Location Based Marketing – Introduction
2011-2012
Location-Based Services is the
technology that can be used as a platform for marketing purposes. You
can call it after The LBMA ‘an integration of people, places and media’
but this simple explanation doesn’t capture that the value added by the
spatial dimension to mobile marketing is a total game changer… and the
discussion you’ll seeing over the next pages will be a prove of it.
Location-Based
Marketing has been present on the market for almost a decade in form of
SMS or MMS messages but the development of location aware devices as
well as location enabled social media gave marketers new possibilities
to interact with highly targeted customers. New mobile media created new
platforms of communication between business and customers that allows
delivering not only the content, but also the direct feedback, or even
performing final transactions. Location-Based Marketing allows targeting
customers based on spatio-temporal criteria as well as other contexts
that make it possible to deliver relevant value-adding marketing message
to the user at the right time, place and situation. Wide range of LBM
possibilities makes it possible to reach different target groups, with
different level of interaction and engagement.
But the term ‘marketing’ goes far beyond
the advertising and promotion. It means to get to know your customers,
to make extensive customer insight, and by performing marketing process
(which definition you will find later) to create a strong relationship
with the customer getting value in return. But the value doesn’t need to
be measured in dollars but also the information. And the information is
of the biggest value (financial) for everybody.
Location-Based Marketing – Definitions
To discuss the term Location-Based
Marketing it is necessary to fully understand it’s two components:
‘location-based’ and ‘marketing’. ‘Location-based’ part refers of course
to Location-Based Services which I’ve extensively described in the
previous chapter. So let us concentrate on the term ‘marketing’ itself.
Marketing was defined by Philip Kotler
(marketing academics guru) as “the process by which companies create
value for customers and build strong customer relationships in order to
capture value from customers in return” in other words it is a process
through which goods and services move from concept to the customer.
Following Kotler marketing process includes several steps:
- market analysis,
- designing a marketing strategy,
- choosing so-called marketing mix,
- managing customer relationship,
- implementation and control.
It is crucial to differentiate between marketing and advertising.
While marketing is the overall process, advertising is linked only with
promotion of product or service through various communication channels
intended to inform or persuade members of a particular audience.
Advertising is a part of marketing mix within the marketing process.
Marketing mix however
can be described as a set of tools by which marketers can influence the
market. The first marketing mix concept described back in 60s is known
as the ‘Four Ps’: product, price, place and promotion.
There were many variations including 7 Ps… I even heard about 17 Ps.
There are 4 Cs : customer value, cost, convenience, communication, and
there are as well 7C… But for purposes of this discussion let’s stay
with the traditional 4 Ps…
Mobile Marketing Association defines
Location Based Marketing as: “any application, service, or campaign that
incorporates the use of geographic location to deliver or enhance
marketing message/service”. This definition is limiting LBM to a
one-way, enhanced communication channel used by marketers to reach
customers based on their geographic location.
Users of LBS and especially Location Based Social Networks like Facebook Places, Foursquare, Twitter or Flickr produce enormous number of social, spatial and temporal data
which analysed might answer critical questions for marketers about the
customers: Who? Where? When? Why? Providing this information is crucial
for solving marketing intelligence issues: determining market
opportunities, market penetration strategies, development metrics,
investment risks and many others. Further chapters will discuss the
whole range of possibilities provided by Location Based Marketing.
Some people confuse Location-Base
Marketing with the concept of geomarketing. Geomarketing is a set of
tools and methods based on Geographic Information Systems (GIS) focused
mostly on three aspects: analysing spatial customer behavoir, retail
location and spatial marketing management. Geomarketing methodology can
be used to spatialy analyze and optimize elements of marketing process
but it cannot be considered a part of marketing communication channel
itself. There it cannot be considered equal to Location-Based Marketing
itself.
Location-Based Marketing – The Concept
Location Based Marketing has been widely
used by marketers for several years already but the topic has not been
academically investigated. I’ve been doing some significant research in
academic and non-academic literature and the only academic description
was proposed by Shuguoli Li (in 2011) who proposed the concept that LBM
can be described as convergence of three technologies: Location-Based
Services, Mobile Marketing and Contextual Marketing.
