare introduced themselves at the SXSW, but is working it’s way into a much more seamless process in 2010 and allows for a much higher engagement and viral distribution.

The concept is quite ingenious and despite it’s evolving stature; it is beginning to make quite the name for itself. Just in the past month, it’s been reported that Foursquare inked several major media partnership deals, including Bravo TV, Zagat, Warner Bros., HBO, the History Channel, ExploreChicago, and more.

These “branded” type of channels could be, if used and marketed properly, great engagement tools that focus around brand awareness, content sharing, and goes one step further and creates a physical presence with your brand using local stops where you instruct users to go. With the user taking part in the brand’s “game”, it allows the brand to create custom badges with Foursquare directly to keep user’s engaged and work toward further outreach goals.

Zagat @ Foursquare

Zagat’s official Foursquare page is calling the partnership “Foodie Love” and there is a custom badge to go along with taking part in the Zagat experience. The page offers people to follow Zagat and then take part and in various venues where Zagat wants users to check-in from, mainly a variety of restaurants throughout the country; check-in there, become a Zagat Foodie, and unlock the Zagat Foodie Badge. And through further engagement – Zagat is going to have a online video series on their website called “Meet the Mayor” where they will feature discussions with prominent Foursquare mayors.

Harvard @ Foursquare

The prestigious Harvard University has also partnered with Foursquare to create a channel where they list locations, experiences and ideas for students and visitors to go and check-in – taking part in the Harvard community; soon unlocking a custom Harvard Foursquare badge. Whether that helps with the admission process…I’m going to say doubtful – but hell of an engagement tool!

New York Times @ Foursquare

The NYT recently closed a deal with Foursquare and created a branded channel that is celebrating the 2010 Vancouver Olympics by sharing tips on what to see and where to go in Vancouver and Whistler. And if you check-in to two recommended venues you get to unlock the Olympics badge.

Conclusion

There is no doubt that Foursquare is growing quickly, with the focus mainly on gaining users, not revenue at the moment, according to Crowley; with now nearly 500,000 users, this number is likely to grow fast! After the Bravo TV deal was inked last month, a number of major brands, as shown above, came knocking at the door to work with Foursqaure, no doubt helping them earn some revenue. And with the ability for locales to offer up free food, drinks, discounts, coupons just for those who might become the “mayor” or “deputy” of their venue; being on Foursquare could soon become like being on Twitter…maybe? In addition, Crowley did confirm that Foursquare is working on creating actual incentives for users who garner specific badges and points in their account - not just pseudo “Mayoral” titles.

To that end, Foursquare is working on a set of services and tools, according to AdAge in early February, to begin offering paid services on a three tiers: one for small (local) businesses, one for retail chains, one for large marketers. Begin throwing these offers around, and soon Foursquare will move pass just the “engagement” level that these major brands are seeing above as far as click, follows and check-ins; and offer nailed-down analytics (impressions, clicks, friends, etc…) and deals could be sold against impressions such as web ads, clicks such as search ads, or even what Kunur Patel in AdAge said, “ a completely new model: cost per check-in.”

I know where you are, I know where you could be, I know pretty much everything about you.

And I’m not even your friend – at least (REAL) friend. It’s no surprise that social networking allows me to know this about you. I can see what you just ate, because you tweeted it, what you just got for Christmas, because you put it on Facebook. And now I can even see where you are all the time, because you went ahead and checked-in on Foursquare, or you Google Buzz-ed a random thought, and oh yea, you forgot to shut off that geo-location feature that is set to be on automatically when you activate your Google Buzz account…doh!

Sure, these publicly announced check-ins, random personal thoughts, and location-sharing networks might get you a cool new pseudo badge and allow you to become the Mayor of your workplace or the supermarket next door, maybe even the Target down the street – but one key thought that revolves around all of this – I know what you are doing, I know where you are, I know pretty much everything about you.

Social Networks & Privacy?

Privacy seems to be the 800-pound gorilla in the room that everyone notices is a big problem, large enough to be spoken about daily, but we more or less undermine it and sweep it under the rug and think it will clean itself up later somehow – aka….someone else will deal with it… or even worse – maybe nobody cares?

In the past, we’ve gone through the trials and tribulations of privacy wars on Facebook, and after that battle, their new policy now allows for more individual control and openness at the same time. That battle has slowed, and has now turned into the discussions around the new dangers of location-sharing networks such as Foursquare, Google Buzz, Loopt, even Yelp’s new check-in feature, maybe even clever Twitter or Facebook searches will yield some good results as to where you might be. As each of us get caught up in the novelty and bonuses associated with our behavior – what dangerous doors are we opening by taking part in this?

This leads into a larger discussion around the privacy associated with social networks, but to be honest, if we are taking part in this phenomenon daily – do we care about privacy? Sure there are certain Facebook pictures you want to keep targeted to just a select group of friends, and on Twitter you want to grant permission to a select group of people to see your tweets; privacy exists – but what is privacy if we are taking part in social reality anyways?

The 24/7 personal openness we display as social media users ties to our inherent behavior to play to our strengths. Social media has changed the way we live on and offline and has us living in much more “open” environments, compared to our parents and other Generation X’ers who lived in “closed” worlds and had “separate” behaviors. Social reality now combines all of that for us!

All of this sharing allows people to play to their virtues, even more in a social media world. People find their triumphs in social media accomplishing and well deserved from a societal standpoint, as well as a boost in their own individual behavior (aka EGO). If I tweeted from the top of mountain and said “About to hang-glide from 4,000 feet in Peru, what a life!”, compared to “Watching ‘Charles in Charge’ reruns on Mondayz…”; clearly it’s cooler I am doing the first rather than latter, but social media, despite its privacy concerns, allows us to live that behavior and feel accomplished for letting the world know what WE are doing. Does it matter that it related to hang-gliding or watching mundane television – no… I am letting the world know because I feel that I need to, to maybe feel that accomplishment in society.

I am not going to break this down from a psychological level, but I am sure there is some reality to this opinion in how people perceive themselves and why they take part – not caring about the privacy concerns we always feel so bullied with. In a recent study from the Future of Privacy Forum, 42% of Internet users are concerned that websites are collecting too much information about them, but then again with Facebook recently overtaking Yahoo! for the #2 top spot on the entire Internet - I don’t know if that reflects privacy as much of a concern anymore?