Posts Tagged ‘Foursquare’

A Look at the Future of Location-Based Marketing

by on Friday, November 19th, 2010

Bill Hanifin of Loyalty Truth (and a friend of Zavee) was kind enough to point me toward the Location-Based Marketing Summit held recently in New York. Bill thought it would be worth my while and, as usual, he was right.

Although the conference organizers were interested in what comes next for location-based marketing, most of the speakers were oriented toward the here and now. I came away from the conference with a far greater understanding of the uses and limitations of the current technologies and platforms while getting a grasp on some of what lies just over the horizon in the location-based space.

The Wise Marketer, a leading UK-based site for forward-thinking marketers, asked Bill to provide a write-up on the conference. Bill’s report, with which I assisted, was first published in The Wise Marketer for this week and is reprinted below:

The conference blended strategic and tactical insights about location-based marketing techniques, and most of the speakers observed that this branch of mobile marketing is still in its infancy. The principal strategic focus of the conference, however, was on consumer engagement and how to increase it.

Several speakers referred to Forrester’s recent finding that regular use of the ‘check in’ model was still in single-digit percentages, and that consumer awareness of these services wasn’t much higher – a report that has however been disputed at least once.

Either way, with estimates of more than 12 million people playing what consumers will initially consider “the location game”, smartphone penetration reaching 9% of the handset market, and SMS usage covering 95% of all wireless customers, it is clear that almost all consumers can be reached with marketing messages via a mobile handset.

Ian Schafer, CEO for Deep Focus, discussed ways in which marketers could use the technique for more effective marketing, suggesting that it can grow customer loyalty, increase relevance, and provide useful data and insights. He considers the smartphone to be “the next generation loyalty card”, with targeted deals and discounts being available upon check-in (or perhaps even without a digital check-in). By way of example, he highlighted ShopKick, which has a hardware platform that pushes reward currency to the consumer as soon as they enter the merchant’s store (without the consumer even having to check-in or make a purchase).

Android Phone

Android Phone (by Johan Larsson - Creative Commons)

Most of the speakers, including Schafer, took it as read that delivering more relevant marketing messages increases their effectiveness. And, in a highly fragmented communications environment, the relationship between relevance and effectiveness is even more essential.

Overall, it was agreed that location-based applications can at least provide:

  • People – other users who might have something in common with the user;
  • Content – messages or offers based on what the user likes that is at/near her location;
  • Time and Place – targeted, timely messages or offers based on where the user is right now;
  • Context – communications based on prior behaviour, as tracked by the location-based device.

The potential of location-based data is that it can drive better business decisions by adding additional dimensions (i.e. time and place, captured over time in real-time) to what is otherwise known about each consumer’s behaviour. One great example cited was the Microsoft Bing ‘Home Turf Finder’ for the World Cup, which identified certain bars in New York City as “home turf” for fans of a particular team. The determinations were based in part on editorial sources such as Thrillist, but were mostly derived from ‘heat maps’ of consumers who had checked in or tweeted their support as well as their location.

Several speakers also noted Google‘s recent announcement that 30% of mobile searches and 20% of all internet searches have local intent, and said that all of the major players (e.g. Facebook, Google, and even wireless carriers) were already focusing on local information.

There was also considerable discussion of ‘Groupon’, although some panellists expressed doubts that the “deep discount, deal of the day” model provides sustainable customer growth. Speakers agreed, however, that geo-targeting adds value by increasing both relevance and personalisation. And, in order to thrive, it was agreed that location-based applications must provide the consumer with something of value, preferably in terms of relevant and personalised content.

Overall, panellists agreed that there is great demand for marketers to engage with consumers at “the right place and the right time, all the time”. Mobile couponing, despite being a fragmented space, seems to have taken hold. As a result, one area in which technological developments are anticipated is indoor navigation, where GPS signals are sometimes degraded and are not designed to be accurate enough for navigation within a store.

Finally, the issue of consumer privacy arose in almost every session. John Nicholson of law firm Pillsbury Winthrop Shaw Pittman concluded that “the more value a marketer delivers, the more information a consumer is likely to share”, and that an application that seems to exist only for marketing purposes is unlikely to gain the consumer’s trust.

