I've slowly become addicted to FourSquare, a location based social network. The only part that is strange for me is when I explain it to my friends and family that are not digital media geeks like I am. I start by saying " see, you can 'check in' and tell your network of friends where you are." But then I realize it's not really my network of friends but more my work people and fellow digital media geeks. It reminds of the days a few years ago when I tried to get my sorority sisters, who live all around the country, on Facebook with me. I would say "see, we can update each other every day without having to do the round robin email chains." They were slow to see the beauty of Facebook but now they are fanatics and literally update multiple times a day.
Location Based Social Networks are where Twitter was 18 months ago, a small but rapidly growing community of mostly tech trendsetters. According to ReadWriteWeb FourSquare is up 3x in the last two months. They require a smart phone with GPS which is around 12% of the US cell phone users. People earn points when they check in and different locations give different values depending on how many times a person has been there and if it's a new location. A person becomes 'Mayor' if they are the person that checks in at a location the most. I'm Mayor of my hair salon. This is all good fun but what is really interesting to me is the value it creates for marketers. Here are just a few of the possible ways a marketer can begin to think about using Location Based Social Networks:
- Driving to retail. An idea we've been playing around with is a program Windows could create that encourages and rewards consumers for checking in at a retail partner. I spoke to a major automaker yesterday that was visiting campus and encouraged them to think about how local dealers could offer incentives to get consumers to check in a dealership. The biggest hurdle for car dealers is getting people into the showrooms and this could be a fun way to reward and build incentives for customers.
- Deliver location specific offers. This is a great opportunity for local shops. Hotel Max in downtown Seattle is a current promoter on FourSquare. Anytime I check in downtown FourSquare pops up a 'specials nearby' option that sends me to a drink promo from Hotel Max. A great way for Clearers, Restaurants, Nail salons, Hotels, etc to drive people into their shops. There isn't an advertising platform yet on FourSquare, how it works today is the biz dev person programs in select offers. As these networks get more pressure to make money look for this type of promotion to be a win/win opportunity for advertisers and users.
- Reward enthusiasts. I've checked in a few locations that offer special discounts to the current Mayor of their location. Great way to reward regular customers. A coffee shop could even make a competition between regular customers posting the current Mayors picture and changing it out as the Mayor changes.
- Rich customer behavior data. A bit further down the road I can see a place where the data being collected by these networks would bring a lot of value to advertisers not just to advertise for their own brands but to cross promote and target potential customers by their consumer behaviors. Imagine a car dealer targeting buyers by their shopping habits; Toyota interested in Walmart check in and Mercedes interested in Whole Foods check ins. Obviously a generalization (I know lots of bargain shoppers that drives Benzes) but you get the idea. The information check ins reveal about a person's likes and habits is incredibly reach for marketers and makes the promotion offers more relevant for the shopper.
I spoke with FourSquare a week ago. They are just starting to think about their longer term revenue model. They are very focused on keeping the experience pure and rewarding for the users. But as we know with where Twitter is right now, that only lasts for so long. In order to sustain a business there has to be some sort of money coming in. Watch this space, we are certainly planning for it.