Location-based Services: Are They There Yet?

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For now, however, mobile is taking a back seat. Facebook's "focus is on the ads right now," explains Shon Christy, founder and president of Christy Creative, LLC, a midwestern social media marketing firm, "particularly ads that are part of Facebook's Reach Generator ad packaging program." The Reach Generator program, launched by Facebook at the end of February, enables participants to promote posts from their pages and pay via an ongoing payment plan, rather than per-click.

Still, Facebook can't be counted out completely out yet as an LBS player, for two reasons.

First, in late 2011, Facebook announced that it had hired pretty much all of the developers and engineers from Gowalla, an LBS-based social media platform that focused on social-network city guides using members' photos and descriptions. Facebook did one of its famous acqui-hires--instead of buying the company outright, it picked up the talent but left the technology and the service alone. As a result, Gowalla ended up shuttering itself on March 12, 2012.

Second, Facebook has rolled out its new Timeline feature to users, a chronological tool which has become its default interface. The Facebook location-sharing tool enables users to assign location information to events, images and statuses throughout their Timeline "history." As a result, location will become much more a part of the user's story, interwoven with all the other properties of Facebook posts.

With the Gowalla brain trust on board, it is not unreasonable to expect more location-oriented functions to appear within Facebook as the Timeline continues to roll out. Mobile users might want to keep an eye out.

Location-based services as social media

When businesses consider using location-based services, one thing to remember is that LBSs are basically yet another form of social media. And according to Shon Christy, founder and president of Christy Creative, it's imperative that businesses make sure they have the right fit for their social media outlay.

"My clients don't have the resources to waste getting their social media strategy wrong," Christy emphasized.

But an even broader issue is how businesses can use any social service, location-based or otherwise. Jack Gold, a 20-year analyst with expertise in the mobile space and founder of J. Gold Associates, has a counter viewpoint. "The notion that business can leverage consumer-facing services is a new one," Gold says.

It's not that Gold has anything in particular against social media use for businesses, but he is particularly cautious about how businesses should go about using public, non-secure networks that were most definitely not designed with businesses in mind -- or, if they were, it would be business solely on the terms of the social network in question.

"None of these networks really have corporate-level features," Gold explains. "Not without some level of enhancement."

For Gold, the focus is not on the individual networks, so much as developing a cohesive strategy that protects the company from the many pitfalls of using any social media service. Location-based services, in particular, offer unique challenges. Privacy is the most obvious concern, since customers are often rather prickly about letting their whereabouts be known.

"Governance of policies is the key problem," Gold adds. "Users and companies don't always see eye-to-eye on expectations of privacy."

This means that the development of policies around the users' privacy (and the rest of the social media interfacing) is critical if a company wants to connect to customers using these public networks.


Foursquare was one of the first to exploit the notion of location-based check-ins in 2009 -- an idea that other services have tried to reproduce, to varied success. With Foursquare, a person's location is important only as a way to find friends and compete in geographic-based gaming.

The basic idea of Foursquare is likely the most familiar of all the LBS tools: Users check in with their mobile devices at venues and are awarded points for checking in. Check in enough times at a venue (which can be a business, concert or event) and you can be awarded a badge from Foursquare, or become "Mayor" of that venue until someone comes along and bumps you out of that spot.

Most members use the service in one of two ways: They can either compete for badges and points without necessarily revealing their locations, or broadcast their locations in the hopes that nearby friends will see the updated status online and join them at that venue. Even this is not binary: Many users game and socialize in blended efforts that suit them.

Christy highlights this gamification as a major reason why Foursquare is often the centerpiece of a social media strategy for his retail and restaurant clients. "As a society, we're just competitive," Christy says.

From a user perspective, Foursquare clearly has an impressive base: At the end of 2011, there were a reported 15 million Foursquare users. This strength is enhanced by tight integration with Facebook (which also neatly solves Facebook's immediate lack of a native LBS).

For businesses, the social/geo/gaming aspect of Foursquare is very easy to plug into. Mayors can be awarded small gifts for their titles: Free coffee or a certain percentage off for that day's purchases are very common. Businesses can also create longer-term promotions that involve more user participation, or branded "tip" lists for Foursquare users that reward checking in at certain venues or purchasing items from businesses.

According to Silva, Foursquare has all but wrapped up the LBS space. "They are doing the best job so far in monetizing location services," Silva explains, going on to describe a recent Foursquare/American Express partnership program that enables an instant discount for patrons who check in at participating vendors. For vendors, this is a painless way to upsell, Silva adds, while customers experience a seamless discount, since the transaction takes place on their American Express card.

Recently, Foursquare has enabled user tip lists that let participants recommend (or not) any given venue and give their own advice on what's good or bad about the venue. This has been seen by some analysts as a foray into Yelp's social recommendations.

"If you're scoring at home, Foursquare claims to have "tens of millions" of tips," wrote marketing and SEO expert Matt McGee on his blog in January. "Yelp has somewhere around 22-23 million reviews, as I understand, and Google has somewhere in the neighborhood of 13-15 million reviews and ratings combined... I'd say that the game is on in local search."

Next page: Google's stumbles

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