(Article copyright 2010 The Wise Marketer)

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4 Things I Just Learned About Location-Based Marketing

by on Tuesday, October 5th, 2010

As someone who enjoys – but doesn’t completely get – Foursquare and other “check-in” services on the Web, I was looking forward to the Location-Based Marketing Summit I attended last week in New York. I learned a great deal about this rapidly-growing field, and I had the chance to hear and speak with some of the people who are responsible for the latest thinking and most interesting developments in location-based services (LBS) and their application to marketing. Here are some of the things I learned at the conference:

via jorgempf (Creative Commons)

Check-in is only the beginning. Services such as Foursquare and Gowalla have received so much publicity lately that it’s easy to equate LBS with check-in. But LBS also includes maps and other query-based services (imagine wandering through a museum and using your mobile device to learn about the painting you’re standing in front of) and a variety of shopping platforms (mostly deals and discounts but also several loyalty platforms) as well as socially oriented services like Foursquare. What can LBS do for marketers? At least three things:

  • Grow loyalty. Some marketers, such as Tasti-D-Lite, are using LBS as a loyalty platform, where a purchase results in an automatic “check in” and a message to friends as well as an award of loyalty points. A new service called TopGuest drives enrollment in hotel loyalty programs by offering bonus points when a guest checks in (in the LBS sense).
  • Increase relevance. Adding time and place to any information increases its relevance. And almost any kind of information can be made more valuable by adding relevance. Location data can tell marketers about what people like to do and to buy, and when and where they like to do it. It can place consumer behavior in context: Is going to Starbucks after the gym the same as going there on the way to work? Is going to Starbucks because it’s convenient the same as going there because you like it? With more detailed and relevant information about the consumer, marketers can create messages and offers that are much more relevant to the consumer – and more likely to be acted on.
  • Provide data. Marketers also can use aggregated location data to make better decisions. Comcast, which uses Twitter as a customer service channel, has been mapping tweets as a way to learn where service resources are needed most and communicate with customers in those areas. Location data can also be used to map patterns of customer behavior, from which bars attract fans of what teams to which doctors are prescribing what medications.

Engagement is everything. The hype about check-in services has obscured the wide variety of location-based services that are already available. The common denominator among them is engagement. How can LBS create engagement? One way is to deliver relevant information delivered in real time. Or, as one speaker called it, earning attention by being in “the right place, right time, all the time.” Another source of engagement is providing an enjoyable experience, such as by including game mechanics. On a superficial level this is how the check-in services work. But the real value of these services is relevance: for avid users, where their friends are and what they are doing right now matters. Another way to create engagement is financial: location-based shopping services that provide deals and discounts certainly have an audience.

Local is next. It’s easy to think of LBS as the province of large marketers, and it’s true that large marketers are better able than small ones to take the risk of jumping into LBS early. However, many of the speakers (and attendees) at the conference were talking about local applications. Why? One reason may be that, according to Google, one-third of mobile searches and 20% of all searches have local intent. That’s a big audience to overlook, and with the cost of technology decreasing, local marketers have a chance to engage with them using a location-based platform. Although local use of LBS is still in its early stages – for one thing, awareness of and interest in LBS is thought to be low among local marketers – look for substantial growth in this sector. And look for Zavee to be right in the middle of things.

Privacy is a transaction. This was one of the most eye-opening insights of the entire conference. No speaker disagreed that consumer privacy concerns were a legitimate issue for LBS and the marketers who use them. Several speakers, for example, were critical of Facebook for being insufficiently sensitive to users’ privacy concerns. But every speaker who discussed privacy at any length made the same point: While a service that exists only to push marketing messages will always have a privacy problem with consumers, a service that delivers a genuine benefit will find consumers more likely to share private information. The greater the benefit, the greater the sharing. This only works, of course, if consumers know what they are being asked to share – a potential issue with some advertising programs. All of the speakers at this conference, however, emphasized the need for LBS to be transparently opt-in with an easy way to opt back out. It will be very interesting to see, over the next several years, whether this transactional notion of privacy reflects consumer behavior or whether there are certain bright lines that no LBS can safely cross.

This has been a busy few weeks but our conference-going isn’t over: Zavee CEO Alan Pleskow and I are off to California for the Rise of Social Commerce Conference in Palo Alto – expect a post about it next week.

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Fun and Games at Zavee

by on Tuesday, June 22nd, 2010

We came up with a fun idea to attract new Zavee shoppers: a Sweepstakes! Details are available on the Zavee website, but our contest is a random drawing for cash prizes, with a twist. All Zavee shoppers are automatically eligible to win. The twist is that shoppers get an additional chance to win for every new Zavee shopper they refer. The more referrals, the more chances to win. Shoppers can invite their friends right from the Zavee site, which is easy for them and makes tracking referrals easy for us. The contest opened yesterday – the first day of summer – and runs through July 31.

