We have been a little obsessed with the possibilities of location-based social networks and gaming platforms lately so we decided to check ourselves instead of checking in. We hope you enjoy this tongue-in-cheek look at the LBS space. As always, if you have questions about how to activate with this stuff, drop us a tweet (@schneidermike or @EricLeist), leave us a comment, or contact us here.
(left to right) Mike Schneider, Leighann Farrelly, Phil Thomas Di Giulio and Wayne Sutton (photo by @leximaven)
Our own Mike Schneider moderated this week’s MITX panel discussion titled “To Check-In or Not To Check-In? The Opportunities of Location Based Social Networking.” The panel consisted of Pegshot co-founder Phil Thomas Di Giulio, Yelp Boston Marketing Director Leighann Farrelly, and Wayne Sutton, Business Development & Marketing Strategist for TriOut.
We’ve aggregated some of the key insights and tweets from the panel discussion. Enjoy!
Key insights:
From the Twitterverse:
Are you using an LBS? How are you seeing marketers use these new platforms? Want to talk more about location-based services and some of the goodies we’re working on at a&g? Drop us a tweet (@schneidermike or @EricLeist), leave us a comment, or contact us here.
The Boston restaurant and marketing communities converged in Dialogue’s first Eat Drink and Be Social event. Thanks to Tyson Goodridge , I had the privilege of moderating the panel on location based marketing in the restaurant business. The panel featured the CEO of Foodspotting, Alexa Andrzejewski and the mop-haired, minor pop culture icon (he’s no Justin Bieber yet, but they have the same haircut), Dennis Crowley of Foursquare. We discussed the platforms, their potential and how to activate in the space.
Foodspotting is media-first, location second. People take pictures of food that inspires them and then tag them with a location to share with friends. It is focused on providing a window into the entire dining-out world. The exploration options are particularly strong. Not only can you follow people and the food that inspires them, you can follow updates on places and dishes. This is excellent because there isn’t really anything like it in Twitter or Facebook. It takes advantage of tagging to improve the overall information received by the user. We are talking about the incorporation of business intelligence into the tool. Foodies are always on the lookout for the next great food destination and this could inspire them not only to try places in their locale, but travel to other places with interesting fare. It can also be used for competitive intelligence / community monitoring by restaurants.
Alexa encourages restaurants to create Foodspotting accounts to showcase their favorite dishes along with the user community. The platform is still in its infancy, but growing quickly. They have 100,000 active users in just 3 months time. Users can connect their accounts to their Twitter and foursquare accounts (and I am told Facebook is coming soon) which gives Foodspotting exponential reach.
Location and Foursquare are the hottest things in social media and emerging technology right now so we grilled Crowley and Alexa on specific ways that people can use their technologies to promote loyalty and increase share of wallet. Mayorships are great, but they give a benefit to one person. Crowley talked a lot about Foursquare specials, which are benefits given to anyone who checks into a location on Foursquare. They are free for any business who wants one, but there currently is a bottleneck in the process. Each business needs verification to ensure that the owner really is the owner and that people are not putting phony specials on a business. Seems this is the responsibility of the new business lead, who is also trying to graduate from Stanford. Foursquare has a serious, yet dreamy problem. Everyone wants to work with them.
The queue for business verification is 10-15,000 businesses deep and they have 20 people on staff only one of whom is dedicated to new business. Per Crowley, the company is working on tools to automate the process. An interim, cost efficient step could be to contact a call center in Omaha to call businesses and verify the ownership while automation is being developed. Why aren’t they doing this already? When I asked Crowley how much it costs to use the “specials” feature, he said it was “totally free”. They are probably reluctant to place resources in a verification bucket without a quantifiable return for Foursquare.
The original question was: “How does the restaurant business activate? How can we better understand the components of your services model? How do we activate? What is the cost?” Custom services like badges for achievements are available, but his focus in answering my question was more on how local businesses, specifically restaurants can use Foursquare to attract people. What it takes to create custom campaigns and badges was a little murky and suggests that those are opportunistic and pricing, details and timing are up to the discretion of Foursquare. You need to make it easy and lucrative for them. Why is this? To paraphrase Dennis, everything is happening faster than they imagined and they are focusing their resources on scale. They are only 20 people. They are working on figuring it all out.
When Foursquare first came out, I used the hashtag #failsquare every time I could not check in. It was supposed to be funny and they took it really seriously and not personally. They have done an amazing job of keeping foursquare up and running while adding 15,000 users a day. The system is fast, lean and until version 1.8 which has had a few recent hiccups (although not near as many as Twitter in its early days), largely bulletproof.
I asked the audience too: If you could be the mayor of anywhere, where would you be mayor and what would you want the special to be? Me? The Ginger Man in Austin, TX A beer on the house. How about you?
