Are FourSquare and Gowalla Just Shiny Objects?

If you follow my Twitter stream or listen to my weekly podcast, you’ll know that the question of whether I think FourSquare and Gowalla are shiny objects is a loaded one. Of course I am bullish on the value location-based services like FourSquare, Gowalla offer large and small businesses alike. Truth be told, however, I’ve had a hard time telling clients and prospective clients alike that it’s time to go guns a blazing with location-based services for two reasons:

  1. There’s not enough critical mass… YET
  2. Facebook with it’s 450 million users could come in and crush both FourSquare (~2 million members) and Gowalla (~1 million members) in a New York minute if it decides to get serious about geolocation
With that said, that doesn’t mean that I don’t think companies shouldn’t be starting to think about how to incorporate location-based services into their marketing and social media mixes. Fortunately, there are a number of big brands that are already starting to test location-based services (more FourSquare than Gowalla). TO that end, I’ve provided a list of the companies experimenting with Foursquare below [list is courtesy of David Stutts with a hat tip to the folks at SocialPath for pointing this work out).

  • Starbucks (side note: I’d like to think my wife and I played a role in Starbucks launching this one
  • The Bravo Network
  • Dominoes Pizza UK (I like this one a lot)
  • Jimmy Choo
  • Pepsi (interesting note on this one later in the post)
  • Zagat (this is a no brainer IMHO)
  • Warner Brothers
  • Tasti D-lite (what they are doing is very smart)
  • The Wall Street Journal
  • Marc Jacobs
  • Coach Men’s Store
  • The Financial Times
  • HBO
  • Harvard (sounds like fun)
  • Metro
  • VH1
  • Pennsylvania Tourism
  • History Channel
  • Planet Hollywood Las Vegas
  • Huffington Post (not using FourSquare but mimicking what they are doing)

And here is the presentation on SlideShare that David put together. Click through to get the details on each program.

20 Interesting Things: Foursquare
View more presentations from David Stutts.

So we’ve seen who is experimenting with location-based services like FourSquare but let’s take a step back and look at why companies might want to engage in location-based services.

At the end of the day, location-based services like FourSquare and Gowalla are ultimately going to be best at creating long-term loyalty with existing customers. Companies like Tasti D-Lite have started to figured this out by feeding their reward programs through point of purchase experiences which in turn check users into social sites like Twitter and FourSquare. And when a customer checks in, he/she earn points toward free food/drinks.

Let’s be honest, while it’s nice to earn frequent flier or hotel points, the act of earning them isn’t all that exciting. Yet earning bragging rights by becoming mayor or even showing off the fact that you are buying jeans at that cool new boutique downtown is much more fun. As a business, incentivizing more checkins and thus more opportunities to buy stuff and share that experience with your customers’ networks has nothing but upside for your top and bottom lines.

One of the things I like most about FourSquare from a personal perspective is the discovery element — both in terms of places and people. As someone that is still feeling his way around Austin, TX, I love watching colleagues like Natanya Anderson (big time foodie), Doug Wick and Kathy Warren alert me to good places to get a meal, watch a game or grab breakfast tacos to go. It’s also useful if I’m at a conference or sporting event to see where my friends are. Even if we’re not connected, many people cross-post their FourSquare and Gowalla status to their Facebook and Twitter pages.

Discovery also comes into play with people. If I’m at my local coffee joint, it’s fun to know who else frequents it. In some cases, it can lead to fun connections that one wouldn’t normally make. As an example several months ago my now friend, Jenna Oltersdorf, noticed that I was the mayor of her local Starbucks. Curious as to who the person was who laid claim to such an honor, she reached out to me via Twitter and asked if I’d like to grab coffee sometime (at that Starbucks of course). In related fashion, my colleague, Joe Jaffe, tells a similar story of him bumping into a prospective customer at a restaurant in San Francisco while seeking out the mayor.

Reach and Referrals
The win here is that while customers are working to accumulate points, bragging rights or free stuff by checking into your store on location-based services like FourSquare and Gowalla, they are also sharing you with their network. Better than that, they are also implicitly (and sometimes explicitly) endorsing you by letting others know they patronize your establishment. Think about the power of running a promotion where anyone that checks into your store more than three times over the course of a month gets a one day discount of 25% off all merchandise. In doing so, you’ve created a reason for customers to 1) visit your store multiple times and 2) let their friends know about it when they do.

