August 25, 2010
A Conversation Between Two Social Media Nerds
Shane and I have been randomly discussing geo-location during meetings and while eating our lunch for months now. We gently argue back and forth about how fun it is, how silly it is and how safe it is. Shane is adamant about becoming the mayor of a local Mexican food joint. I, on the other hand, know that no one is interested in where I eat lunch or get my coffee. When I caught wind last Wednesday that Facebook would be launching Facebook Places later that evening, I thought it was a perfect opportunity to put our rants out there for everyone to "enjoy."
Q1: What is your preferred geo-location based app? Why?
Shane: When it comes right down to it I haven’t found any hugely beneficial qualities to location based apps so trying to answer why I chose the one I have now is a hard question to answer. Prior to reading the recent press about Facebook Places I had never even considered there were options other than Foursquare. Initially, the only reason I started playing with Foursquare was that it was new, it was generating a little buzz and being in the technology business I think it’s my duty to at least give some of these things a go…not dissimilar to why I started using Friendster back in 1997. Then, as I started travelling more, it only made sense to check-in on Foursquare because they would automatically update Twitter and Twitter would update Facebook. Therefore I was able to passive-aggressively brag to all my friends that I was now going to a Cubs game while they were stuck in the office. On top of that I do enjoy having a history of what I was doing and where I was at. Call it a lazy man’s journal which now happens to include corresponding pictures thanks to Flickr. I only have one mayorship (which is a slightly compelling reason for me to continue using Foursquare) and I do have a few friends that use it so I see no reason to switch platforms at the moment.
Alisa: I have never used any of the various geo-location applications. I also disabled the Facebook Places check-in options last week as soon as I learned how to opt out of them. It's not that I do not see the value in geo-location in terms of analyzing social behavior, it's simply that I deeply value my privacy and I don't see the purpose of checking in to my local sandwich shop or favorite watering hole. Even if I was offered an incentive to do so, my privacy is worth more to me than $1 off my mocha or 10% of my dining bill.
On the privacy note, some people have asked me, "Why participate in the social media world if you are so protective of your privacy?" And my answer is simple, "I participate in social media to communicate with my friends and family who I know and trust. The rest of the world doesn't need to know what I am doing or how I live my life ... not that the rest of the world would care to begin with. Information on the internet tends to 'live forever' and in 100 years no one needs to know that I have cute puppies or enjoy a certain neighborhood cafe."
Q2: How are both small businesses and large corporations taking advantage of geo-location and what value does geo-location provide to businesses?
Shane: At this point, and having used Foursquare for about a year now, the only place I can remember offering me a discount based on my Foursquare check-in was Hash House A Go Go in Vegas. Interestingly enough I would have never remembered what the name of that place was had I not been able to go back through my Foursquare history. Showing the server my check-in, I was offered a discount on a drink. Nothing earth shattering but enough to make me check-in. Would my decision to check-in be different were I offered a free pair of Spock ears at this year’s Official Star Trek convention…undoubtedly so.
At the moment I don’t see any huge beneficiary of location based services. On the other hand I could see that changing though in favor of the SMB market. Granted, the Starbucks of the world can implement a rewards program for thousands of franchises all over the country but how many Fortune 500 companies are going to go to the effort. In the grand scheme of things there are a lot more mom & pop, Tex’s Cafés out there than there are McDonalds and Applebees so it seems like the success of the technology may depend more on the 99.7% of small businesses rather than the .3% of large corporations. The problem with that…the owners of Tex’s Café aren’t the type of folks using Foursquare. Google sent 100,000 ‘Favorite Places’ stickers to local business all across the country. I don’t know what the cost of that was but I would suggest Foursquare start focusing some marketing dollars on building up vendor awareness rather than user awareness.
Alisa: I know Starbucks and Ann Taylor are two national retailers that have run Foursquare promotions. The funny (or sad) thing is when I tried to get the details of each promotion, I was directed to articles on Mashable and was not able to easily locate a link to the promotion on either company's official website. Believe me, I understand that both establishments were running social media campaign promotions, therefore they may have only promoted said offers through social media channels. I just find it interesting that they are targeting people who already know about geo-location technology, which I believe the most recent registration data is that Foursquare is approaching three million users.
In terms of value, Mosaic, a downtown Saint Louis restaurant and lounge, heavily promoted their Foursquare promotion this past May and from everything I've heard and read, it was wildly successful. I agree with Shane that geo-location promotion success may skew towards the small business community.
Q3: How are geo-location based applications profitable?
Shane: Today I don’t think businesses are investing thought into the process to make it profitable. In fact, most places could put a sign on the door that says “10% off for Foursquare Mayors” and I’d likely give it a try. Not necessarily because their product is superior to their next door neighbor but more because I know they’re catering to me. Unfortunately most businesses right now aren’t making a big enough deal out of it. If you have the clientele that is A) tech savvy and B) competitive then offering a significant prize to a mayor may be enough to keep me coming back. If nothing else put a sign on the cash register that says “Have you checked in yet?” If I’m not a current customer and see my friends checking in there’s a little brand awareness you didn’t have before. And best of all, it’s FREE! In some respects this is just another extension of the same old social media/ROI question. We all know social media has value but in a lot of cases that’s very difficult to prove. I would say location based services are very similar at the moment. Not enough people are spending the time and creativity necessary to put together location based campaigns. Once that starts happening more data will become available that should help to prove out the model.
Alisa: I've never asked a local business that offers geo-location applications check-ins and/or promotions if they have analyzed their customer user data to identify any trends or success stories. Obviously, I mentioned the Mosaic campaign above, but I don't have first hand knowledge of their success. In fact, I've only heard of one other Foursquare mayor promotion other than the three I referred to above. Perhaps because I do not use the applications, I am simply not looking to check-in therefore I am not aware which places I frequent that offer discounts or special badges to their customers. With that said though, my particular consumer behavior would not change if I was offered $1 off my mocha or 10% off my dining bill by checking in and achieving some virtual political status. But that's just me.
Q4: Is there a niche for B2B geo-location services?
Shane: Up to this point I think when we talk about geo-location services, the check-in based applications have gotten most of the media attention. Looking specifically at that model I don’t see many tremendous B2B opportunities as of yet. The one-to-many, and personal, relationship of check-in based services doesn’t lend itself well to the B2B world. At some point it would be nice if my check-in at the airport could be tied to some corporate perks or an expedited check-in line but I’m not sure the juice is worth the squeeze. On the other hand there are so many other B2B geo based services already in place that we don’t even know about. Most of these types of things are happening behind the scenes and if we’re not careful they’re easy to overlook. Comparing real estate prices on zillow.com, mapping of delivery trucks, traffic congestion, location relevant searching and recommendations all make my life a little easier…I just forget how it is they’re happening. While I may be the consumer viewing the data (real estate prices in my area) that service is being provided by a vendor (zillow.com) and those geo-tags or location based assets are being tracked by yet another business (google.com). Therefore, just like any good entrepreneur, be on the lookout for the pain point in any business model that could be lessened by placing data on a map or knowing that a certain activity is happening with x miles of where you’re standing. When this is all said and done I should be able to search for “gas station” on Google, find the area that has the fewest number of markers and know with confidence that if I build my next franchise in that spot I will have a higher than average chance of success. All without paying a dime to some pay economic development or management firm and their over-priced research.
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Alisa: I say this with utter humility, I have no idea how geo-location would benefit B2B. Or maybe I do and I just don't want to share it with the world yet because no else can think of a way to make it successful and my thought leader self is going to make millions ...
What do you think about geo-location? Have you received discounts or benefits from checking in somewhere? Are you concerned about your privacy?