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Mobile Marketing 2011/FIRST QUARTER TREND REPORT: WHAT MARKETERS NEED TO KNOW ABOUT LOCATION-BASED SERVICES
In this issue: How location- based services and GPS-enabled apps on mobile devices are changing the way retailers and marketers connect with their best customers 20110228-SUPP-WP1--0002,0003-NAT-CCI-AA_-- 2/23/2011 11:02 AM Page 1
QUARTERLY TREND REPORT INTRODUCTION What Marketers Need To Know About Location-Based Services BY KATHRYN KOEGEL
it’s march 2009, in a crowded bar in Austin, Texas, during South by Southwest (aka SXSW), the Naughts’ answer to Burning Man, with its integration of music, art and technology. Through a sea of swaying bodies and a narrow sliver of a view of the band Starf***er, iPhones eerily light the stubbled faces of twentysomething guys in plaid shirts. In another era, they would be finger- ing cigarettes, tipping bottles of Lone Star (and possibly even listening to the music). But here, they are connected by their apps, and their apps are doing something new. The users are checking in, letting their friends know where they are via GPS, claiming virtual badges, and vying for the “mayorship” of this hotter-that-hot spot. They were the first in, the chosen few, the cognoscenti. SXSW engendered Twitter in 2007, so natu- rally expectations ran high for Foursquare in 2009. Every festival long as I get something out of it, feel free to market to me” is tak- had to have its breakthrough techno-concept. For some in the ing the personalization of marketing to a whole new level. Is this the marketing sector,the coming of age of location-based services her- best thing since Tim Berners-Lee and the World Wide Web, or is it alded an age of marketing in which consumers volunteered their a flash in the marketing/social-media pan akin to Friendster, an location, broadcast it to their real and virtual friends, and bonded early social network that died a quick death as its trendier-than-thou with marketers with the hope of being “app-tly” rewarded. Any users moved on to the next thing? Therein lies the quandary for and every marketing cliché was applied to these services—“holy marketers: hop on a bandwagon moving at light speed and don’t get grail,” “one-to-one marketing,” “right place, right time”—and left behind, or sit it out, wait for the VC fairy dust to clear and decide each seemed to apply. which of these services will achieve the kind of scale and consumer Fast-forward 24 months and we find dozens of VC-backed, loca- connection that demand the attention of national brand marketers. tion-related companies all doing something terribly unique on For those considering LBS as a marketing tactic, the bad news is mobile devices. Foursquare boasts more than five million users, 200 that the train has already left the station, with companies including million “check-ins,” an additional $20 million in VC funding (as of Macy’s and Procter & Gamble having leapt onboard by last holiday June 2010), a $95 million pre-money valuation, and dozens of season. (And they have some remarkable stories to report.) The national marketers eager to engage consumers by whatever means good news: in a sector with super-gaseous levels of hot air, some of possible—especially if it promises to generate the elusive retail foot the smoke has already wafted, and clear winners with easy-to-adopt traffic they crave. services are already emerging. Best of all, those companies that are While using location to target one’s marketing efforts is nothing achieving marketer simplicity, consumer usage and scale all under- new (consider this a shout-out to spot cable and newspapers), the stand that in order to succeed, one cannot completely discard the idea of consumers saying “Yes—use my phone to locate me, and as past. Location can be used to increase the effectiveness of longtime
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QUARTERLY TREND REPORT
➜ DOWNLOAD TABLE OF CONTENTS Key charts are available for INTRODUCTION 2 buyers of this white paper to WHERE DID IT COME FROM? 4 download as Power Point slides. - WHAT’S SO GREAT ABOUT LBS FOR MARKETERS? Use this link to access the slides: TRIANGULATION OF PLACE, TIME, MOBILITY 6 AdAge.com/whitepapers - ASK THE EXPERT: HOW DOES LOCATION WORK ON PHONES AND WHAT ARE PRIVACY IMPLICATIONS? 8 MARKET SIZING AND IN SEARCH OF THE ELUSIVE LBS USER 9 THE MOBILE MOM: MOBILE MARKETERS AND LBS COMPANIES OVERLOOK KEY USER 11 - THE REAL PEOPLE OF LBS LBS COMPANIES MARKETERS SHOULD KNOW 14 LOCATION WHEN YOU DON’T HAVE ONE, OR HOW LBS CAN WORK FOR PACKAGE GOODS 22 - EIGHT QUESTIONS MARKETERS SHOULD ASK ABOUT LBS tactics like couponing, ad targeting and loyalty marketing, and mar- THE FUTURE OF LBS 24 keters need to embrace the concept of the primary household shop- HIGHLY SUBJECTIVE DIRECTORY OF LBS COMPANIES 26 per—in other words, offer women something they want and make it convenient, and they will buy. CHARTS LBS DEFINED, AND REDEFINED 1 GPS CAPABILITIES ARE DRIVING GROWTH IN LOCATION-BASED SERVICES, comScore 4 LBS refers to location-based services delivered through mobile phones and has typically been associated with services like 2 SMARTPHONES WILL BE A MAJORITY IN THE U.S. 5 Foursquare, Gowalla and Loopt that involve a user “check-in” at a BY Q2 2012, Nielsen specific location. A lot of hoops are required to get people to sign 3 SMARTPHONES CHANGE EVERYTHING... on, however. First, he or she has to have a smartphone, has to have INCLUDING LBS USAGE, Nielsen 5 the LBS’ app on that phone, and typically has to find various 4 MOBILE PHONE USE WHILE IN STORE, friends who also use the service. But LBS as defined this narrowly Insight Express 6 is an artificial construct and should be seen as a broader play to use 5 HOW MUCH FUNDING FOR EACH ACTIVE LBS USER? the unique media functions of mobile devices, including location- AdAge Insights 9 based technology. Mobile phones are personal devices—typically 6 LBS IS STILL AN EARLY ADOPTER ACTIVTY, one to each consumer, and with that consumer wherever he or she Placecast/Harris Poll 10 goes. As such, they pose an extraordinary opportunity to reach 7 4% OF U.S. POPULATION USES LBS SERVICES, people in places crucial to marketers, including in-store, on the way Pew Research Center 10 to the mall, with friends and out on the town. 8 THE MARS AND VENUS OF MOBILE MARKETING, Location-based services also encompass a whole host of content Placecast/Harris Poll 12 delivered via both apps and WAP (Wireless Access Protocol) inter- 9 THE LBS LANDSCAPE, DR. PHIL HENDRIX, IMMR 14 faces enabling consumers to input their location in exchange for 10 IS TWO BUCK CHUCK DRIVING TRADER JOE’S personalized information such as store locations, product availabil- WEEKEND SALES? SuperData Research 15 ity, weather conditions, movie times and locations, and restaurant 11 LOCATION CAN IMPROVE RELEVANCE, Placecast 20 reviews and locations. Given this broader definition, LBS promise a unique ability to 12 WHO’S GOT REACH IN LBS? comScore 21 connect with a broad range of people who are displaying intent (to 13 REACH OF LBS APPS, comScore 22 purchase, attend, dine, travel, etc.), but with some very distinct parameters. It is the ultimate in permission-based marketing. Marketers who do not heed the lessons of the internet, now mired in privacy complaints, controversies and legislation, will do well to steer clear. This document and information contained therein are the copyrighted property of Crain Communications Inc. and Advertising Age (Copyright This Ad Age Insights trend report will give you an overview of 2011) and are for your personal, noncommercial use only. You may not how LBS is being used, what types of consumers use LBS, and reproduce, display on a website, distribute, sell or republish this document, or the information contained therein, without the prior written consent of which LBS companies have started to work successfully with mar- Advertising Age. Copyright 2011 by Crain Communications Inc. All rights keters on campaigns. reserved.
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QUARTERLY TREND REPORT Where Did It Come From?
location-based services are by no means new. Dennis CHART 1 Crowley, the founder of Foursquare, though affecting a rumpled, just-fell-out-of-his-dorm-room-bed image, was actually an ana- GPS CAPABILITIES ARE DRIVING GROWTH IN LBS lyst at Jupiter from 1998 to 2000. He would build a service called Dodgeball in 2000, which brought game mechanics and location The proportion of GPS-enabled devices in the market grew sharing to mobile devices. Unfortunately, it arrived a bit too 17% year-on-year; LBS use grew by 40% early, before the iPhone and apps changed everything. The serv- Percent of U.S. mobile market: ice was sold to Google in 2005, which had already developed a SEPTEMBER 2009 competing service called Latitude. (Google shut down Dodgeball 69.1% SEPTEMBER 2010 in 2009, but to date, in its typical, “let-the-market-decide” fash- ion, has not aggressively marketed Latitude. No one interviewed 59.5% for this article even considered the product to be on the LBS radar.) As Di-Ann Eisnor, VP-business development for Waze, noted, “You’ve got to give Dennis credit. He had an idea, he acknowledged it was too early, but he stuck with it. With Foursquare, 28.9% he basically relaunched Dodgeball 20.7% at the right time.” By June 2010, the U.K. edition of Wired magazine had crowned Crowley “the new king of social media.” LBS was made technically possi- GPS-enabled Location-based ble by a mandate from the FCC devices services* requiring that 911 calls via cell phone be locatable down to 300 *Includes weather, maps and any “location aware” type of content as location-based. Three-month average ending September 2010. Country: U.S., N=32,044. meters. This process was mostly Source: comScore MobiLens completed by the end of 2005, but there remained one considerable CROWLEY: hurdle for marketing-related appli- Founder first of Dodgeball, sold cations. In order for a marketer to launched its Family Locator application, which enabled sub- to Google, and then Foursquare access that data, it had to negotiate scribers to find their kids via the location of their cell phones— with the carriers who controlled it, quite a different objective than finding which bar your friends are and who fretted about privacy issues. Locating mobile devices hanging out in. with carrier data is also called “cell phone triangulation,” as it But when Apple launched the iPhone in 1997, it gave a giant uses the position of a phone in proximity to cell towers. Other boost to LBS. Dan Gilmartin, CMO of Where, a hyperlocal avenues opened up in 2002, when Nextel introduced a phone mobile ad network that also has a consumer-facing LBS app, with a GPS chip. Since 2003, all Sprint phones have been GPS- noted: “The iPhone opened up location to Joe Developer. Prior to enabled. In 2005, MapQuest, uLocate, RIM and Nextel launched this, you had to have a relationship with a carrier.” Suddenly, a MapQuest Find Me, a friend-finding service on GPS-enabled legion of app developers had access to a simple way to trigger the mobile phones. MapQuest Find Me let users find their location, GPS device on a phone to provide a range of services that use access maps and directions, and locate points of interest. They location (see chart 1). also could set up alerts to notify them when network members Foursquare became the media hot date of 2009 and into 2010. arrived or departed from a particular area. Then, in 2006, Sprint It was so talked about, in fact, that Facebook, the biggest gorilla in
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CHART 3
SMARTPHONES CHANGE EVERYTHING… INCLUDING LBS USAGE U.S. mobile media usage penetration , Q3 2010 Text Messaging/SMS 61% 85%
Internet CHART 2 17% 75% NIELSEN SAYS THAT SMARTPHONES WILL BE A MAJORITY IN THE U.S. BY Q2 2012 E-mail 15% Projected smartphone penetration 75% projected App DLs 61% 9% 90% 61%
% 50 Picture Messaging 33% 59% % 10 39% Location-based services-GPS 2008 2009 2010 2011 2012 7% 50% Based on survey data and projections. Source: Nielsen
Game DLs 7% the interactive space aside from Google, took notice. In August 37% 2010, Facebook turned on location sharing globally for all 500 million of its members who had used the service. It should be noted that 500 million (like all numbers used in LBS) is a “poten- Video-Mobile TV tial” number, getting much smaller when one takes into account 5% 27% it applies to U.S. activity alone, to those who have actually down- loaded the app on their mobile devices, and to those who choose to share their location. Ringtone DLs So far, Facebook is not revealing any Facebook Places usage 15% numbers—but certainly, the potential is there. Could Facebook 26% Places become the killer of all other LBS? Those interviewed for this report concur it isn’t as compelling as LBS services that have Wallpaper-Screensavers DLs added game dynamics. They also note that Facebook Places so far 10% lacks the consumer affinity (and the fun factor) that Foursquare 25% has achieved. One person said he simply did not want Facebook to have still more information about him. As of yet, there is no FEATURE PHONE Mobile Commerce OWNERS way to predict the destiny of Facebook Places, or how Facebook 5% will promote the service. With 2010 bringing so much confusion SMARTPHONE 22% and so much controversy regarding the protection of Facebook OWNERS
user data, location could be the tipping point for the social net- Source: Nielsen work in respect to privacy.
