It’s All About Location, Location, Location

Location-based services (LBS) are online, mobile applications that enable users to share their current location information with others. Typically installed on mobile devices like the iPhone, Blackberry or Android phones, LBS apps have gained early adopter and some early majority traction in 2010, with further rapid growth expected in 2011.

There are LBS-specific social networks like Foursquare, Gowalla, SCVNGR, Loopt and Google Latitude, and also the major social networking sites including Facebook and Twitter have location-based functionality – Facebook Places on Facebook and geo-tagging of tweets on Twitter. Usage of LBS is growing very quickly – Foursquare grew from 500,000 users in March 2010 to over 5 million today, and when Facebook rolls out Facebook Places globally, it will be exposed to over 200 million users currently using Facebook Mobile.

LBS allow users to “check-in” to locations including restaurants and bars, streets, parks, buildings and essentially any other locations around the world (a Foursquare user even check-in at the North Pole). This virtual “check-in” is then shared with the user’s network of friends on the service, generally with options to also share this information on other social networks like Facebook and Twitter. The sharing of location enables users to find out where their friends are, where they frequent, what they like, and other useful location-based information.

This creates a new opportunity for brands to engage with consumers, leveraging location data to more effectively micro-target potential customers and create awareness through establishing a branded presence on the most relevant channels.

There are also many mobile applications that integrate LBS functionality. Two popular examples are Foodspotting and Instagram.

Foodspotting is a food-specific LBS, where you can take photos of food that you having at restaurants and tag the location of the restaurant. It enables other users to quickly find food options that are close to their current location by flicking through a stream of food photos.

Instagram is a social photo-sharing app that enables you to take a photo and then tag the location of your photos. Users can follow other users (or brands) like on Twitter and receive a stream of their photos. Both services allow you to check-in via Foursquare within the app itself. LBS generally have an open API that allows other apps to make use of its location data and check-in functionality.

Foursquare & Facebook Places

As Foursquare is getting the most traction as a standalone LBS, let’s dive deeper into what functionality is available on the service. Foursquare was launched in 2009 by Dennis Crowley (who founded a similar service called Dodgeball which Google acquired in 2005 and discontinued in 2009) and Naveen Selvadurai. The app is currently available on iPhone, Android, Blackberry, Ovi, Palm and Windows Phone.

Like all LBS, Foursquare enables users to share their location by checking-in, sharing to their network of friends on Foursquare by default, with the option to also share their location on Facebook and Twitter. Users must be connected before they can view their friend’s check-ins. Users can also include a maximum 140-character message with their check-in as well as a photo. The app also allows users to add tips to the location (e.g. “Best fried chicken in the city!”), and add tips into a To-Do list to remind them to visit a certain location based on the tip. A photo can also be uploaded as part of a tip.

One of the unique features available on Foursquare is the gaming mechanics of the service, whereby check-ins form part of a social game against all Foursquare users that includes points, Mayorships and Badges.

For each check-in, you earn a certain number of points (e.g. 5 points for checking-in to a new location, 1 point for checking-in to a previously checked-in location, etc). A leaderboard (where the points are reset every week) exists where you can compare your ranking versus your network of friends, and also your ranking versus everyone in your home city.

When you check-in to a particular location the most in the past 60 days, you become the “Mayor” of that location. Competitive Foursquare users fight to gain and maintain their mayorships for their favorite venues, and are sometimes incentivized by the venues or brands when they become mayor. A simple example of this is a sushi restaurant, where if you are the Foursquare mayor of the venue, you receive some free sushi for each visit. If another user then takes over as the mayor as they have checked-in to the venue more than you, you receive an email notification informing you of your loss of status and who the new mayor of the venue is.

Foursquare also has badges which you can earn when you achieve a certain milestone. For example, your first check-in earns you a “Newbie” badge. Check into 50 different venues and earn the “Superstar” badge. Check into airports 5 times and earn the “JetSetter” badge. Each time you earn a badge you receive an email notification about the badge that you earned. Again this creates a competitive element for users to continue to engage with the service. As you can view your network of friends’ mayorships and badges, competitive gaming mechanics is created.

From a gaming aspect, Foursquare encourages its users to explore their cities, try out new venues and do things outside of their norms to gain points and new badges. With incentives from venues and brands, this concept is further brought forward, allowing users to engage both in the physical world, as well as with the brand.

Foursquare provides self-service tools for business owners to claim their venues, create special offers (including Mayor specials for just the mayor, check-in specials, frequency-based specials, and more), and access to real-time analytics on the check-ins to their venue. Special offers are shown to users when they check-in at or nearby a venue with an offer.

Facebook Places has the potential to create a significant impact on the broader, mainstream use of sharing location data due to its 500 million user base (200 million using Facebook Mobile) but the functionality has yet to be rolled out globally. It is currently only rolled out in selected markets including the US, UK and Japan with plans to roll out to all markets by the end of 2011. It is available through the Facebook app on iPhone, BlackBerry, Android, HP webOS and Windows Phone 7.

Facebook Places works in much the same way as Foursquare without the game mechanics. You can check-in to venues, see where your networks of friends are checked-in to, tag people that you are with and be alerted when you check-in and a friend is nearby. Facebook Places also allows businesses to include deals and offers to incentivize users to check-in.

Brand Engagement on Location-Based Services

What does this mean for brands? Three words that will excite all brand managers and marketers worldwide: “word of mouth”. When users share where they are with their network of friends through a LBS, they are sharing a very critical piece of information that brands can take advantage of – context. Social networks provide information about you but what is critical for brands to also know is the context of your current status, with a key element being location.

A wide range of brands use Foursquare to engage with consumers – brands like Starbucks, to hotels like the Wynn Las Vegas, to luxury brands including Jimmy Choo, Louis Vuitton and Marc Jacobs have leveraged Foursquare’s reach, creating branded experiences through tips, contests involving check-ins and opportunities to earn branded badges.

Creating branded experiences through tips presents an opportunity to associate the brand to specific venues or experiences that are aligned to the brand’s mission and values. This does not at all need to be associations to the brand’s stores – e.g. Louis Vuitton providing tips for just Louis Vuitton stores. Louis Vuitton’s brand presence on Foursquare actually provides tips in London including for Trafalgar Square, Buckingham Palace, London Eye and The Ritz London. This indirect association from “owned media” gives the brand targeted exposure (and for free, at least for now).

Contests that brands have run on Foursquare include following a brand’s check-ins and if the user can get to the location within a limited period of time, they win a prize, and photo contests for the best photo taken during a check-in.

Branded badges allow brands to uniquely reward their loyal customers on Foursquare. When a user is awarded a badge they are able to share the event on Facebook and/or Twitter and the badge remains permanently on the user’s list of badges that their network of friends can see. Brands have given special prizes/invitations to their branded badge holders.

For the service industry like hospitality, Foursquare provides great insights for brands to use location data to deliver exceptional service and a more personalized experience. As a hotel, encouraging and incentivizing users to share their whereabouts is a great way to indirectly push word-of-mouth. The best salespeople in the world will always be consumers who recommend brands and experiences to their friends and family, and so encouraging the sharing of the location information digitally should be an important initiative for brands to gain “earned media”.

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