Mobile Marketing Association defines
mobile marketing as “a set of practices that enables organizations to
communicate and engage with their audience in an interactive and
relevant manner through any mobile device or network”. Mobile marketing
is the most personal form of web marketing.
Contextual marketing as a form of
targeted advertising that is using behavior or text content imputed by
user to provide personalized marketing information with the Internet in
real-time, so it’s something what you can observe in gmail, when ads are
targeted to what you write. In Location-Based Services as a part of
Context-Aware Services the context refers to spatio-temporal data or
metadata.
But the is as well different approach
and I think that the future marketing will be based to the following
premises. Knowing where and when the customer is, it is possible to
discover why is he there, so the context of this visit. For example if a
customer is at the football stadium during the hour of the match it is
highly possible that he is there to support one of teams. This creates
whole new way to target specific audience with a context-related
information.
Within this model Location Based
Marketing could be defined as a mobile marketing utilizing positioning
technologies to deliver targeted communication channel where one of the
targeting variables (context) is user’s geographic location.
Location-Based Marketing – Taxonomy & Types
Marketers have a wide range
of possibilities to location enable a campaign based on campaign
strategy, objectives and budget. When preparing a marketing strategy
companies usually perform several steps: market segmentation, selection
of target groups, positioning the product within the target group and
preparing a value proposition to the target group. This process
is revealing whether some sort of the location-based marketing is
meeting the objectives of the marketing strategy of the organization.
Depending on the needs of the organization there are several types of
LBM:
- Location Triggered advertisement
- Location Based Social Media
- Check-in Based Contests and Games
- Local Search and Exploration Advertising
- Location Branded Application
- Proximity marketing
- Icons Embedded in LBS Applications
Location Triggered advertisement
Location triggered advertisement is the
first and most basic type of mobile LBM. It uses user location obtained
by one of positioning technologies to provide messaging (text or
multimedia message) or application alerts based on user preferences and
opt-ins. These services usually require from users to opt-in or/and
install application on a mobile device. Location Triggered Notifications
can run on both smartphones and feature phones. The most common
technology used in this kind of mobile marketing is geofencing – setting
up a virtual boundary around a physical venue. Once opted-in, messages
are delivered whenever a consumer enters inside the geofenced area. When
applied to indoor LBM a distance to a venue can be at the level of
several meters up to a few kilometres when used outdoor.
The advantage of text notifications
is possibility to reach every mobile phone with access to cellular
network. From the other hand the smartphone application alerts
give opportunity for rich user interaction. The topic of location-based
text messages will be discussed in details in a separate chapter due to
its significant potential of market coverage. Possibilities of
consumer targeting in smartphone applications is also significant.
Number of active users is one of the most important factors for
marketers to choose a particular advertising platform therefore
Location-Based Social Networks with number of users often exceed one
million are attractive in that matter.
Location Based Social Network Loopt
allow users with smartphones to discover venues around them, broadcast
their location to friends, and to ‘save money’ by displaying nearby
promotions. Company partnered with Groupon - internet service that
features daily deals in a form of discounted gift certificates. Groupon
deals are pushed in a form of alerts or notifications to opt-in users
that are nearby a location of a deal. The application allows as well to
purchase a coupon directly via mobile device.
Location Based Social Media
Presence
in Location Based Social Media including services like Foursquare,
Facebook Places or Twitter gives possibility for a two-way communication
and direct contact with the customer. It can provide for
business opportunity to create an interactive experience in-store that
leverages the technology in the pocket of their visitors—an experience
that will convert them from browsers to buyers and from one-time
customers to loyal fans who act as advocates in both the real and
virtual worlds. Due to the importance of this topic for marketing it
will be discussed in details further in the thesis.
Check-in Based Contests and Games
This type of location Based Marketing
reward users with virtual or/and tangible prizes for
visiting particular locations and “checking in” or/and completing a
particular tasks. Although many Location-Based Social Networks are using
elements of gamification there are several dedicated platforms
and specific marketing campaigns that differentiate both cases.
There are two types of location-based contest and/or games used for marketing purposes:
- using existing location-based gaming platforms
- using one or multiple location-based social media
Some organizations partner with
location-based gaming platforms to engage customers. One of the most
popular platforms is SCVNGR. This platform allow companies to create
challenges to customers. User has to perform a certain task e.x. take a
picture or eat particular dish to earn points, which are redeemable for
real-world rewards.