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WHAT’S SO GREAT ABOUT LBS FOR MARKETERS? TRIANGULATION OF PLACE, TIME, MOBILITY
■ Reach of mobile phones Mobile phones have achieved 85% penetration of the U.S. mar- ket, according to Nielsen. With numbers like that, mobile’s reach bests even the internet, which has stalled at a penetration rate of around 80%. All cell phones can be location- triggered if the user opts in to the service or program. PHONES ARE PERSONAL RAZR promised owners they would bend it like Beckham; ■ With the advent of smartphones, mobile is (left) scanning products for more information media Smartphones have unleashed the vast potential of GPS and using mobile phones as multimedia devices. And smartphones ■ Precision targeting are expected to overtake feature phones by Q2 2012, according Marketers have long used location in the form of ZIP codes, to Nielsen (see chart 2). Smartphones increase the likelihood of Census block groups and cable head ends to imply demography consumers engaging in a variety of activities on the phone, or reach specific regions.As Dan Gilmartin of Where said,“With including LBS (see chart 3). What is the point of a phonebook if mobile, DMA now stands for Does Not Matter.” True location you can not only find a retailer but then map how to get to it, on mobile devices trumps older forms of location targeting for click to call it, or use an app to let you know whether a product precision. is in stock? The phone can even voice direct your travels and mention points of interest including retail locations. ■ Personal nature of the marketing Cell phones are distinct from other media devices in that they ■ Only media device taken into the retail location are seen as an extension of style and personal choice. Have peo- This is not just a phone—it’s a comparison-shopping device (see ple ever created a theme song for their TVs or PCs or even iden- chart 4). Mobile devices not only enable product searches, but tified themselves as an iPhone or BlackBerry or Android person? with QR-code readers and apps like shopkick and Booyah’s And the connection thing didn’t start with smartphones: MyTown, consumers can zap a product or display to access more remember how hot people thought they looked sporting the information or get a coupon transmitted to their device. Motorola RAZR? Remember how odd it was when stockers in grocery stores started zapping merchandise with scanners to take inventory? ■ Ability to socialize the info Now imagine what it will look like as hoards of shoppers click Facebook is one of the top downloaded apps on every mobile and zap. platform. With 500 million users globally, having this app enables consumers to share so much about products wherever ■ Location as predictor of purchase intent they are. (And share they do. Did you ever think you would see As Alistair Goodman, CEO of Placecast, put it: “Where we are so many people photographing and creating status updates and when we are there says a lot about what we are interested about what they eat?) All LBS applications encourage people to in. On a Saturday morning, a consumer entering a downtown share their brand preferences and experiences with their friends. shopping area with money and a phone in their pocket is high- ly likely to buy something. With mobile, brands have a better ■ Addiction to games and what it leads to way of influencing consumers close to the moment of truth.” It’s no surprise that many of the LBS players have taken notice of
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QUARTERLY TREND REPORT
CHART 4
OVERALL, 82% OF MOBILE PHONE OWNERS HAVE USED THEIR PHONES IN STORES Here’s what they do and who does it most
USING MOBILE PHONE WHILE IN STORE OVERALL WHO IS DOING THIS THE MOST?
Been on the phone and asked the person you 36% Females 18-34 (50%) were talking to about a product
Used your mobile phone to take a picture of an 14% Smartphone owners (27%); item to send to someone 18-34 (21%)
Used your mobile phone to search for an 8% Males 25-34 (23%); item to find reviews Smartphone owners (19%)
Used your mobile phone to search for an item 7% Males 25-34 (20%); to find better prices Smartphone owners (19%)
Looked for a coupon on your mobile phone 6% Males 25-34 (21%); Smartphone owners (16%); Females 18-24 (14%)
Used a coupon that was on your mobile phone already 6% Males 25-34 (17%); Smartphone owners (14%)
Used your mobile phone to find a recipe 6% Smartphone owners (16%); Males 25-34 (13%)
Made a purchase using your mobile phone 5% Smartphone owners (13%); Males 25-34 (12%)
Used your mobile phone to search for an item to 5% Males 25-34 (16%); Males 18-24 (12%); compare nutritional information Smartphone owners (12%);
Scanned a barcode with your mobile phone 4% Smartphone owners (10%)
Source: Insight Express, Digital Consumer Portrait, September 2010
the phenomenon of game mechanics. Game mechanics refers to vegetables) they can show off to their friends. Casual gaming the rewards, levels of achievement and virtual competitions that online—and, increasingly, on mobile phones—is more a female make interactive gaming so addictive. It’s important to not dismiss than male behavior. Many of these LBS services work with both game mechanics and virtual goods as merely kids’ stuff. social concepts and game mechanics to get people to actually buy Companies like Zynga have shown that adults will do all kinds of things: virtual goods—along with established commerce plays like things, including weeding virtual gardens and making mafia hits, eBay and Amazon, through their respective apps—are the gate- just for some level of achievement (i.e., the harvesting of virtual way activities of what will become m-commerce.
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ASK THE EXPERT
HOW DOES LOCATION WORK ON PHONES ANYWAY, AND WHAT ARE THE PRIVACY IMPLICATIONS?
Questions for Alistair Goodman, CEO of Placecast, which owns ShopAlerts, a location-triggered SMS service
What’s your relevant location?
“Knowing where a phone is, that’s relatively easy. But turning that into relevant content is tough. You have to understand where the businesses are. The weather, the time of day and day of week all play a role in the relevancy equation. For example, Madison Square Garden for a New York Knicks game one night is very different than the next when Celine Dion belts it out. Increasingly the positioning problem will become a commodity that everyone will have access to. What’s tough is the relevance.” - ALISTAIR GOODMAN
What are the primary methods of program, they are then asked to Network-based positioning pros: targeting location on mobile “Please confirm you are willing to share It works on any phone (not just phones? your location.” We remind them of this smartphones), no app is required, and it There are two basic methods. On periodically and they can text STOP to is more than sufficiently accurate to smartphones, you can activate the GPS opt out at any time. We also do NOT create marketing programs that scale. on the phone in conjunction with an store any information on the UDID, the application to position the user. The code that identifies the specific phone Network-based positioning cons: second is network-based: the carriers that acts kind of like a browser cookie. It’s not as accurate. In the U.S., carriers have the ability to tap into their location make it available, but you have to pay infrastructure and use it to target What are the pros and cons for them to use the data. U.S. carriers work marketing. This is accomplished each method? with intermediaries like Loc-Aid and through cell-tower triangulation. GPS Pros: Accuracy, and the fact that Location Labs that have integrated in the U.S., there is no cost to access with the carriers and then resell the What are the privacy that info. carriers’ location data to third-party implications? GPS cons: GPS requires an app, so the services. It used to be a fairly In all cases, the sourcing of the user must download the app and cumbersome approval process to get consumer’s location on the planet provide permission. The app also has to access to the data. As of last year, it’s requires consumer permission. The be on to get a GPS location. The user getting easier. For programs overseas, CTIA and MMA guidelines are very has to be actively using LBS to get we’ve been able to integrate directly specific that explicit permission must location-related information or connect with a carrier’s location infrastructure be given to access the user’s mobile with friends. Now in some cases, apps so there is not an intermediary and, phone location. For our service, can enable GPS to run in the hence, less friction. ShopAlerts, we use a double opt-in in background, but it’s still a battery the U.S. After a user texts in to enter a drainer.