Last week, I was at the Microsoft NERD (New England Research and Development) center listening to Dennis Crowley explain foursquare’s vision for location based social networking. For the uninitiated, foursquare uses the GPS on your smartphone to allow you to “check in” to locations and leave tips for your friends while competing for digital rewards such as badges or titles such as “Mayor”. Dennis, foursquare’s co-founder and CEO, is an impressive guy, and despite all the recent hype foursquare is an impressive network. It’s growing at a faster rate than Twitter did in its first year, expecting to be able to announce one million users in the next few weeks.
To use Dennis’s phrase, foursquare has “broken out of the tech nerd ghetto”, and is now just as likely to be mentioned by the New York Times as TechCrunch. By partnering with brands such BravoTV, Pepsi and SPIN, foursquare (and its main competitor, Gowalla) is on the cusp of becoming a serious contender for inclusion in any social media plan.
After Dennis’ presentation I stopped by one of our client’s restaurants. Checking in on foursquare I looked up the Mayor. Out of curiosity I checked out several dozen other locations of the same client’s stores. Not surprisingly, several dozen Mayors were in place. Now, needless to say, there’s a lot you can learn from your Mayors. By definition, they are fans and usually advocates. Many will tell you what they think about your location. You can see which of your competitors they visited, and how often. You can see where else they have the title of Mayor. You can even see what their friends look like. If this isn’t enough context Facebook and Twitter links provide even more insight. Need to build a persona of your social advocates? Once foursquare scales this will be a great resource!
Geo-tagging is more prevalent than you think. It’s time to meet your Mayors.
Thanks to Twitter and Facebook, the crowd has a really good idea about what you do during a given day. iPhone and Android’s onboard GPS has given way to location based social networks like BrightKite, Foursquare and Gowalla, which allow you to tell your friends where you are and how often you go there. Location based applications are the next frontier, and in fact are predicted to be next year’s big thing, offering unlimited possibility for communication by geography and, of course, advertising.
My last two sessions at SXSW 2009 featured players in location based social networking. I remember being fascinated by how they approached it primarily because Gregory Ng and I concepted our own in 2007 (prior owning an iPhone and iPhone’s “reliable” GPS).
Each of the location based apps have the ability to figure out where a person is located. The user “checks in” to locations, signifying their arrival. In addition, the user is able to send messages to let people know what they are doing.
BrightKite allows you to post a status update and a picture.
Foursquare gives you points for creating and “checking in” to a location. It also has has a leaderboard to see how you rank against your friends and your city.
Gowalla’s check-ins are similar in that you can post a note, but the app also has quirky little items that you find and leave for others. For instance, I currently have an espresso, a silk robe and a tour bus in my inventory. I am never going to drop that tour bus. That is awesome. You can either exchange items for items left by others, or drop an item to become a “Founder” of a spot. I cannot say that I fully understand the purpose, although Gowalla says that they use the items as proxies for how important a particular place is.
Each application relies on the users to create locations at spots and rewards them for doing so.
Each of the services works with Twitter and Facebook, allowing you to connect with friends from those networks and to post notifications. Some might call this oversharing (particularly if you are friends with people on Twitter, Facebook and the Location based network).
Foursquare has recently also announced an API that is will make it even more appealing to the community.
The secret to extension of social applications is the ability to integrate it into a grander scheme. With integration with Twitter and Facebook already functional, the API combined with its game-like addictiveness will give it an advantage over all other LBSNs. BrightKite also has an API, but adoption has been much slower because people simply do not have a lot of incentive to use the platform even though it is probably the best in terms of geo-location. BrightKite needs to evolve and add incentives for use in order to stand up against its competitors and survive.
Foursquare appears to be the leader in advertising and monetization. I’ve started to see some “nearby special” bannerettes pop up when I am about to check in to a place. Foursquare allows locations to give special deals to mayors. A mayor is the person who has checked into a place the most. This creates a little bit of competition between loyal customers. There’s a great opportunity to generate social buzz and loyalty by being an early adopter.
Who Wins?
The winner is the one who makes money. There are a couple of ways for an organization to do so. One is to be acquired by another organization who is interested in your compelling technology. The other way is to actually have a business model that makes money. Obviously it is desirable to have both going for you. The winner will also have a very compelling API which will allow them to scale and proliferate rapidly. FourSquare’s looks to be based largely on Twitter’s which has been wildly successful. Foursquare has already begun selling ads that are based on where a person is physically. I have noticed ads when I go to check into a place. They say something like Deal Nearby and offer you a click path to that location with an easy back to your original location. Brightkite has some banner ads that display after you check in to a location. I have not noticed similar features on Gowalla yet.
Behavioral Data and Analytics
The real win here is that location data can be linked to conversations on both the application’s platform and on associated Twitter (and soon perhaps Facebook) streams. You can get a clear picture of how a person behaves by where they go, how often they go there, where their friends go, how often they meet their friends and what they talk about when they are there - or after they go there. An analytics offering segmented by demographics and interests would be very valuable to marketers. They would also pay to see analysis of popular places so that they know where to place their ads.
We know where they go and we know what they’re thinking.
Now we just need to get them to buy something.
Given the amount of information we have, I am sure we can find something appropriate to sell.
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