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Location-based services: The hottest segment in social media

By Eric Miltsch

Location-based services check-ins mapped
Welcome to the world of location-based services. These applications are changing the way people experience everyday activities like shopping, eating, traveling, watching a movie or taking a picture.

Location-based service strategies include any application that has the ability to share an individual’s physical location, in real-time, with his or her online social networks. Users are rewarded with badges, stickers or points -- satisfying the need for self-accomplishment. Users can also be rewarded for their activity by companies and brands leveraging these services as another element of their marketing strategy. Among the most popular location-based services are foursquare, Gowalla and Yelp Check-ins. Add Facebook Places to the location buffet as well.

Why has this become a significant factor for brands to consider? A perfect storm of circumstances is creating a unique set of opportunities:
  • Technological and GPS capabilities of our mobile handsets is advancing quicker than ever
  • Wider acceptance and usage of social messages -- both as consumers and influencers
  • A continuous need for brands to create unique consumer experiences and lower acquisition costs
What if you want to create a hyper-local, targeted campaign? One with the ability to draw attention to your current promotions and target qualified prospects within a specific location? Historically, a traditional ad agency or a direct-mail campaign may be able to help. For a hefty fee. Let’s also say you want the agency to create a few slick features. Features that can really help your business by:
  • Improving online interaction
  • Increasing foot traffic
  • Creating sticky word-of-mouth interaction
  • Enhancing customer segmentation and analytics tracking
  • Building new-school forms of loyalty program rewards, both online and offline
Location-based marketing strategies already provide these features, for free. I’ll repeat that so it sinks in: The services are free. Now is the time to use it. Didn’t you learn your lesson when you waited to launch your blog and optimize your website?
foursquare friends screenshot
Is location right for my business?
As usual, most companies will wait before they participate. Forrester Research's Location-Based Social Networks: A Hint Of Mobile Engagement Emerges report in July bluntly stated: “Unless you’re targeting affluent men between 19 and 35, you don’t belong on Foursquare.” Seems like a prime demographic group for both automotive manufacturers and retailers to target.
Even if you don’t recognize it, your customer base already participates in some form of location-based marketing activity. This segment is positioned nicely for explosive growth. In 2009, 42 percent of in-store retail sales were influenced by mobile and Internet research, Forrester estimates. This number is expected to grow to 53 percent by 2014. Consumers enjoy being able to locate points of interest, shops and services via their mobile phones. Also helping drive consumer acceptance is the increased willingness of their peers to share their location in exchange for perks and rewards. (The popularity of the Shopkick app is a testament to this.)

With the introduction of Facebook Places, awareness of location-based services is going to explode. They have the potential to make location-based status updates a mainstream concept by presenting it to 500 million users. According to a Mobile Marketing Association study in April:
  • 63 percent of iPhone owners use location-based services once a week
  • 25 to 34-year-olds are already labeled as frequent users of location-based services
And yet, companies are reluctant to play within the location segment because of the lack of understanding. The biggest problems are not with the location-based services themselves. (Other than maybe their ability to market their own services.) Initial perceptions of platforms such as foursquare, Gowalla and Facebook Places may lead decision makers to believe these are simply game platforms for geeks.

Few people actually understand the full scope of these applications; they’re missing the opportunity to create a profitable element within their marketing strategy. The platforms themselves have already proven to be a success among the early adopter crowd. The next level of success now falls on the creative marketing types to develop winning strategies. Wait until the real benefits and value of checking in are realized by the brands and the individuals -- consumer experiences will really change then.

Within the past few months, the location-based services segment has experienced another significant shift. Specific activity updates combined with location-based check-ins now pack a punch even more valuable to marketers and more engaging for users.

New applications targeting foodies, such as Foodspotting and fiddme, let users share images of their meals while including location-specific check-ins. TV and movie fans have embraced Miso and Philo to share their guilty pleasures. Want to share more of your activities? What about what you’re listening to, reading, thinking about or even attending? GetGlue helps you share those activities with your friends while rewarding your participation. I wouldn’t be shocked if Amazon swallowed GetGlue; seems like a perfect match. I’ll be watching that closely.

carzar screenshotI know what you’re thinking. Where’s the automotive location app?

Keep your eye on CarZar, the first social automotive app with location-based functionality. Founder Jared Hamilton and I created this application to change the way people share pictures of cars with their friends and networks. Instead of posting a picture of a cool car on Flickr, Twitpic or Facebook and sharing the link via email or twitter, pictures are shared with your networks to create instant interaction. Images can be commented on, liked and tagged. Location-based check-ins are an option as well. Sharing images unlocks badges and creates the potential for consumer rewards while creating several new marketing solutions for car enthusiasts, private sellers, car dealerships and manufacturers.

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Tags: automotive, customer, digital, eric, game,, local, location-based, loyalty, marketing, More…mechanics, media, miltsch, promotions, razorfish, services, social


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