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QUARTERLY TREND REPORT Market Sizing and In Search Of the Elusive LBS User
so where are these hand-raising, finger-tapping influentials usage. Another note: the download numbers are not factored by who use LBS, and how many of them are out there? As it turns U.S. usage. Foursquare, for instance, sees 40% of its usage out- out, this is not so easy a question to answer. First off, companies side the U.S.While 70% of Facebook’s 500 million users are out- in the space do not report actual monthly user numbers: they side the U.S., the company does not divulge how many of the talk downloads. Reports from players such as mobile app analyt- 200 million consumers who access the service via their phones ics company Flurry show that of all downloaded apps onto are inside or outside the U.S. So, how many people in the U.S. smartphones and feature phones, 75% don’t make it past the 90- are actively using Facebook Places? It’s anyone’s guess. day mark. In most of business, we accept the 80/20 rule (80% of Four studies released in the second half of 2010, from Pew, business/usage from 20% of customers), so let’s use that as a Forrester, Insight Express and Placecast, pegged market penetra- benchmark and do the math (see chart 5). One executive at an tion of check-in-type services at around 5%. (Full disclosure: I LBS company interviewed for this report related that its active conducted the Placecast study on behalf of a client of mine, using user base was 35% of those who had downloaded, adding that a Harris poll of a nationally projectable sample.) The that’s a good benchmark in the industry. So we will be more Placecast/Harris poll indicated that 5% of the U.S. population generous in our chart and use that figure to calculate actual believes it is important to use a service like this (see chart 6).Pew
CHART 5
LBS: FUNDING VS. DOWNLOADS PER PROJECTED ACTIVE USER Venture capital dollars raised per user as of Jan. 17, 2011. When will LBS scale? Numbers are low now.
VC FUNDING RAISED* MOBILE APPS ACTIVE USERS ACTIVE USERS DOLLARS RAISED PER COMPANY DOWNLOADED GLOBALLY (35% ACTIVE-USER BASE) (80/20 RULE) ACTIVE USER
Facebook Not broken out but 200,000,000 n/a n/a $123.81 Places $1.3B for Facebook
Foursquare $21,400,000 5,000,000 1,750,000 1,000,000 $12.23
Gowalla $10,400,000 600,000 210,000 120,000 $49.52
Loopt $17,600,000 4,000,000 1,400,000 800,000 $12.57
SCVGR $19,800,000 700,000 245,000 140,000 $80.81
Booyah (My Town) $29,500,000 3,100,000 1,085,000 620,000 $27.19
Waze $37,000,000 2,300,000 770,000 440000 $48.05
Company data and press releases as of Jan. 1, 2011
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CHART 6 CHART 7
LBS IS STILL AN EARLY-ADOPTER ACTIVITY WITH 4% OF THE U.S. POPULATION USES LBS SERVICES GREATER INTEREST FROM MEN Pew: LBS activity skews younger, more male, more urban Percent of respondents who say “extremely/very important” activity ■ TOTAL ■ MALE ■ FEMALE All internet users 4% Text message Men 6* 40% Women 3 39% 42% Race/Ethnicity White,non-Hispanic 3% Access the internet Black,non-Hispanic 5 25% Hispanic (English- and Spanish- speaking) 10* 30% 20% Age 18-29 8%* Search for a retail location 30-49 4 14% 50-64 2 18% 65+ 1 9% Household income Access local information/activities via an “app” Less than $30,000/year 3% $30,000-$49,999 6 12% 15% $50,000-$74,999 6 10% $75,000+ 4
Education attainment Access social networks 5% (e.g. Twitter, Facebook, MySpace) Less than high school High school 3 11% 14% Some college 4 9% College+ 5
*Indicates statistically significant difference Source: The Pew Research Center’s Internet and American Life Project, Aug. 9-Sept. 13, 2010, Health Tracking Survey N=3,001 adult internet users ages 18 and older, including 1,000 cell phone interviews. Make a purchase Interviews were conducted in English and Spanish. Margin of error is +/- 3% 7% 9% 5% related that 4% used one (see chart 7), as did Insight Express. Both the Placecast/Harris and the Pew polls noted higher usage Location-based social networking among men than women—something marketers as well as LBS (e.g. checking in on Foursquare) companies should take note of. 5% 7% 3%
Respondents who answered “Extremely/very important.” N=1700, Base for this question=50 Source: Placecast: The Alert Shopper II, Harris Poll, July 2010
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QUARTERLY TREND REPORT The Mobile Mom: Many Mobile Marketers and LBS Companies Overlook Key User
as much as we may want to believe that the world has THE REAL PEOPLE OF LBS changed since the birth of the women’s movement, women remain the primary shopper for everything from groceries to healthcare to clothing. Even in outlier zones with a greater WHERE ARE THE ELUSIVE LBS USERS? number of stay-at-home dads, women are the listmakers, the meal planners and the clothing buyers. I learned just how pro- As part of this report, I sought out real-life experiences found this gender inequality is in 1990, doing the first with LBS. And by “real life,” I mean I wanted to talk to research study I ever worked on: the American Male Opinion people who did not work in media, did not live specifically Index, on behalf of Condé Nast’s GQ magazine. We set out to in New York or the Bay Area, and had no relation to show how things had changed in the culture, how men had venture capital-funded startups. It seemed like an easy taken charge of their lives and how their purchasing behavior task—especially given that as of August, Facebook turned had changed (which ended up being true, kind of). Indeed, on Places so all of its users could broadcast their location young male urbanites were shopping for clothing and caring to their friends more about personal grooming; they were Indeed, the quest for the elusive LBS user turned out to be Sisyphean. Every time I thought I was on to one, it Men are most even beginning to buy products such as was revealed that the person had some connection to likely to see fragrance for themselves. someone in media who they had heard about the services features like LBS Alas, we found that the minute a from. How did I do this grandmother-esque research? I as a positive, and woman walked through this man’s door tweeted, I texted every Williamsburg, Brooklyn-dwelling have fewer and shared his bed more than a few times, twentysomething I had ever encountered, and I posted privacy he reverted to the behavior he learned my queries on two social networks as well as a LinkedIn concerns. They growing up, and the women took over all group focused on location-based marketing (where there also like game the shopping. (There isn’t a lot of evi- would even be a distinct advantage to people giving me mechanics and dence that behavior has changed in the names). I even used an old-school landline to call long-lost achievement last two decades.) relatives under the guise of catching up—before asking and showing off Thus, in respect to location, technology how their kids away at college or their neighbors used the in front of their and shopping—ostensibly the golden tri- services. I asked everyone I interviewed for this article friends angle of what LBS represents—the sexes behave very differently (see chart 6). Men whether they knew people who fit my criteria. They are most interested in doing the broadest tweeted, they Facebooked … and we all came up with next range of things with their phones—and women are influenced to nada. by their behavior, eventually. Men are most likely to see fea- As with Twitter, LBS services don’t seem to be popular tures like LBS as a positive, and have fewer privacy concerns. among college-aged kids. Students from near and far (the They also like game mechanics and achievement and showing University of Arizona, Arizona State, the University of off in front of their friends: all things at which services like Miami, Oberlin, Temple, Wesleyan, Bennington) were Foursquare excel. On the other hand, women absolutely love contacted. Most of the women I communicated with were their cell phones and are great communicators and socializers. not even aware of LBS services. The guys had more As the primary shopper in a household, she also is the one awareness but said they didn’t use such services—another most concerned with convenience. Ever try holding down a dead end. One executive from an LBS company had full-time job, managing two kids and still get dinner on the insisted, however, that the services were popular among table, the homework done and the laundry lovingly folded college students. When pressed, the exec said LBS was every night? Women are the greatest potential audience for these types of services as they apply to retail and promotions. Continued on Page 13 Indeed, the Harris poll about location-related marketing
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showed that consumer interest popped highest among house- ing, and even m-commerce beside the sandbox. holds with children under six. The phone helps while away the tedium and is the mom’s Anyone who is in the demo (or has spent any time at a addiction and her connection point to friends, as well as the park playground) can attest to how “over-the-fence” chatting worlds of work and no kids. among neighbors has given way to status updates, photo shar-
CHART 8
THE MARS AND VENUS OF MOBILE MARKETING: CONSUMER INTEREST IN TEXT-BASED (SMS) MARKETING
Women more interested in groceries, beauty and fashion; men in electronics. Almost equal interest in restaurants, fast food, travel, health.
56% Grocery coupons and promotions 80%
61% National restaurant chain promotions 67%
54% Entertainment products and availability 62%
48% Fast food menu items and promotions 51%
14% Beauty and fashion 51%
33% Coffee and beverage promotions 40%
49% Electronics product offers and promotions 35%
36% Travel services, special rates and amenities 35%
24% Health-related offers including gym services 25%
19% Convenience store products 23%
12% Home furnishings 20%
13% Infant and child-related products 18% MALE 24% FEMALE Bar or nightclub offers and promotions 17%
30% Sporting goods and equipment 16%
5% Other 4%
3% Source: Placecast: The Alert Shopper II, Harris Poll, July 2010 None Base: Those who responded “At least somewhat interested.” 4%
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THE REAL PEOPLE OF LBS
FROM PAGE 11 better in urban areas and not so useful Other LBS? “Nah, I know of Yelp and for the suburbs. Offers I have seen are a Facebook. But I am loyal to Foursquare. I free beverage at an IHOP, or deal on an think Yelp is kind of similar, but big at the University of Texas in Austin— appetizer at a chain restaurant. It has Facebook is just a straight check in. a fine example of sample bias, seeing as not been adopted by any of the local the SXSW festival is held in that city and Percent of your friends using it? stores in Monmouth County.” “Probably more say they find it UT students are a major presence there. How many times have you been a annoying because it is tied in with my After two months, I came up with a mayor? “Mayor of 17 places, easy in the Facebook; 10-15% of my Facebook few interesting users whose experiences ‘burbs.” friends are on it.” were worth reporting. (And one New Other services tried: “Gowalla. I like Yorker, Katie R., slipped through in my the idea of Gowalla and the tours people quest to find a young woman using LBS.) have created in local areas. The Katie R. Freedom Trail in Boston, Pub Crawl in Age: 26 Alex D. Austin, Central Park Tour, but I have not Residence: New York City Age: 23 taken advantage of any of them. Profession: Journalist Google Latitude is cool but no one I Residence: Edison, N.J. know uses it. Yelp is fine but I feel the LBS service of choice: Foursquare Profession: Accountant at a major information is sketchy. Facebook Places How long using it? “6+ months” investment banking firm is not where I want that service. “ Where do you check in? “Bars, LBS service of choice: Foursquare Percent of Ted’s friends who use it: restaurants, coffee shops, major How long using it: One year “Very small, less then 5% discuss it or national retail stores, local retailers. use it.” Have been mayor of a few salons and Where he checks in: “Mostly work, a gym.” bars and events like sporting and How many times has Erika been a concerts” mayor? “I currently have 18 Other LBS? Facebook Places, Yelp [mayorships].” (1 more than Ted!) Thoughts on the use of personal Percent of friends using it? “Most of location: “It’s part of the ‘coolness’ Why she uses it: “Mainly do it to have them occasionally use Facebook factor that the service knows precisely fun with hubby, trying to oust each Places because they already have where you are. It’s kind of a status thing, other or achieve more badges.” Facebook accounts...probably about like ‘I am here and you are not’ kind of Percent of Erika’s friends who use it: 10% of my friends use Foursquare.” feeling.” Less than 1%. Location sharing? “It doesn’t bother Others you know who use it: “No girls. me. I think the biggest misconception All the people I know who use it are guys about Foursquare is that non-users really.” Mike G. think it automatically tells everyone where you are. In reality, you choose Percent of friends who use it: “30%” Age: 32 when to tell your friends your Residence: Medford, Ore. location. I don’t view it as more Profession: Executive chef dangerous than verbally telling your Ted K.and Erika K. LBS service of choice: Foursquare friends that you’re going out of town Age: 40 and 44 How long using it? Probably 3 years or out to dinner.” Residence: Neptune City, N.J. (Note: This is actually not possible! But O.K. to be marketed to through Profession: Attorney and paralegal, interesting that he thinks this.) location? “Sure, if I get discounts respectively; married Gen X couple Where do you check in? “Bars, out of it.” LBS service of choice: Foursquare restaurants, coffee shops, national and local retail stores, local retailers, gas How long using it? Since April 2010 stations, ball parks, airports, middle of Where Ted checks in: “I check into the ocean, usually anywhere. And if most restaurants and bars. I check into they are not there I’ll create the spot.” work once or twice a week, I check into (Note: Power user!) places I travel too, other offices, How many times have you been a courthouses, it is a secondary record for mayor? “Was up about 20, now at the me to look at. lonely six. I moved from Somerville, so I I look at the places for potential lost a lot of mayorships. Need to build deals when out, but I feel that service is them up again.”