Before I get you too hot and bothered, there are few additional obstacles that need to be overcome before location-based services really take off:

  • Scale – while location-based services are growing rapidly, they still only represent a few million people at best. This could change in a hurry if Facebook gets serious about location-based services but in the immediate future, it’s really the early adopters that are leading the charge.
    [POST SCRIPT: in publishing the post, I forgot to pay off the “Pepsi” reference above… several weeks ago, I h
    ad a hallway conversation with
    Bonin Bough, director of social media for Pepsi. We were talking about LBS and I told him my theory about Facebook swooping in and crushing FourSquare and Gowalla. He said that he didn’t see it that way and that his bet was on someone like FourSquare that truly embraced business and a desire to help them succeed would ultimately win. This was later confirmed when Pepsi announced that they were partnering with FourSquare as noted above]
    Potential impact on growth = BIG
  • Gaming the system – it is still possible to check into a location without physically being in that location. However, Gowalla has always been a stickler about GPS proximity to a location (to a fault when they first launched) and now FourSquare has followed suit by announcing that you can only accumulate points AND earn mayorships by being within a certain proximity of where the location was originally created.
    Potential impact on growth = SMALL
  • Privacy – this is a tricky one. More and more people (including myself) are becoming increasingly aware about whom they tell about what they are doing. I think the way LBS providers overcome this is to increase the security and the privacy around who can see what and when.
    Potential impact on growth = TBD
  • Pain in the ass factor = while checking in can be fun, it also requires a conscious effort that can sometimes take up to 3-4 minutes to accomplish. This is particularly awkward when you are meeting friends out and they have to wait for you to check in before they can talk to you. My belief is that location-based services over time will allow you to preset places that you frequent (similar to wireless spots that you’ve connected to in the past on your laptop or smart phone) that will auto-check you in. This would go a long way in increasing the checkins by customers with a lot less aggravation.
    Potential impact on growth = SMALL
While there are obstacles that could stand in the way of companies adopting location-based services, I am a firm believer that the rewards far outweigh the risks. In fact, if someone were to give me a truth serum and demand that I tell them what the next “big thing” was, I’d be hard pressed to not say location-based services. Don’t take my word for it though. Instead, keep your eye on the twenty companies mentioned in David Stutts SlideShare presentation above and see if they continue to embrace these new tools.
What do you think? Am I living in my own universe? Feel free to tell me how you feel about the future of location-based services in the comments below.

Show Me Da Monies: Live from OMMA Social

This morning, I had the pleasure of listening in on a panel at OMMA Social titled, Social Media – Hot to Connect Metrics with Objectives. As you can imagine, the focus was on the Holy Grail of social media i.e., measurement. The list of panelists are below (David B. moderated the panel). Since I’m live blogging, the write up will be more of a collection of notes/tweets vs. a cohesive write up. Depending on where this goes, I may go back and do a second look. Here goes:

The panel started off with a discussion of a basic principal of measurement (could be applied to any marketing discipline) namely that it starts with goals. Any company needs to know what they are trying to achieve and ideally, what the benchmarks look like for those measurements. Amber (Radian6) cited a case recently where a company wanted help with measurement yet wasn’t benchmarking across other channels. Of course this isn’t unique but might lead to future frustration as marketers hope/expect that agencies/service providers in the world of “social” will magicially be able to pull meaningfull statistics out of thin air.

David (360i) asked the question of the panelists, “what one thing do you hear that marketers wish they could measure better?” Some of the answers that came back were:

  • Which of all the stuff going on (Facebook, blogging, Twitter) is the most successful?
  • What is the reach (personally, this is a huge one and likely will make or break many social media campaigns this year).
  • Who are my most influential advocates? What spurs them to take action?

Another question (this time from Twitter), “when will predictive analytics take hold in social media?” A good response to this was captured by DaveYamon on Twitter…

@jimsterne says predictive analytics is data poor, SM is data rich: “Chocolate and peanut butter waiting to happen” #ommasocial

Amber chimed in and said that a lot of companies that Radian6 is working with are still in the early phases of adoption. So understanding second and third level impact is still on the horizon. She also emphasized the need for commonality in language between brand marketers and the C-suite. Knowing what “ROI” means and what the expectations are of what’s getting measured (and what’s possible) is key.