Farmville Badge

via Rusty Boxcars

Adding an element of game play is one of the latest trends in marketing. At first blush, game play might not seem likely to resonate with adult consumers, but we all engage in competition in one form or another from a very early age. The viability of game play can be seen in the popularity of virtual games such as Farmville, which has almost 65 million monthly active users on Facebook. The location-based social network Foursquare also has a significant gaming element, with users earning points and “points” for specific activity.

Why should game play increase marketing effectiveness? The rationale is that encouraging the audience to participate and be rewarded helps a message earn attention in an increasingly noise-filled environment. Game play also is consistent with consumers’ increased expectation of control over the marketing messages they encounter. One result of meeting these expectations is that consumers not only pay more attention to messages presented as games, they have better recall of messages presented in games.

For small businesses, introducing game play into marketing programs can help level the playing field with competitors that have larger budgets. And it doesn’t require a lot of cost or complexity. The key is to figure out how to get the consumer involved in the message. We took a simple contest model and tweaked it by rewarding referrals. Social media platforms make game play even easier to implement. We plan to run a video contest on YouTube later this year, and the cost to us, apart from prizes, should be minimal.

The Zavee takeaway:

  • Marketing messages that have an element of game play increase awareness, attention and effectiveness.
  • The key to game play is user involvement, not expensive technology.
  • Small businesses can and should add game play to their marketing.

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Do You “Like” Me? Do You Really “Like” Me?

by on Tuesday, June 1st, 2010

Remember Sally Fields’ famous acceptance speech at the 1985 Oscars? “You like me! You really like me!”  But what if we didn’t mean it?

One of the recent changes to Facebook has been a great expansion of the “Like” concept which, among other things, replaces the “Fan” concept.  Yelp and other social networks have followed suit.  At least for now, Zavee is still inviting shoppers to become “Fans” of merchants they haven’t yet shopped at and not just “Like” them.  Why?  Because we think that, on some perhaps subtle level, being a “Fan” implies a higher degree of emotional engagement than merely “Liking” someone or something.  How substantial is that difference? It’s hard to tell.  If you follow sports you might agree that there is a difference between liking a team and being a fan.  If you follow the New York Mets or the Miami Dolphins you almost certainly do.  At Zavee we are considering changing the “Fan” concept to something completely different – something that retains a high level of engagement but provides greater flexibility.  More news to follow on that new feature.

One thing we didn’t think about when we were debating “Fan” versus “Like” was whether a lower level of engagement might make it easier for users to be less than candid about what they say they “Like”.  Would people really do this?  And why?

Starbucks Barista Badge from Foursquare (via pbende)

No less a social media authority than Robert Scoble says they would, and do.  In fact, he says that he has done that very thing.  Why?  Scoble says that it comes down to a fundamental truth about human nature: we present ourselves as we want others to see us.  Since the pages, users and merchants we “like” become part of our public social persona, we can change that persona by changing what we say we “like”.  If our tastes run to country bands and donut shops, but we’d rather be thought of as someone who prefers singer-songwriters and vegan restaurants, our “likes” can reflect that.


Is this a problem for smaller businesses? It might be. For one thing, advertisers tend to take us at our word.  Check in frequently enough at Starbucks and you can win a discount off your coffee.  Starbucks can’t tell whether you like the coffee, just how often you showed up.  Clicking the Like button on Yelp for a bunch of restaurants gives rise to inferences about your preferences and behavior, and advertisers will target you accordingly. Providing a misleading social persona is just a waste of time for both advertiser and user, unless it’s being done as a form of protest against behavioral targeting.

Like much about social media, behavioral targeting presents legitimate privacy issues, and they need to be worked out. However, if advertisers lose faith in the accuracy of consumers’ self-descriptions the effectiveness of social media for marketers is likely to decrease. For small marketers who are drawn to social media marketing by, among other things, its low cost and high effectiveness, this could be a very unfortunate result.

It’s probably true, as Scoble says, that advertisers have ways to verify, at least in part, the accuracy of the things we claim we like.  But the deeper point is that the value of social media as a communications tool for users in the network depends in large part on the credibility of other users.  A user who creates a false or misleading social persona may only lose personal credibility within the network, but if enough users do the same thing the credibility of the network as a whole may suffer. A recent paper about dating sites reports that deception in profiles is rampant. The paper suggests that one reason is that users understand what makes them desirable to potential mates, and create profiles to reflect those expectations. Dating sites like to advertise their successes, but they may have become just one more system to game.

