I attended the series of panels on location-based services, Geo-Loco@ad:tech. As Marc Prioleau, a Principal at Technology Growth Advisors, described in the introduction, geo-location has been “the next big thing” for several years, so the organizers are pleased that it’s being featured at ad:tech.
Keynote Presentation – Dennis Crowley of Foursquare
Dennis Crowley was pleased that for once he didn’t have to ask “who knows what Foursquare is?” He described some of the story and background of Foursquare. The users’ check-ins, Crowley believes, creates a story of the users’ actions. It helps share experiences. As far as marketing to retailers, he described it as “like Google Analytics for the people walking through the door.”
Prioleau asked Crowley what Foursquare is looking to do “after the check-in”. The check-in is ultimately boring, according to Crowley. It is becoming commoditized. Foursquare begins by offering tips and badges. In the future, he sees it evolving into a recommendation engine. In order to different Foursquare from other check-in services, Crowley is focusing on “making the physical world easy to use”. Foursquare is getting good at affecting people as they walk down the street and encouraging users to follow their friends to physical locations. This is why Foursquare doesn’t offer check-ins to TV shows, music, and so forth.
The Foursquare API allows developers to build whatever they want off of Foursquare. This runs the gamut of mobile ports to dating and shopping apps and visualizations. Yesterday, for example, Foursquare used election-related check-ins to visualize voting practices across the nation. One challenge that Foursquare faces is the ability to reach out to small and medium businesses. In place of a large sales force, Foursquare has enjoyed crowdsourced merchant engagement, as users inquire about specials to venue owners. In terms of working with national brands, the trick is to determine how they can interact with the physical world in the same way that Foursquare does.
Advertising is still in the experimental stage, perhaps $10K to $50K. They are not pushing for large advertising campaigns because they don’t want the service to be littered with ads. Crowley is bullish about the success that Foursquare will have with local merchants. In terms of metrics, location doesn’t rely on cost-per-click, but a cost-per-check-in. How fast does a customer show up after seeing a promotion? Crowley recognizes that Foursquare is still in its early stages and isn’t worried when people are skeptical about their userbase. As he puts it, give them a year and they’ll be kicking ass.
Prioleau asked about the concept of passive check-ins. Crowley sees technical limitations of GPS as well as problems of people’s comfort level. Eventually, he’s looking to have Foursquare recommend check-ins when returning to a venue. As far as specials, he sees more evolvement of specials with multiple special offers and loyalty. Additionally, he sees improvements in Foursquare’s affinity marketing programs, allowing users to find brands that they may be interested in following.
Panel – Life is Local: How are Consumers Discovering Local Merchants Today and What’s the Impact on SMB Advertisers?
Stewart Alsop, Partner at Alsop Louie Partners
Seth Priebatsch, CEO of SCVNGR
Ethan Anderson, Co-founder and CEO of Red Beacon
Maria Kermath, Director of Business Development at AT&T Interactive
Walt Doyle, President and CEO of Where.com
Kent Lindstrom, Founder and CEO of Placepop
Alsop asked the panel to each share “one cool thing” that they see happening (or predict will happen)
- Lindstrom predicts that Facebook will soon move to compete with Groupon
- Doyle predicts that location-based services are converging with local commerce
- Kermath sees an opportunity for location-based services to act as agencies for SMB
- Anderson believes that the most successful companies are creating platforms for partners to plug into
- Priebatsch believes people should look at location-based services not as a way to target people, but as a way to motivate behavior using game mechanics.
Alsop asked how brands can engage with location-based services. Lindstrom recognizes that the audiences of location-based services are so small in the grand scheme of things, that they can’t move the needle for national sales. A large business needs to use a model like Groupon’s in order to create noticeable success. Anderson sees a move from pay to be there to a pay for performance model. Brands can pay for transactions when relevant. Priebatsch notes that brands need to use services that can drive sufficiently large transactions (giving the example of Gap and Groupon). He sees cooperative development between brands and services as essential, creating engagement even with a small user base.
Kermath sees location as becoming something that is both physical and virtual. Our “coffee shop conversations” have moved online. She sees the need to create a localized ad and communication system to pull customers into a store. Priebatsch sees coupons as an unearned promotion, and prefers earned or won promotions and deals. For a coupon, you can only have a value equal to the monetary savings, but with won savings, you also have an emotional benefit. Lindstrom sees a movement from technologist-driven answers to marketing-driven answers for location-based commerce as marketers become familiar with the technology and begin to apply their experience in other promotional techniques to the space.