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the lbs space has grown so rapidly, and companies con- CHART 9 tinually evolve business models to get to profitability in such virgin territory.It was hardly on anyone’s radar as lit- THE LBS LANDSCAPE tle as two years ago, which is why it remains difficult to delineate among the players. One who keeps close tabs on Dr. Phil Hendrix’s map of LBS companies by category the space is Dr. Phil. Not Oprah Winfrey’s Dr. Phil, but Dr. Phil Hendrix of consultancy IMMR (Institute for Mobile Markets Research, http://www.immr.org/1/). Hendrix produces reports for the tech-investment community, including GigaOm, creating a chart that divides all LBS into those that focus on Disclose and Share (the Foursquares and Gowallas, which are very social), Discover and Learn (more retail and review-oriented services, like shopkick and Yelp), and Detect and Connect (those more about technology pushing information, like RFID) (see chart 9). Expect this chart to be updated on near-daily basis, as more players enter the space and as more business models evolve. FOURSQUARE: A DATA AND ANALYTICS COMPANY? While Foursquare founder Dennis Crowley apes
Facebook’s “Let the users tell us where this is going” atti- Source: Dr. Phil Hendrix, Location: The Epicenter of Mobile Innovation, February 2010 tude, others in his company are more forthcoming about its business model. Tristan Walker, VP-business develop- ment at Foursquare, cites a recent pilot with Catalina Ventures as indicative of where the company is heading. Foursquare did a test companies to have a go with it. Joost van Dreunen, who runs the with Vons supermarkets in which it connected check-in data from consultancy SuperData Research, sees great promise for retailers in Foursquare with data from Catalina’s shopper-loyalty cards. Those understanding both consumer patterns in their own stores and who participated got loyalty accounts with Foursquare and earned those of competitors. For example, he conducted an analysis of rewards from check-ins. This kind of program is entirely scalable, check-in data at two rival stores in the Union Square area of especially since Catalina has data on 55 million households Manhattan and added hyperlocal (read: mom-and-pop) store data through its management of loyalty programs for a range of gro- as well (see chart 10). Van Dreunen’s hope is that this kind of data cery chains. takes Paco Underhill and his “why we buy what we buy” brand of As Walker said, “The loyalty card tells you what someone has research to a whole new level. Of course, the data is based on a rel- purchased, but check-in data adds a whole layer of behaviors that atively small subset of consumers, but they are obviously active, may not be reflected in recent purchases.” As an example, he cited relatively affluent ones who do something as “hand-raising” as how check-ins at gyms add valuable lifestyle information about a check in to a venue. consumer which complements purchase data and ultimately aids Analytics aside, Foursquare is still a loyalty-marketing play. in target offers. Used in this way, Foursquare may be the next Tristan Walker sees Foursquare as a company that is redefining behavioral-targeting play. To Walker, the Catalina program prom- loyalty. In terms of the small and medium-sized business market, ises to turn “location into context, so that we can offer up contex- Foursquare creates a remember-your-name, “Cheers” type of loy- tually relevant data.” alty.“We’re giving the chef the tools to shake the guy’s hand” who Foursquare has yet another potential use for data: It is being just became mayor of his restaurant, he said. Within these types of generous with its information and enabling independent analytics businesses, “the reward is a rewarding experience when the mer-
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CHART 10
IS TWO BUCK CHUCK DRIVING TRADER JOE’S WEEKEND SALES?
SuperData Research uses Foursquare check-in data to develop competitive store analysis
■ HYPER-LOCAL MARKET AREA ■ WHOLEFOODS ON UNION SQUARE ■ TRADER JOE’S ON 142 EAST 14 STREET 40 as overall traffic in the and is area peaks on Saturdays followed by WHOLE FOODS strong excels on Sundays for Tuesdays, when Trader Joe’s 30 overall traffic is slow but falls behind during the weekend 20
10
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Source: SuperData Research
chant remembers my name,” Walker credited with a 30% sales bump. Walker sees these kinds of cam- added. paigns as emblematic of the “unique, fun and playful” persona that In the context of the check-in (which separates Foursquare from its competitors. is so closely identified with Foursquare), the coolness factor seems to be impor- FACEBOOK PLACES: WITH 500 MILLION USERS WHO COULD TURN ON LOCATION tant. People want to be the mayor of Pies CATCH A CHOO SHARING, WHAT’S NOT TO LIKE? & Thighs, a retro-cool restaurant in Jimmy Choo introduced a Despite all those nasty things that the big-screen version of Mark Brooklyn—but do they want to be mayor sneaker line in London Zuckerberg said about advertising in “The Social Network,” the of Applebee’s in Ames, Iowa? Walker dis- with Foursquare real world Facebook is quite happy to talk about growth plans in misses the question: “They are becoming that area. Brandon McCormick, Facebook manager-global commu- the mayor of Applebee’s, as our data shows.” nications, monetization, is part of the crew of former Google execs With the karma of so much good press, Foursquare also has the who switched to social media. Facebook is the antidote to the prob- ability to execute fun ideas. It worked with Britain’s “Sex and the lem that impacts all of LBS: scale. It has 200 million global mobile City”-synonymous cobbler Jimmy Choo to get the word out that the users (Facebook does not break out U.S. mobile users), and as of guy who put the “s” in stiletto was going lower-case “s” with a new August 2010, it had enabled its users to very simply share their line of sneakers.When the line was introduced in London, Foursquare location with their friends. Why the secrecy with the usage num- users were invited to get to a certain place in time to “catch a Choo.” bers? “People are still getting used to it,” said McCormick. Is For three weeks, women ran around town trying to catch a glimpse Facebook the 200-pound gorilla that kills innovative services like of the new sneakers. The promotion engaged 4,000 people and was Foursquare? “There’s room for both as usage of check-in services
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continues to grow,” he said. “We’re not bells and whistles or about the company analysts had no qualms about? Groupon’s “feet on the mayor stuff. Facebook Places is simply about telling friends where street” number: 1,500 salespeople, all having relationships with you are and creating a record of places where you have been, which hyperlocal merchants. By comparison, Yellow Pages boasts 5,000 is a useful reference.” salespeople. To get local merchants involved in any of these LBS So the question for Facebook always goes back to: Where’s the services, one often needs actual people, not computers. It should be money? In October, it launched Facebook Deals. McCormick calls it noted that Google is aware of the limitations of its local business. a “natural extension, people check-in places, and by updating their Following the Groupon blow-off, it hired 200 people to work the status, they create opportunities for small and large local business- phones. As The Wall Street Journal reported: es to create connections.” As McCormick reminds us, discussion of AdWords never fully took off with local businesses, in part products is very much a part of the social networking experience. because it includes features viewed as too complex or time-con- “A good chunk of status updates that existed before Places were suming for average business owners to use, according to former updates that noted ‘I’m at Best Buy,’ etc.” Google employees. Since 20% of searches done on Google are for local information, “a strong web presence can help neighborhood businesses answer those searches and bring in more customers,” said Marissa Mayer, Google’s VP-geographic and local services, in a prepared statement. Google’s new local ad offerings “are simple and they work, so we’ve been investing in marketing and sales to support them.”
