By Alexandra Jardine, mediaweek.co.uk, Wednesday, 24 November 2010 07:00AM
A few months ago, a Facebook friend in New York posted that she had ‘checked in’ at Wal-Mart.
She was using location-based social networking service Foursquare, more commonly used by people to advertise that they have just arrived at a hip restaurant or a newly opened bar. Some of her Facebook friends commented that this, really, was TMI: too much information.
But is it? Fast-forward to autumn 2010 and advertisers and brands, particularly in the retail and catering space, are scrambling to catch the next big wave of social networking: location. Although still small-scale in the UK, location-based social media is rapidly gaining in popularity in the United States, with brands such as Foursquare, Gowalla and Loopt at the forefront (see below).
At the same time, geo-targeted advertising specialists such as Ji-Wire are providing more opportunities for advertisers to think local. And Google is focusing on location more than ever before, thanks to last month’s launch of its Place Search option and its Google Latitude location-sharing feature.
However, Facebook’s entry into this space could provide the critical push. After launching Facebook Places for the iPhone in September, earlier this month Facebook announced a number of new features for the service, as well as its availability on Android smartphones.
These include the ability to ‘tag’ friends when someone ‘checks in’ at a location and to add photos. But, most importantly for advertisers, another new feature will allow companies to offer ‘Deals’ through Facebook Places.
Users in a particular location will be able to see that a local business is offering a Deal - for example, a two-for-one offer on coffees - and then ‘check in’ via their mobile phone and claim it, only needing to show the cashier the button on their phone when they arrive at the store.
The ‘Deal’ will show up in their Facebook news feed, encouraging friends in the area to come along and claim one too. There will also be loyalty-style deals, as well as deals that customers can claim together in groups with their Facebook friends.
Brands on board with the new Facebook Deals in the US include Gap, which is giving away 10,000 pairs of jeans, and North Face, which is giving $1 to charity every time someone visits a store or ‘checks in’ at a National Park.
"Our vision is to create engagement between local businesses and their users," says Henri Moissinac, director of mobile at Facebook. "We think it’s really important to add location to the social graph that we’re making."
Facebook claims not to be competing directly with rival ‘check in’ services such as Foursquare and has formed partnerships with these brands so users of Facebook Places can see who has ‘checked in’ using other services.
"We are trying to develop a platform and then work with third parties, just as we do on games with the likes of Zynga," says Moissinac. Similar brands like Loopt recognise we are going to educate a large chunk of the mobile internet about location-based services."
However, some social media commentators believe Facebook could crush the other services available. Facebook has more than 200 million mobile users who will potentially use Places, whereas Foursquare - until now the leading brand in the check-in area - has three million users. Unsurprisingly, Foursquare's co-founder Dennis Crowley has been openly critical of Facebook’s move.
Dean Dempsey, managing director at brand engagement agency Made, says: "Foursquare is still very niche in the UK. Aside from brands like Nike and Red Bull who are in the youth market anyway, marketers have found it hard to understand the benefits of location-based social media. But more brands will get in there now Facebook is on board, and the first advertisers to use it will flourish."
Others believe that Foursquare - which also has a gaming element, where users collect points and trophies - could still benefit alongside Facebook.
"Foursquare is a relatively cheap way to get into location-based media, because you can sign up from within their platform," says Helen Lawrence, senior social media planner at Dare. You don’t have to deal with the company and you can do it for just one store or one outlet if you want to."
While location-based services are most useful for retailers or brands that have a natural footfall, there are other ways for brands to become involved: for example, through events and retail tie-ups. "Where this will work will be all about partnership," says Dempsey from Made. "For example, if a drinks company wants to reward loyal customers, it could partner with a bar chain and give special offers to customers who chose its drinks in that particular location."
Another way for consumers to share their location is via Twitter, which last year introduced a service that allows users to add a location to their tweets.
However, observers say location-based tweeting is still very much in its infancy, mainly because of privacy issues - rather than ‘checking in’, Twitter users either have their location button switched on or off.
But for advertisers looking to target consumers by location, another option is offered by services such as Ji-Wire, which launched in the UK last month.
Its deal with BT Openzone means it is has access to users of Wi-Fi networks in more than 4,000 ‘hotspots’ - and can target them with localised ads when they log on. The first advertiser, insurance firm Hiscox, signed up this month and will integrate its digital media campaign with local poster activity.
Peter Jones of JiWire Europe says that, similar to knowing that users have ‘checked in’ using social media, JiWire instantly knows a person has logged on in a Wi-Fi hotspot in a particular location - for example, a branch of Starbucks.
But whereas the likes of Foursquare or Facebook Places might be useful for that particular branch or chain to run a promotion, Ji-Wire's network can be used by brands across the spectrum. "In a way, the venue becomes almost irrelevant; it’s more about location and the audience profile," says Jones.
Of course, the question of how many consumers will choose to share their location remains. But with people getting more used to the idea, the potential is enormous.
Facebook's Moissinac says: "We are only at the start of what will be a very large market. Location will become an essential element of social interaction."
Founded: March 2009.
Users: Claims to have more than three million worldwide.
How it works: Users ‘check in’ to venues using their smartphone to let their friends know where they are. They can also collect badges for the number of times they visit a venue – the most frequent visitor can become the ‘mayor’. Brands can then target participants with promotions or special offers, for example offering the ‘mayor’ free drinks.
Users: Over 300,000 ‘passport holders’.
How it works: Users collect ‘stamps’ on their Gowalla ‘passport’ each time they visit a venue. Companies can ‘claim’ their business and then target consumers who visit with special deals or rewards. Other organisations, such as National Geographic, have also created special ‘trips’ for consumers.
Founded: September 2010.
Users: No numbers disclosed as yet.
How it works: Users of Facebook can opt-in to use Facebook Places and then ‘check in’ at various venues using their smartphone. They can also tag friends and add photos, and the story appears in their newsfeed. Companies in the US can now offer ‘Deals’ to local users.
Users: Claims to have more than four million.
How it works: Users let their friends know where they are located via maps on their phones, and access local content from the likes of Zagat and Citysearch.
How it works: Users opt-in to share their location via their Google account. They can see where their friends are, in real-time, using Google Maps.
Founded: 2003 (launched in the UK in October 2010).
Users: Says it will reach more than 4.6 million people a month.
How it works: Targets users of wi-fi hotspots with geo-targeted ads based on their location.
This article was first published on mediaweek.co.uk