Whether Zavee stays with “Fan”, changes to “Like” or goes in a different direction altogether, the principal means by which Zavee shoppers communicate the quality of their shopping experience is by writing reviews. It takes more effort (and commitment) to write a review than to click on a button, but that very fact gives proportionately more weight to the reviews and less to a simple “Fan” designation. One safeguard we put in place expressly to improve the accuracy, timeliness and fairness of reviews is for the system to accept a review of a merchant only if the reviewer has made a Zavee purchase at that merchant within 30 days.

We hope that social networks and their users develop means to limit the influence of false social personsas, not to protect advertisers but to protect the networks themselves and to permit them to continue to deliver valuable, relevant experiences to their users.

The Zavee takeaway:

  • Once it becomes trivially easy to create a social persona, that persona may itself become trivial. The problem is that those personas are taken seriously, both by advertisers and by other users.
  • It’s natural to present ourselves as we’d like to be seen, but invented personas can make the the network as a whole less valuable to users who rely on other users for timely and accurate information and opinions.
  • Local businesses will suffer disproportionately if social media marketing loses credibility, because it’s a particularly attractive tool for them in an environment where conventional alternatives aren’t nearly as cost-effective.

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Checking Out Checking In

by on Tuesday, May 4th, 2010

Have you checked in yet?

Foursquare @SXSW

Foursquare @SXSW

Location-based social networks such as Foursquare and Gowalla make use of the GPS capabilities of smartphones to let users communicate in real time not just what they are doing, as with Twitter, but where they are. They are growing rapidly, and for businesses they are well worth checking out.

Both networks are about two years old but have entered the mainstream only recently. Users of Foursquare “check in” at different locations to tell their friends where they are and what they are doing. Foursquare also has an element of game play that lets users collect “badges” for certain activities, such as earning a “barista” badge for checking into five Starbucks. Foursquare has a large user base that skews young and lives in cities, and has attracted a certain amount of backlash (note: strong language at link), although it has its defenders. Gowalla doesn’t depend quite as much on its game mechanics, but supports media files, such as photos, and claims to be looking for a broader (and perhaps older) demographic.

Businesses seem to have less of a “wait and see” attitude toward location-based social networks than they did toward Facebook and Twitter. It may be that, having been through this before with other Social Media outlets they simply need less persuading when it comes to location-based networks. It may also be that the business case for location-based networks is more obvious than with, say, Twitter. Another possibility is that the networks themselves have become business-friendly faster. Foursquare already has the ability to serve merchant offers based on location, although it is still refining its analytics dashboard. In any event, marketers are not sitting on the sidelines. Recently, Pepsico announced a “geo-based loyalty program” in partnership with Foursquare that will reward consumers who check in via iPhone at businesses that serve Pepsi products. The History Channel also is using Foursquare to promote its show, “America, The Story of Us.”

Do networks like Foursquare and Gowalla have relevance for small businesses? We think they do. Even basic data on who has visited a business, how frequently, etc. adds to the merchant’s knowledge of the customer base. Serving offers and other content to those customers has obvious benefits, although it still isn’t clear how the merchant can get a full picture of the return on investment from that content (merchants will know how many people used (and, presumably, saw) the offer, but won’t necessarily know how many of those transactions were made by customers who would have purchased anyway). Checking in to a business from a location-based network also can provide extended word of mouth for the merchant. It’s going to take time to figure out how to use these services for business, but that was true with Facebook and Twitter. And, as with Facebook and Twitter, there is a lot of potential and no real downside for businesses that experiment.

At Zavee we are currently exploring the fit with location-based networks, but we fully anticipate using this technology to add value to the Zavee experience for both merchants and shoppers. With both cash back offers by merchants and reviews by shoppers, Zavee provides a great deal of content whose value can only be enhanced by becoming location-aware.

The Zavee takeaway:

  • You heard it about Facebook, you heard it about Twitter. Well, location-based social networks aren’t fads either.
  • Businesses have wised up and caught up, and are right on the heels of consumers in discovering how to make these services useful, relevant and rewarding.
  • If you were sitting on the sidelines while Facebook and Twitter were becoming huge, don’t let it happen again!

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