Google reps declined to comment on its plans for mobile local and LBS, including its Latitude service, for this report. YP.COM AND YP MOBILE APP: THE YELLOW PAGES ON STEROIDS (OR AT LEAST CLICK-TO-CALL) GOWALLA: IT’S ALL ABOUT DISCOVERY When I contacted ATTi about its place in the LBS ecosystem, I had It is interesting that Gowalla teamed up with Disney, as the com- forgotten entirely about the first and, perhaps, most powerful loca- pany’s employees speak of the service with the same kind of wide- tion-based service in the U.S.: the Yellow Pages. Indeed, I had missed eyed wonder with which Walt built Cinderella’s castle. Like the rebranding of the company entirely, as it only happened in the Foursquare, Gowalla uses game dynamics to engage people. fourth quarter of last year. According to Andy Ellwood, director-business development, the “YP.com is one of the top apps downloaded and can link through service was founded on the idea: “What if you used the mobile to location,” said Maria Kermath, director-business development at phone as a passport? You could share every aspect of your life and ATTi.The connection of AT&T gives it enormous built-in scale: the capture and share memories.” Ellwood speaks of Gowalla as some- YP search app is either pre-activated or downloaded onto 40 million thing existing to create experiences around the places people go. It handsets. It also powers local-business search for AOL and Yahoo, wants the service to be a behavior-changing experience and takes giving YP.com a total reach of more than 68 million uniques, cer- the metaphor of passports seriously. “Only 28% of the people in tainly a sizeable potential mobile audience for the company. the U.S. own a passport,” said Ellwood.“We give them tools to dis- What else does the YP app have going for it? Try a real differen- cover what is close by and share it with their network of friends.” tiation from Google that the market, unfortunately, too often How large is its user base? A bit larger than Liechtenstein, it undervalues. Google only scrapes data on local businesses that have boasts 750,000 active users, with a 60/40 U.S./international split. a web presence. Think of the enormous range of restaurants, drug Like Foursquare, it also launched at SWSX in March 2009 and stores, dry cleaners and mom-and-pops that have never really need- since then has worked with nearly 30 marketers to create custom ed a web presence. (Though I love Google as a retail tool, I now brand experiences. It created a program for Disney theme parks understand my frustration with it. Use it in a major metro area to exclusively for VIP passholders (Disney’s most loyal customers, or find a restaurant and it defaults to the location with the most linked those who visit Mickey and friends 10 or more times per year). to online presence. Real-life scenario: I needed cheap, fast sushi for Disney awarded trips, challenges and pins (virtual ones) these kids in the vicinity of Carnegie Hall. Google directed me to Masa— hyper-loyal customers would jump at. Gowalla also created a pro- which runs $300 per person!—or Momofuku, where I would have gram for National Geographic around Museum Mile in New to wait for more than an hour. Google also does not work that well York City. Participants who checked in at various locations could in more rural areas, where fewer local merchants have a web pres- redeem badges for items (real ones) like a blood-orange gelato tied ence.) to the promotion. Now that you’re determined to make better use of the YP app already on your phone, there are some other aspects of the Yellow SCVGR: THE HUNT IS ON Pages connection that gives AT&T a leg up on LBS in respect to Like Foursquare, SCVGR demands much of its users, but also has local retail: actual bodies to sell it. the potential for a big payoff. It’s a promotional add-on that makes When Groupon was made the eye-popping offer of $6 billion by perfect sense for entertainment companies. When the videogame Google, many pundits scratched their heads. But the one aspect of “Call of Duty: Black Ops” was launched in November 2010,
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LOOPT AND VIRGIN AMERICA: THE TACO TRUCK ACTIVATION Virgin America-branded taco trucks gave out 2-for-1 flight vouchers to Loopt users who checked in
EMAIL PROMO CODE
SCVGR activated within 6,000 GameStop loca- Loopt worked with Virgin America to create a promotional stunt tions and had 60,000 challenges completed. around the rollout of the airline’s Los Angeles- and San Francisco- Gamers who visited participating retailers could to-Cabo run. The promotion ran for a total of four hours (you scan the product to unlock rewards such as dis- snooze, you lose), with consumers showing up at a Virgin-brand- counts, unique digital assets and T-shirts. ed taco truck receiving a 2-for-1 flight voucher. (All proceeds from SCVGR is not a check-in service per se. “We’re the taco truck went to a chihuahua rescue charity.) One truck not about ‘I’m here,’ but about playing with a attracted 1,300 customers, while the campaign helped Virgin fill brand and creating unique ways to play,” said Chris Mahl, senior seven planes. The promotion had a 92% redemption rate and con- VP-brand alchemist. The company creates “scripted engagements” tributed to the fifth-largest sales day in the U.S. for the airline. Said and has developed these virtual scavenger hunts for museums VP-Marketing Alice Lankester: “Anyone can deliver a coupon or including the Metropolitan Museum of Art and the Smithsonian an offer for 10% and only one person can be mayor. But can you that also tie in with local businesses. Coca-Cola enlisted the compa- get them off their seat? That’s what we specialize in.” ny for a virtual scavenger hunt in Simon Malls around the U.S., How to top taco trucks and chihuahuas? Loopt is working with where consumers could unlock secrets of the Coke formula by the Fox television network on a promotion for the new animated interacting via phone with signage. show “Bob’s Burgers” that ties in with 64 Fatburger outlets. Loopt users who show up there can unlock a special trailer for the new LOOPT: HOW TO GET PEOPLE TO DO LOOPY THINGS? LBS series available only to them. Loopt has been around the LBS space for ages, relatively speaking. It was founded in 2006 by a kid after he dropped out of Stanford, POYNT and debuted on the iPhone the year after. Creator Sam Altman is Poynt is a location-based app notable for the fact it was actually now 24, and Loopt is the second-largest player in the space after launched on the BlackBerry in 2008 and is currently the most pop- Foursquare with four million users. ular recommendation and search engine on that device. (It is The focus of the service from the beginning was friend finding. important to note that while Apple has the sex appeal, the A key differentiator is that when someone in your friend circle BlackBerry still boasts the largest share of the smartphone market comes within your range (through seamless integration with in the U.S., while its users are just a bit behind in the app depart- Facebook), it sends you a PNS, or push notification. These alerts ment.) According to Margaret Glover-Campbell, VP-marketing pop up on the phone screen in a dialogue box and, unlike text mes- and public relations, the device is now platform-agnostic and Poynt sages, are free to the user. The service is available on the three has more than 4.6 million app downloads, 80% of them in the U.S. major smartphone platforms. The median age of its users is 27, It has built its content through partners such as Yellow Pages for with a fairly even male/female split. Like most of these services, it search and Open Table and MovieTickets.com for transactions. skews urban, with an especially strong presence in New York, “We’re location-based mobile from the perspective of finding Chicago, Los Angeles and San Francisco. things—what I want to eat, a dry cleaner, a florist—and then help Of all of the services approached for this report, Loopt is the me transact,” said Glover-Campbell. most interested in custom, buzz-generating marketing programs. Does this have any relevance for a national marketer? Glover- National media pick-up is a distinct part of what it offers national Campbell cited a campaign with Days Inn: “If I’m in the U.S. look- clients like The Gap, Burger King, Paul Franck and Virgin America. ing for hotel, why shouldn’t Days Inn offer up a nearby location
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BOOYAH MYTOWN-PANTENE USER FLOW: PRODUCT CHECK IN
Check in to Walgreens, a Pantene product check-in Pantene product check-in Product check-in unlocked Product check-in scanner, Pantene-targeted location item received item description screen page, rewards user with a scanning a Pantene new Pantene item shampoo bottle
and incent with a discount?” transmit a coupon, or enter the user into a sweepstakes. “It’s a holy grail for marketers and brands to have their BOOYAH: MYTOWN target audience actually hold their products in their Imagine if the world around you were a hands,” said Keith Lee, CEO of Booyah. “It’s as close as Monopoly board come to life. You could you will get before point of sale, not to mention that a own the Starbucks on the corner and charge consumer’s product check-in history is invaluable data.” rent to those single-latte-swilling, use-this- The Duracell Powermat, which can charge any as-my-portable-office outlet hogs. This is mobile device, employed a scavenger hunt- the conceit of MyTown, one of the game- style program in which users were invited to related products introduced by Booyah, a join when they checked into electronics company founded in Silicon Valley by exec- stores. They could unlock a virtual item that utives from the online-gaming world. then drove them to enter a sweepstakes. Booyah has done a good job of getting POYNT + DAYS INN Insight Express found that the program lifted national marketers on board and expects by Search + location purchase intent by 38%. (In this type of pro- the end of 2010 to move into six-figure deals. + incentive = motion, lift over the control group of 5% is (It boasts clients such as H&M, Disney, commerce considered good.) This was likely a combina- MTV, Wrigley’s and Procter & Gamble.) So tion of the right product (with a broad base of how do marketers get involved? They pres- interest), the right time and the right place; in ent virtual goods to reward participants and create contests short, mobile marketing nirvana. that encourage users to seek out specific products, pick them up and use a 2-D barcode scanner to unlock a prize. SHOPKICK: KICKBUCKS, THE GREEN STAMPS OF OUR ERA? Sound like a lot of work? Not to their core demo of iPhone and Shopkick is the LBS service with perhaps the broadest potential iTouch users with a median age of 18-24. (MyTown will be avail- appeal, and the one most consumers may have inadvertently able on other platforms beginning later this year.) It collects demos encountered thanks to its rapid deployment at the end of last year. on its users and claims a 55/45 male/female split. Movie studios The service was in operation in select Macy’s, Best Buy, Crate & want to reach the young audience and are actively targeting peo- Barrel, Sports Authority and Target locations this past holiday ple who check in at a variety of places like bars and restaurants season.When consumers open this app, an ultra-high sound ema- because they see usage of an LBS service such as this as a key sig- nating from a simple transmitter positioned wherever the retailer nifier of an active, engaged, influential audience that actually goes places it triggers a transmission to the phone for an accumulation to movies. of a kickbuck, the mobile equivalent of S&H Green Stamps— Package goods brands such as Procter & Gamble’s Pantene have except that the consumer doesn’t have to buy anything first. been developing programs that encourage users to unlock virtual Cyriac Roeding, co-founder of Shopkick and a former KPCB goods when they enter participating Walgreens. It calls this a analyst in the LBS space, said: “It’s the first LBS program that “product check-in,” and while it is not a sale, doing something as rewards the consumer for walking into the store—there is no need purposeful as holding the product and scanning the barcode indi- for a check-in.” But yes, the consumer does have to have the app cates a high level of physical engagement with a product.The mar- running on his or her phone for the “dog whistle” technology to keter can use this to trigger more information on the product, work. Roeding cites the challenge of driving retail activity in cur-