There are as well several examples of
successful location-based marketing campaigns that were utilizing
potential of Location-Based Social Media to engage customers into active
interaction with the brand. One of the most well know marketing
campaign of that type was organized in April 2010 in London by Jimmy
Choo - fashion house specializing in luxury shoes, designer bags, and
accessories. The campaign called “To Catch a Choo” was a treasure hunt
engaging users on multiple platforms: Twitter, Facebook and Foursquare.
The concept was that a Jimmy Choo
representative would place a pair of company’s sneakrs worth $500, take a
picture, post it on the campaign twitter account, and finally check in
with Foursquare in order for users to know the location of the sneakers.
The person who found both the shoes and representative and approached
him/her with the phrase “I’ve been following you’, won a pair of the
sneakers.
By including the element of the verbal
confirmation as well as the location tracking using Foursquare, Jimmy
Choo’s was able to counter the issues of GPS unreliability and the
system being gamed, which are especially important considerations when
handing out high-value prizes.
Local Search and Exploration Advertising
Local
Search Advertising is advertising for listings of local points of
interest (merchant retailers, restaurants ect.) depending on a
geographic position of a mobile device. There are many services that
offer this kind of mobile service utilizing Location Based Services
including CitySearch, Dex, YellowPages, Google Places, Yahoo Local,
AroundMe ect. Recommendation services Yelp or Location Based Social
Networks like Yelp and Foursquare have also functionality of local
search. Sponsored listings may be included in the listing in some
services.
Usually this kind of applications have
functionality to perform a local search based on different categories of
venues as well as browsing venues on the map. The aim of marketers is
to promote their venue within the service. These kind of solutions
started to utilize the concept of augmented reality in order to be
more attractive for users.
Augmented reality Apps like Nokia City Lens is good example of exploration features:
Location Branded Application
The usage of LBS technology to enhance
brand-owned mobile media services. Within this type of Location-Based
Marketing there are two models used by organizations:
- General applications (the weather channel)
- Sponsored location-based App (SitOrSquat App by Charmin)
- In-store value-adding applications (Maijer hipermarket chain)
Media
brands are the most ardent supporters of the first group of apps. One
of the best examples here is Weather Channel App that has a
functionality to display weather forecast at the location of the user.
The next great example is the SitOrSquat App which
is the first Bathroom Finder which presents info on near by public
restrooms. Additionally you get user reviews, hours of availability and
even photos. It’s sponsored by Procter & Gamble Co.’s Charmin which
is well-known brand in toilette paper industry. “Our goal is to connect
Charmin with innovative conversations and solutions as a brand that
understands the importance of bringing the best bathroom experience to
consumers, even when they’re away from home,” explained Jacques
Hagopian, Brand Manager for Charmin in the press release. “Helping
people find a bathroom that is clean and comfortable is exactly what the
SitOrSquat project is all about.”
The other group of applications are
branded LBS services that are adding-value to customers of a particular
brand. Meijer – American hypermarket chain (in cooperation with Point
Inside Inc.) released the “The Meijer Find-it” application. The aim of
the application is to pinpoint the items that customer is looking for on
an in-store map and navigate user to this location. The application
allow to activate discount coupons ect.
Proximity marketing refers to localized
wireless distribution of advertising content associated with a
particular place. This kind of Location-Based Marketing is not linked
with geographical coordinates but with a distance
to short-range wireless technologies including Bluetooth, WiFi, NFC
(Near Field Communication).
Due to several technological issues
Bluetooth as well as WiFi proximity marketing although still used did
not achieve a major market acceptance. The technology that seems to have
a potential to be widely used is Near Field Communication. Interest in
NFC has surged in 2011, primarily because Google recently joined a cadre
of wireless carriers, banks, and credit card companies planning a
number of ways to use the technology for mobile payments in the United
States. NFC is a radio communication that is enabled when two devices or
device and NFC chip are touching each other or are in a close proximity
(usually no more than a few centimetres . This gives marketers a field
to create whole new level of in-store interaction with a customer.
Icons Embedded in LBS Applications
Icons embedded in LBS applications is
a sponsored embedded advertising. Sponsored embedded advertising that
is displayed without a search in a form of icons or logos displayed in
maps or augmented reality.
