Although most users today are still extremely wary about being tracked by GPS at all times, the increasing proliferation of mobile is expediting the potential for geo advertising. Additionally, various applications on these devices are specifically addressing the geo opportunity.
foursquare’s and Gowalla’s approach to manually require checkins lets users opt-in, thereby mitigating concerns with GPS inaccuracy, intrusiveness and privacy. Loopt and Brightkite are other popular LBS applications that have taken the same approach. Even Facebook plans to add location functionality within the next month that supposedly incorporates a manual checkin.
The checkin feature alleviates certain concerns for users; however, it is still limiting for potential advertisers:
- Checkins are unconfirmed – as long as I’m near the vendor, I could checkin without even visiting
- There is no visibility into how long a user is at a particular vendor
- A visit does not necessarily mean a whole lot if the user does not purchase anything
Therefore, it is particularly difficult to offer loyalty programs. In fact, some vendors I’ve talked to have refused to offer “Mayor” deals on foursquare because the checkins cannot be validated. And trying to confirm with GPS, cell-tower triangulation, and WiFi access points will give unreliable location results.
The only way to truly confirm a checkin is if a purchase is made. Therefore, the mobile applications that are successful will incorporate some sort of payment component. They need to allow users to link credit card information to their LBS accounts. This addresses the issue of fake checkins.
- Vendors will be more inclined to offer even better deals knowing every visit is legitimate.
- Loyalty programs can extend to other loyal customers beyond the Mayor.
- Vendors will offer deals based not only on the number of visits, but on the number of purchases or the amount purchased.
- More vendor deals will provide greater incentive for users to join which will in turn incentivize vendors to offer more deals – creating a virtuous circle.
With this information, advertisers can target in unprecedented ways. For example, it’s great for Starbucks if they know I’m in the vicinity of their shop, but it’s even better if they know that I like ordering their Chai Tea Lattes. Instead of a display ad saying “Come to Starbucks” they might consider shooting me a promotional ad with fifty cents off a grande Latte.
Location-based advertising (LBA) is effective; LBA coupled with behavior and demographics is extremely effective; but LBA coupled with purchases is the Holy Grail. At the end of the day, purchases are all that matters for advertisers.
Think about how much mind-share you get from someone who logs into your foursquare page everyday. Businesses should be killing themselves for this kind of attention, not shutting it down.
Whenever companies fail to trust customers, they miss huge opportunities. If a customer loves your business so much that they are trying to become a foursquare mayor, then you should be taking them out to dinner. Forget about location validation.
By: Tom Rose on August 9, 2010
at 7:03 am
It’s great for a business if customers are trying to be mayor of your store. That’s obvious. The question is how do you incentivize your customers to do that?
One way, is by offering mayor specials. Another, more effective way, is by offering specials to loyal customers (plural). Most of us believe that we need to go out of our way to become the mayor. Especially at places that offer mayor specials. So we think it’s unattainable and don’t bother. But if we believe we could get some deals by going somewhere frequently, then maybe I’ll go a few more times.
Validation is indisputably better than no validation. That should be obvious too. Purchases allow the business to get to know their customers, so that ads are so powerful they are no longer ads.
By: Cameron Levy on November 5, 2010
at 4:22 pm