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rent economic times. “If foot traffic is so important, why don’t we SHOPKICK APP Consumers earn points just by walking into a store reward people for visiting?” he said.“We’ve created a ‘walk-in,’ not a ‘check-in.’” Points are accumulated in all the participating retailers and can be spent anywhere the consumer chooses. Isn’t the hardware installation an issue? “It costs less than $100,” Roeding said. “There is a company that installs them, and the retailer can choose where to put them so they can trigger different offers in different parts of the store. It doesn’t depend on the GPS either.” In addition to rewards for merely entering the store, kickbucks are also given for scanning specific product barcodes. Both P&G and Kraft are testing this element of the program. All of this shop- ping and scanning has got to be throwing off a lot of data on retail behavior, right? “We’re a preference engine and a behavioral-tar- geting engine that actually enhances the retailer experience for the consumer,” Roeding said. Roeder believes his company’s secret sauce is what none of the other LBS plays have: women.“We’re the only LBS app that skews female—we’re 55% women,” he said. Shopkick conducted a sur- might either suggest a point of interest to those who favor that vey of 15,000 users and found that 31% are in the coveted 18-34 retailer (ski resorts for The North Face, for example) or an oppor- group, while an impressive 49% are 25-39. Shopkick is reaching tunity to eat. Sonic geo-fenced the Atlanta Falcons stadium to those shoppers filling their carts to meet the needs of larger house- reach consumers with offers for post-game munchies. holds with kids. The broadest implementation of the services is now underway How many kickbucks were triggered over the recent holiday in the U.K. with O2, one of the leading carriers there, which is season? The company is preparing a full report but noted triggering location-based messages to an opt-in list of nearly one American Eagle expanded Shopkick from 50 to 200 stores, quadru- million of its customers. It developed a preference center so peo- pling its footprint after only three months of using the program. ple can check off which types of products they are interested in In the retailer’s “12 Days of kickmas” sweepstakes, more than 96% receiving alerts about. Starbucks is triggering alerts with vouchers of Shopkick partner stores had shoppers walk-in for a chance to for its Via instant-coffee product that can be redeemed in either its win more than 30 million kickbucks up for grabs. The sweepstakes own retail locations or national grocery chains like Tesco and boasted millions of entries and more than 12,000 winners. Sainsbury. Shopkick’s data showed that the peak shopping day for its users As of this writing, Placecast is bringing the service broadly to was Dec. 23, when 343,450 entries were registered. market in the U.S. with one of the major carriers in a deal to be announced imminently. One of the advantages of the service is PLACECAST: LIKE E-MAIL MARKETING, ONLY MOBILE-LOCATION-TRIGGERED that it uses carrier triangulation to trigger messages so it’s device- When retailers finally embraced e-mail marketing in the mid- agnostic, meaning it works beyond smartphones. Thus, it solves ‘00s, they discovered that a whole range of techniques from their one of the greatest challenges of LBS: reach. Considering that catalog and promotional efforts applied. They eventually learned nearly all the 233 million mobile phone users in the U.S. have how to take various data points and segment offers according to access to texting, one begins to get a sense of the potential scale of their best customers and ones who weren’t so frequent, and also programs such as this. learned that this was likely not an “acquisition” channel. You couldn’t just buy someone’s list and send them something unre- WHERE: A WHOLE LOT OF LOCATION GOIN’ ON quested. But e-mail marketing became an incredible promotional It’s tough to pigeonhole Where in the LBS space. As a company, it vehicle that forever changed how these retailers did business. In a is clearly hedging its bets as the business evolves. Dan Gilmartin, similar way, retailers in the U.S. and U.K. are catching on to VP-marketing, said it has a consumer app that “helps users dis- Generation Text through SMS marketing and finding that simi- cover new places and connect with existing places that is built on lar rules of promotional marketing apply. hardcore recommendation engine,” much like Yelp. According to On behalf of various retailers, Placecast triggers opt-in text Gilmartin, it has approximately four million users and is adding messages to consumers based on where they are. In late 2009, the around 550,000 per month. It also has a hyperlocal ad network company did pilots with Sonic, American Eagle and REI and which handles about two billion local ad requests each month for found that for those who opted in, location offered a real benefit 175 publishers, including AccuWeather, Pandora, Flixster and of increasing relevance (see chart 11). Placecast works with each Weather.com retailer to develop a messaging and location strategy,and then cre- The final leg of the stool is a small business merchant discount- ates the geo-fences that trigger the alerts. These geo-fences are ing service. It’s a simpler version of Groupon that doesn’t require often erected near store locations, but can also relate to places that consumers to enlist friends to unlock deals. Where bought
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CHART 11
LOCATION CAN IMPROVE RELEVANCE
72% viewed location basis as positive due to increased relevance Q: What do you think about the fact that messages were sent based on location?
Very positive: It made them much 35% more useful/relevant
Positive: I like discounts and they were 37% more likely to be appealing
Somewhat positive: Sometimes made 13% them more useful, sometimes not
Neutral: Didn’t make a difference 9%
Neutral: I didn’t realize messages 5% were based on my location
Negative: It seemed intrusive 2%
Source: Placecast: ShopAlerts Pilot Studies, February 2010; Base: 171
LocalGinger, which it is now integrating into its get from point A to point B but also the relevant portfolio of services. Is there room in this space with places to stop on the way,” Eisnor said. A virtual- giants like Groupon, which just said no to Google’s goods rewards element is built in with branded road recent offer and then accepted an astonishing $950 goodies awarded for taking specific paths. When the million in additional funding? “The daily deal is car is stopped, the app flashes a traffic warning and going to be a standard unit of the future. We’re provides the user with advertiser messages related to building tools for small businesses to drive real-time location. Waze is currently available on iPhone, commerce.” Android and WinMo, with 2.3 million consumers Where is in the “anti-check-in” side of the LBS globally having downloaded the app. business. “We’re building a business, not a product,” said Gilmartin. “We’re not interesting in check-ins WAZE LOCATION MADE EASY, WITH SCALE: WEATHER, MOVIES, but in making the checks come in.” Where to shop along the way RESTAURANTS LBS marketing does not need to be activated through WAZE: TELL ME WHERE TO GO…AND WHAT TO BUY ALONG THE WAY a check-in or a GPS device’s functionality. All kinds of location- Cars are certainly no strangers to location-based information, aware content exists that users can access through both WAP and with the vast number of Garmin GPS systems on the road and APP to deliver pretty specific location. The user accesses these reg- now fully integrated systems like the Ford Sync. Oh, how much ularly to get the location-specific info they need on weather,movies did you love your Garmin back in the day (say, two years ago?). and restaurants. A host of apps as well as mobile web sites meet But that lady with the lush tones was never able to make recom- these needs, and when consumers use them, they can tell you mendations on what places you encountered along your route or where they are. These are also apps that consumers tend to keep offer you incentives to stop. around because they become a regular utility.In addition, they solve Let’s say you threw away your Garmin and went one better the scale issue. Consider how comScore pegs usage of popular loca- than voice-activated Google Maps. Waze is an app that does all tion-aware WAP sites and apps against the “big names” in LBS (see that and, as VP-Partnerships Di-Ann Eisnor says, the next wave chart 12). That may not be as sexy in marketing speak as a check- in LBS. Waze calls its service location-guided marketing, a step in, but it is proven engagement and there are many consumers to beyond location-targeted and location-aware.“We tell you how to be reached this way.
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CHART 12
WHO’S GOT REACH IN LOCATION RELATED MOBILE CONTENT?
Content where consumers enter ZIP codes to get customized information trumps services consumers check into Percent of mobile audiences that accessed in September, 2010 (via apps and WAP) 8.3%
2.2%
1.3% 0.7% 0.6% 0.6% 0.5% 0.5% 0.4% 0.3% 0.2% 0.1%
The Fandango Moviefone YP.com Foursquare Open Urban Zagat Google Yelp Loopt Gowalla Weather Table Spoon Channel
Three-month average ending September 2010. Country: U.S., N=32,044 Source: comScore Mobilens
WHAT’S A GEO-FENCE?
CREATING A VIRTUAL PERIMETER
Delivering tailored messages based on a user’s location.
A geo-fence is defined as a virtual perimeter for a real-world 8 a.m., or mochaccinos when the temperature drops below location that can be dynamically generated, as in a 50 degrees, or slushies on hot afternoons.) Geo- radius around a store or point location. When the fencing can tie into CRM systems and dynamically location-aware device of an LBS user is in a geo- take information about a user or group of users to fence, the device can receive a notification with a further tailor messages to them. nearby offer tailored into the message. Companies This year, Placecast expects to introduce a self- like Where, Location Labs and Placecast offer geo- serve interface that any business can access. All a fence creation as a service. In the case of Placecast, company needs to do is upload a file with locations. geo-fences are created and managed on its server, The system cleans up data (checking for location which means the consumer does not need to accuracy), and enables the business manager to download an app on his phone. create promotions with geo-fences generated Placecast counsels its retail clients to start with automatically. store locations and event sponsorships, and No real limit exists for how many a company can optimize size based on traffic patterns and trading have, and it can also use established location- areas. Geo-fences can be changed to create targeting parameters like PRIZM clusters to different messages at different times of day or related to enhance targeting. The server periodically pings the carrier temporal events such as changes in weather or traffic. (Fast-food network to determine the location of the phone and looks for a restaurants can trigger breakfast menus via location before match against what people have opted into.