Carla (Six Apart) mentioned the importance of letting go a little bit of the rigid structure of traditional measurement.

Another good Twitter comment by Forrester Analyst, Augie Ray

What is the value of a follower? Depends on what they’re saying! #OMMASocial panel<-the tweet that proves its own rule

My new friend, Siouxsie Jennett, asked a question that built on Augie’s point. She mentioned that the CEO of a client company was complaining about only having 200 followers on Twitter. Her question was how to make the C-suite better understand the relative value of a follow. For instance, the aforementioned company only targeted 1,200 companies worldwide. From that perspective, 200 out of 1,200 looked pretty darn good.

Another topic of focus was share of conversation. This metric measures the share of possible conversation that a company could be part of. For instance, a small B2B company should expect to get the same interaction/share of conversation as Nike. But this company should be looking at the amount of conversation around their industry and specifically, among their competitors.

Bottom line, panels like these never dig as deep into the world of metrics as we’d like but there definitely were some interesting perspectives shared. To that end, keep an eye on the Twitter stream coming from OMMA today for other interesting nuggets.

Social Marketing: This ROI is Too Good to be True

Yesterday, Powered hosted a webcast titled “Social Marketing: This ROI is Too Good to be True (archive coming shortly). The presentation consisted of 20+ slides focused on:

  • Branded Online Community Measurement – Kathy Warren, Powered
  • Results of the 2008 ROI Benchmark Study for Social Marketing Programs – Bill Harvey, TRA
  • Social Media: Why it Makes Sense and How I Prove it to Myself – Brian Halligan, Hubspot
Social Marketing: This ROI is Too Good to be True
View more presentations from astrout.

An archive of this webcast will be available shortly.

Cross-posted on

Experts in the Industry: Paul May (37 of 45)

Paul May, CEO and co-founder of Buzzstream, is one of my favorite people in Austin. So favorite that I had dinner at his house with his wife and his two beautiful children recently. But it wasn’t the food that won me over. It is the fact that Paul is interested in the same thing that I am, namely delivering a return on investment in the world of social and online communities (Peter Kim, Kyle Flaherty, Adam Cohen and Lewis Green also fall in this camp).

Check out how Paul (Twitter handle) answered the five questions from the Experts in the Industry interview series — he does some nice sucking up in question three (it worked btw):
In one sentence, please describe what you do and why you’re good at it.
I’m the CEO and co-founder of BuzzStream, a startup that’s building DIY tools for managing word-of-mouth relationships.  I’m good at starting companies because I love doing it (despite the 24/7 schedule, it doesn’t feel like work to me).
How did you get into the world of online community, social media or social marketing?
I like to tinker with new technologies, which drove my initial use of social media tools.  Things grew organically from there for me.  I got into social marketing through my business partner, Jeremy Bencken, who founded  He relied on PR and social media participation to build his company, and managing those relationships was his biggest challenge.  That led to BuzzStream.
If you had $10 million to invest in one company and one company only based on their use of “social,” which company would it be and why?
Ugh…I guess I should say BuzzStream, but the truth is I don’t think that having that kind of money would be good for us.  Companies that need a $10 million investment don’t really interest me.  Part of this is simply because I’m more passionate about smaller companies and the other part of this is because I think the really exciting uses of social media are happening in smaller organizations (not that surprising to me, given that social media is a bottom-up phenomenon).  Give me the $10 mil and let me invest in 20 companies like Balsamiq, BreakingPoint, BackType, Powered, etc. Shining examples of scrappy businesses working with small budgets, but leveraging social media and DIY tools to build brand awareness, generate demand and get product feedback. 
Which business leader, politician or public figure do you most respect?
I like leaders who aren’t particularly flashy but build value over a long period of time and engender great loyalty. In politics, it’s people like Lee Hamilton and Harry Truman.  In business, it’s people like Warren Buffett. 
Would you join a toothpaste community? Why?
No…but I was on a hiking trip once with a guy who cared so much about white teeth that he brushed them as he hiked.  I’m pretty sure that guy would join a toothpaste community.
If you’ve been thinking of starting a company, there’s no better time to do it (yes, even with the economic mess we’re in).  The great companies of the next 20 years are going to get started now.  And the best part is that there’s never been a time where you could get a company up and running for less money.  Google has leveled the playing field for all of us. We just have to be smart about getting our mindshare on Google.