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QUARTERLY TREND REPORT Location When You Don’t Have One, or How LBS Can Work for Package Goods
ed kaczmarek, director-innovation and consumer experience CHART 13 at Kraft Foods, has found relevance in location where one might least expect it. In a field where minute shifts in media spend are REACH OF LBS APPS carefully tracked back to sales, how can programs without national scale have impact? “We’re trying to create a delicious Percent of mobile audience that accessed location-based experience—in-home, out-of-home and in-store—as we services in September 2010 through applications engage consumers and try to make their lives easier,” said Kaczmarek. Kraft was early to the branded-app craze, creating The Weather Channel the Kraft iFood assistant in 2008 as “an extra utility to increase lifetime consumer value.” 10.5% The iFood assistant is location-aware and has always enabled Foursquare the GPS functionality of the phone to show consumers where the nearest grocery stores are. How 1.2% can pure LBS work for something Ulocate like package goods—and why should a marketer bother when its 0.5% aim is to sell millions of units of Loopt macaroni and cheese? “Our mantra is always ‘Test and 0.5% learn,’ and we think location-based Gowalla services are an incredible way to drive engagement closer to the 0.2% point of purchase and can be a key Whitepages.com component to drive loyalty,” Kaczmarek said. 0.2% One surprising result of the Superpages app: 20% of users are men. That is KRAFT’S SHOPKICK high compared to other types of 0.1% Promotion lets users scan the food promotions, Kaczmarek cheese for reward points pointed out. (Let’s hear it for the Three-month average ending September 2010. Country: U.S., N=32,044. Source: comScore Mobilens emerging male primary household shopper!) Are virtual soups in the company’s future? Kraft takes a less whimsical, more pragmatic approach. “We heard about sumers to check in and scan products at grocery as well as shopkick from its VCs, Kleiner Perkins, and we wanted to convenience stores. connect before a service like that took off,” Kaczmarek said. “The appeal of something like Shopkick and kickbucks for us Kraft first tested LBS through CauseWorld, which enables is that the points can be collected and redeemed across a variety consumers to check in at retailer outlets and scan goods in of retailers,” said Kaczmarek. “It has greater impact and value.” exchange for points which are then donated to a designated But scanning a product is not buying it. So, what is the value? charity. “It’s a consumer touch point in the literal sense of the phrase,” “We wanted to know whether they would turn on their app he explained. “When people scan the products, they can get and walk into a store to earn value. They did,” said kickbuck points, more information about the product, or a Kaczmarek. Kraft is now using Shopkick and encourages con- recipe. That is a form of deep engagement with the product.”
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BEST PRACTICE
8 QUESTIONS MARKETERS SHOULD ASK BEFORE STARTING AN LBS EFFORT
LBS is exciting. People are actively running around the U.S. checking into places with their phones and saying, “Market to me.” But here are some precautions and considerations both marketers and agencies should take into account before checking in themselves.
Does LBS in general fit the brand’s marketing objectives? measure success in terms of activities like number of check-ins, product scans, or awards of branded virtual goods. Determine Right now, most of LBS is in a highly developmental stage. what each should mean to the brand. (One LBS exec offered an Consumers are getting used to the services and their behavior example of a healthcare company rewarding people with now may very well change when the services move beyond virtual broccoli. How do you determine the relationship of a early adopters. Marketers will certainly learn from test piece of code made to look like the first President Bush’s least- programs, but these programs as of yet are not likely to impact favorite vegetable to brand loyalty or sales?) How about brand- a broad range of consumers. Set realistic brand objectives in impact studies for brand-related games? SMS programs can be regard to LBS tactics. Good PR and educating oneself may be tied into CRM programs, messaging strategies optimized on the most achievable objectives at the moment. the fly, etc. I have seen examples from developing countries with complete SAS back-ends. Do not use “It’s mobile, it’s new” Does the LBS service you choose fit your target as an excuse for not having a measurement strategy. audience? Some LBS skew very distinctly to male early adopters. If you If you’re using LBS for more traditional promotions are selling skin cream, does LBS really make sense right now? such as coupons,are you rewarding your most Meanwhile, if you’re eager to reach tech-savvy, social valuable customers or merely incenting budget networking junkies, LBS check-in features can work brilliantly. hounds? Are those who act on these promotions coming back? How does location relate to and enhance your brand? Groupon has been in the news of late for more than its funding. Is your product one that relates to specific places? Do people Retailers grouse that once given a deep discount, consumers like to use it when doing activities that relate to places? There always expect it—and if they don’t, they won’t come back. are fascinating ways in which place can trigger response. Think Reports of loyal customers feeling unappreciated have also about what these places may be and how you are going to surfaced—say, when they can’t get their regular mani-pedis activate based on them. because their favorite salon is packed with Groupon devotees.
Does it scale? Do you fully understand the privacy implications? Many of these services are limited to the iPhone and iTouch, LBS can be one-to-one marketing—but only for those who say which combined reach only about 8% of the population. Factor “yes.” Are you working with LBS partners who are fully privacy down the number of people who want LBS apps and you can compliant? see they are hardly likely to make the cash register ring. If scale is your goal, consider simpler things like using location to target Are your prepared to market what you’re doing with specific audiences, or for a location-triggered SMS program LBS? that can reach all your interested customers on any type of The reach of LBS services at this point is very low. Your brand device. Location does not have to be activated via an app or a can be a part of building these valuable activities. There are check-in. There is a range of location-aware mobile sites that many vehicles that can be used for activation, so why not make make sense, including those focused on movies, weather and LBS part of your larger campaign strategy? Offer activation via restaurants. in-store signage, out-of-home, print—even tag it in a TV campaign. Remember when the advertiser’s URL started to What is your measurement strategy? become a familiar element of television and print creative? If PR and company education are the goals, assess impact Why not invite customers to engage with your LBS partners accordingly. For some of these services, you may be asked to through your national marketing?
| February 28, 2011 | 23 QUARTERLY TREND REPORT Conclusion: The Future of LBS
the emergence of LBS as a marketing platform is less than two- scanning of a bar code. Xtify enables retail apps to push notifications years-old. And yet, countless amounts of real and virtual ink have to users of Android, iPhone and BlackBerry devices about promo- been devoted to the topic. Toward the end of 2010, a bit of a back- tions or information relevant to a location without the app being lash could be detected, and not just among the bloggerati. Some of open. Those notifications show up on the screen of the phone. it certainly had to do with journalists, who embraced the services Obviously, minding frequency and relevancy and enabling con- as eagerly as they had embraced Twitter, suffering from that sumers to easily opt out are key to these types of LBS enhancements. dreaded ailment known as “check-in fatigue.” Ad Age’s own All of the services discussed in this white paper have one common Kunur Patel addressed this in a column published Nov. 29: element that trumps check-ins: data. For Ian Schafer, CEO of DeepFocus, a mobile agency owned by Engine USA, the power of As a self-admitted check-in cheerleader up until this point, I location-based services comes from “the amount of useful data that have to say, I’ve hit the wall. I’ve had enough. My skepticism did it yields … As we move more toward loyalty programs, we will find not go untested. I vowed to check in to everything I could this week. the value from the information consumers give us about location.” And I do mean everything. I started off strong: I remembered to Schafer sees LBS as being in a very formative period. “We’re in check in at all stops on my way to date night: the office before I left, the Friendster stage” he said. “We will find that location is not a cat- Grand Central, the bar before dinner, the restaurant … Things got egory of apps but a data point.” a little trickier later in the week … I usually forgot ... I tried to check In order for LBS to progress, Schafer said,“We have to realize that in to my Stieg Larsson novel during the few stops my train is above with location, retail is the low-hanging fruit. The market is not really ground in the morning, but it was hard enough to juggle a book, ready for it, but where you stand dictates where you use it and often coffee and purse on the rush-hour subway. Passing a grocery store, what you do. The challenge is the inventory model of mobile media I wanted to download Checkpoints, the check-in app for that locale, from an advertising perspective doesn’t really match up to that.” but couldn’t because I haven’t upgraded my iPhone to iOS 4 yet. Schafer does see a future for services like Foursquare, “but in order for that to work, they have to maintain the coolness factor and Even Foursquare’s Dennis Crowley admits to sometimes suffer- prevent their users from just becoming deal hunters.” ing check-in burnout: “I was at the Orlando airport at 11:30 at night We are in a period of “adjacent innovation,” he said, citing a recently. I’m thinking, ‘I’m not going to get the mayorship—there’s much-discussed business tome “Where Great Ideas Come From.” nobody nearby to alert that I’m here.’ So why check in?” said Each company reported on here is an “incremental innovation on Crowley, as reported by Search Engine Land’s Danny Sullivan last the other, but we need the really big one to hit that teaches new November. Afterward, Crowley alluded, somewhat elliptically, to behaviors,” said Schafer. new business developments that would usher in the next generation Someone else who believes analytics are the true power of loca- of the Foursquare business model. Then, on Dec. 10, in one of the tion is Dr. Thaddeus Fulford-Jones of Locately, who has developed a earliest check-in-focused LBS plays, BrightKite announced it was panel of several thousand opt-in users who have agreed to share abandoning the check-in in favor of group texting. their location via the GPS function on their phones in exchange for Check-ins are a whole lot of work, and a movement is afoot to rewards and gift cards. The data is kept anonymous, and then used develop concepts that equate to “passive check-ins.” In July, for retail analytics. ReadWriteWeb reported: “Mark Cuban has just invested in a video “There is a huge need for information about in-store behavior,” company that can identify how many people are in a specific loca- said Fulford-Jones. “CVS has no idea what goes on at Walgreens.” tion at a particular time. While currently the technology is used for He sees his service as a complement to Nielsen Homescan, which analyzing ‘traffic patterns’ and ‘security,’ writes Cuban on a blog post reports what consumers buy. “We help retailers understand where announcing the deal, the next step is adding facial-recognition soft- they go, which store they choose, how far they are willing to go, and ware for the purpose of check-ins using location-based software.” what happens both on their way to work and on their way back Currently,Shopkick, with its “dog whistle” trigger of a cell-phone home,” said Fulford-Jones. The company also applied the data to app, and Placecast, which only asks consumers to text their desire to ESPN, which wanted to understand a month in the life of a Super opt in, both offer options for marketers looking to avoid check ins or Bowl fan and a college football fan. The retail data helped it to
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understand the behavior of the ESPN sports fan and provided THE GOOGLE PATENT ON insight for advertisers. LOCATION FOR Despite the wealth of examples offered by those interviewed for TARGETING ADS ON MOBILE this article, the marketing world thus far has not been nearly as DEVICES excited about LBS as venture capitalists and the denizens of Silicon Valley. Usage rates remain small while funding is high. (See chart 5 Can it be applied to for a calculation of VC money raised vs. likely consumer usage rates.) ownership of virtual Mark Evans, a Silicon Valley consultant who started the network- places? ing group Geo-Loco and programmed the first-ever LBS content track for Ad Tech New York last November, acknowledges the dis- connect between Madison Avenue and Sand Hill Road. “New York was a huge eye opener,” Evans said, referring to the less-than-stellar attendance at those sessions. “I didn’t realize how much we were drinking the Kool-Aid, thinking we were at the tipping point of hav- ing the ingredients to change local commerce. But we’re not.” So, what stage are we in? “We’re exploring the very nature of location and context with the convergence of the social and mobile web put together with commerce,” Evans explained. “Advertising and marketing are so focused on influencing people down to the point of purchase,” he continued. “The biggest thing to the relevancy of ads with the help of a user’s location.” The patent change in commerce in decades is peers connecting with each other itself states that it will enable “targeting potential customers based and sharing information as they purchase.” As that behavior on their location.” becomes more common, a connection with marketers will emerge. On Dec. 21,Where was granted a wide-ranging patent for the cre- For Hunter Sebresos, a young entrepreneur with both an agency ation of geo-fences by individuals and roaming geo-fences.The patent and tech background who is founding partner and chief creative was five years in the making. What exactly does it cover? According visionary for Dyvergent, a brand and media innovation consultancy, to Where VP-Marketing Dan Gilmartin, “We look at this award “Location is not based on demos or surveys but around individuals.” more of a justification of the importance of what we are doing and He believes it is the factor that will get us to one-to-one marketing. plan to use the patent as a shield against would be patent aggressors.” “You have to remember that these devices carry identities, then All this seems to imply that there may be a land grab for virtual allow other devices to connect. Location is going to take us beyond spaces. But can you really own a place that isn’t, well, an actual, phys- audiences to individuals.” Location is not just about marketers push- ical place? Alistair Goodman, CEO of Placecast, sees the space as ing messages to devices, but about those devices being a way for peo- morphing beyond targeted advertising into a world where compa- ple to influence the world around them. “The super-cheap intelli- nies can own the rights to virtual locations, exemplified by some- gence that an iPhone has can be applied not just to what is on that thing like a geo-fence. “We could live in a world where companies phone, but also applied to the location around you,” he said. “The are bidding on the rights to control virtual spaces,” he said. space you inhabit becomes aware of your existence.” Personally, I’ve always been one of those bold Monopoly players As an example, Sebresos cited the Xbox Kinect, which lets users who capitalized on the high rents of Boardwalk and Park Place. I’ll interact with their gaming devices independent of a joystick or wand. geo-fence Times Square, build an LBS app that enables users to “NASA was given a Kinect to develop apps for it to show off how a interact (no check-in required) with the brilliant LED signage and get robot in a space station can be controlled,” he pointed out. How coupons, badges and mayorships. Is that worth $25 million in VC might that impact the worlds of marketing and commerce? If you funding? Perhaps—especially if I figure out a way to constantly can be a mirror of what’s in space, why can’t you do the same thing amaze, excite, and incent the millions of people that pass through with a shop window? At the moment, Sebresos sees these kinds of every month. applications mainly in interactive museum exhibits. In his world, people, through their mobile devices, will be interacting with real as well as virtual goods, and the places around them. ➜ Kathryn Koegel is a media and marketing consultant who has worked in online, As formative and malleable as location marketing is, huge com- print, TV and mobile. She wrote the Ad Age Insights white paper “What You panies are betting that at some point it will become reality. The Los Need to Know About Mobile Marketing” (published in May 2010) as well as “Building Brands Online” (published October 2010). She is currently working on Angeles Times reported on March 2, 2010, that Google had received an update of the Mobile Marketing paper, as well as reports on mobile a patent around location and advertising. The challenge at the couponing, mobile commerce and mobile metrics. Koegel was the director- moment is that no one really knows what the true implications of research and industry development at DoubleClick and created the company’s that patent are.“The iPhone and Google Android-based devices have first industry-trend reports. In her consultancy, Primary Impact, she works with built-in GPS technology, making them location aware,” the Times media and interactive-marketing companies to turn their data into industry reported.“With the help of its patent, Google could capitalize on that insights. Her primary research work has been accepted and published by the technology and offer a mobile-advertising solution that improves ARF and ESOMAR. She can be reached at [email protected].
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QUARTERLY TREND REPORT A (Highly Subjective) Directory of LBS Companies
SOCIAL MEETS LOCATION (WITH SOME GAME CHECK-IN ENHANCEMENTS/ iAds and other rich media: Ad applications MECHANICS THROWN IN) PASSIVE CHECK-IN such as those offered by Crisp, Greystripe and Booyah: www.mytown.com Future Checkin: Pointroll that can initiate location through Developer of mytown.com. Gaming-focused http://itunes.apple.com/us/app/future- GPS on smartphones. Rich-media ads on location sharing that includes people and checkin/id384366232?mt=8 phones make it very appealing to interact product check-ins. Paid app that uses the backgrounding features with the ad but more importantly to get more of iOS 4 on the iPhone 4 and 3GS to constantly information including maps related to the Facebook Places: www.facebook.com/places check location and automatically check users product. Launched August 2010, add-on to Facebook into Foursquare locations they frequent. that enables location sharing more utilitarian JiWire: www.jiwire.com than Foursquare. Deal elements being added Last Night’s Check-Ins: Ad network that reaches people in public on gradually. www.lastnightscheckins.com places using wi-fi, tech-savvy, travel-intensive Service that keeps a Foursquare diary. Every group that are the delight of certain Foursquare: www.foursquare.com day, it e-mails the user a list of his or her marketers. This network of public-place Wi-Fi Check me in, find my friends, give me a deal, check-ins the previous night. Users can fill in access is both a consumer-facing app that make me mayor. information about each experience. finds the free Wi-Fi and an ad network that serves ads to those people. It earns more than Google Latitude: Xtify: www.xtify.com 40 million uniques per month, users reached www.google.com/accounts/ServiceLogin?service=friendvi Push notifications for smartphones that app through its public-place Wi-Fi network. ew&passive=86400&continue=http://www.google.com/lati developers can set up and trigger based on Quarterly reports on mobile and public places tude&followup=http://www.google.com/latitude location. Added benefit of the app not as they relate to retail: www.jiwire.com/insights. Simple location sharing. needing to be on in order for the notification to be received. Location Aware Sites: Popular app and WAP Gowalla: www.gowalla.com sites enabling users entering their location to More focused on discovering aspects of LOCATION THROUGH MOBILE get personalized information: places and sharing info with friends. ADVERTISING (SCALE!) Moviefone.com, Fandango, Open Table, One way for marketers to dip their toe in the Weather.com. Loopt: www.loopt.com location waters is to use their mobile ad Share locations and get involved with creative campaigns to either drive to a specific promotions. location or offer retail locators. Here are a few LOCATION AND GPS ENHANCEMENTS simple ways to achieve that: Navteq: www.navteq.com PlacePop: www.placepop.com Maps and navigation services to GPS Virtual loyalty card program; check into Ad network capabilities: The mobile ad providers; also offers advertising on GPS places to earn rewards. networks (AdMob, Millennial, iAd, Jumptap, devices. etc.) hold the majority of WAP and app ad SCVGR: http://www.scvngr.com inventory at this point. They make ads work Waze: www.waze.com More game-focused; execute challenges and on all platforms and aggregate inventory for Real-time maps and traffic information based interact with various retail locations. content producers. Target by location or on crowdsourcing. simply make it easier for users to get location Whrrl: www.whrrl.com information through the ads. Check in, find “societies” of people with like interests, create record of places visited.
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RETAIL-FOCUSED WeRewards: www.werewards.com SEARCH/LOCAL- RETAIL-FOCUSED CellFire: www.cellfire.com The consumer takes a picture of himself at a Aloqa: www.aloqa.com Electronic coupon syndication platform for location with his phone’s camera to complete Consumer app with location-based retail app developers, plus a digital-coupon his check-in and claim his reward. The information pushed to users; also operates a program that ties into major grocer loyalty submission is geo-tagged and includes time local ad network. programs. data so the company can verify the locations. ATTi & YP.com: www.yp.com CheckPoints: www.checkpoints.com The Yellow Pages goes mobile. iPhone app that rewards consumers for RETAIL ANALYTICS entering stores and scanning UPC barcodes Foursquare: www.foursquare.com Geodelic: www.geodelic.com on assorted items. Working on pilots with companies like Local search and discovery that helps users Catalina to connect their data with shopper find what’s around them from a specific Groupon: www.groupon.com data: http://www.fastcompany.com/1703807/exclusive- venue. The app to the popular crowdsourced foursquare-partners-with-pepsi-unveils-linked-loyalty- couponing program has a mapping feature rewards-accounts-facebook-pl Google: www.google.com that shows deals at nearby stores. A whole lot of location going on. Google Localitics: www.localitics.com AdSense is platform for buying search ads; Nearby Now: wwww.nearbynow.com Real-time app analytics for app developers. Google Places (formerly the Google Local Acquired by JiWire in November 2010, allows Business Center) features business pages for brands to show products within an app or an Locately: www.locately.com local retailers; Google Places with Hotpot ad and confirm availability of the product in Information on consumer behavior from GPS offers crowdsourced local recommendations the store. Users can also reserve the product data. through an app; GoogleMaps app shows retail for pickup. locations. Superdata Research: www.superdataresearch.com Placecast: www.placecast.net Measurement focused on digital goods; Poynt: www.poynt.com Location-based SMS technology for retailers works with Foursquare on retail analytics Consumer retail location-finding app with to push permission-based SMS. using its data. initial focus on BlackBerry users.
PlacePop: www.placepop.com Where.com: www.where.com App that enables the collection of virtual REVIEWS AND RECOMMENDATIONS Consumer retail location-finding app, loyalty card points. Facebook TripAdvisor: hyperlocal ad network, mobile app loyalty www.facebook.com/tripadvisor program. PointInside: www.pointinside.com Launched in December 2010, add-on service App that maps the inside of locations such as to Facebook. When consumers visit malls and airports. TripAdvisor while logged onto Facebook, shows friends’ reviews, maps, places friends Shopkick: www.shopkick.com have visited, and lists of most popular Multistore loyalty program that operates destinations. through an app; users get points (kickbucks) for entering stores and for scanning products. UrbanSpoon: www.urbanspoon.com Popular food-review app that enables users Shopsavvy: www.shopsavvy.com to find out what the guy at the restaurant Enables the user to scan a barcode on next-door ate and what it looked like. merchandise with his or her phone, and search for better deal nearby; uses Yelp: www.yelp.com crowdsourcing to enrich its data on pricing. Consumer-review site best known for restaurant and hotel recommendations. Its Visa Mobile: www.visamobile.com app enables location sharing. Launched in December 2010, loyalty-program app with LBS that includes mapping and directions to nearby retailers for redemption of merchant offers.
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For more research , white papers and webinars: adage.com/insights/