Location-Based Marketing – Location Triggered Advertisement
Advertising is linked with promotion of
product or service through various communication channels.
Location-Based Advertising can be considered promotional message send by
text or multimedia message based on user geographic position.
Although the market share of smartphones
is growing very fast the majority of mobile phone users still own
feature phones. According to The Pew Research Center 2011 the 83% of
adult Americans own a mobile phone and 35% of them own a smartphone. In
2011 there were close to 6 billion active mobile subscriptions across
the globe of which less than one third are smartphone owners, that is
why the potential of SMS and/or MMS based mobile marketing accessible
from every mobile phone, cannot be underestimated.
The study performed by Bruner and Kumar
in 2006 showed that at this time attitude towards mobile advertising,
including location-based advertising was rather negative. User did not
differentiate between regular and location-based marketing messages.
Receiving too many messages from marketers even if users have opted-in
with, caused users to consider those messages as a spam. “Consumers saw
mobile spam as having a negative impact on the brand image of the mobile
network operator”, especially that in the United States, the user is
financially responsible for the transmission and reception of messages.
The study done by Kelley and published in 2011 showed that users’ have
strong privacy concerns towards this potentially invasive form of
advertising however advanced privacy settings may help alleviate some of
these concerns, making users more comfortable.
The company called Placecast has used
the potential of such a solution. The organization provides services
Shop Alerts. It is an opt-in marketing service via mobile devices
designed to drive customers to specific physical venues. ShopAlerts is a
white-label service that delivers location-triggered mobile messages
when customers enter geofenced area. The service works automatically on
any mobile phone and does not require installing additional
applications. Users opt-in to a given brand’s program and receive text
messages on their phone with information, coupons and offers from places
of interest around them.
In October 2010 Placecast collaborated
with O2 the second-largest mobile operator in the United Kingdom owned
by Telefónica. Two companies launched a six-month location-based
marketing pilot in the UK, signing up Starbucks and L’Oréal as the first
two brands to take part in the trial. The project invited consumers to
opt in to the service to receive relevant messages dependent on their
age, gender, interests and their location. In October 2011 according to
Placecast they have reached 6 million subscribed customers.
It is important that user receive only
relevant messages. Besides promotional messages they could have as well
situational context (time of day, weather, community routes) or
emotional context (places that might connote use of or relevance to the
retailer such as sporting and event venues, recreation areas). O2 says
that typically a user gets no more than one message per day, and only
between four and six promotions per month. Messages sent as part of the
service are free to users. It is as well clear how to opt-out from the
service.
This solution gives opportunity to
target wide number of mobile subscribers, however from the practical
perspective it requires from the service provider to have an agreement
with network operator and users to opt-in to receive promotional
materials, which in cases of small brands and campaigns is not cost
effective.
Location-Based Marketing – Location-Based Social Media
copyrights:Aleksander Buczkowski 2011-2012
Social Media is a “group of
Internet-based applications built on the ideological and technological
foundations of Web 2.0, and that allow the creation and exchange of User
Generated Content”. Business has been adding social media including
Twitter and Facebook to their marketing mix from the early beginning of
the phenomenon. In the beginning of 2012 Facebook had more than 800
million active users, from which 44% accessed the service through their
mobile devices. Twitter had over 300 million users from which 55% were
mobile users . In the next stage of development social media started to
utilize the concept of location. First by Location-Referring Services
e.g. venue social recommendation web services where users were publicly
sharing their opinion and experiences about particular restaurant or
store. Further the intersection of social media and Location-Based
Services resulted in the development of Location-Based Social Networks
or Location Sharing Services, which can be defined as social media or
networks that are accessible through a mobile device which allow to
broadcast user’s location or geotag created content. Location Based
Social Media can be broadly divided taking into account how they are
utilizing the concept of location:
- ‘At-the-location’
- ‘About-the-location’
‘At-the-location’ services can be
defined as services where location-based content is created at the
geographic location. ‘About-the-location’ services can be defined as
services which are referring to particular location but the content is
not necessarily created in this particular physical place.
From the other hand Location-Based Social Media can be divided taking into consideration dedicated functionality of services:
- Location-Based Social Networks or Location Sharing Services (e.x. Foursquare, Facebook Places)
- Location-Referring Services (e.x. Yelp, Qype, Google Places)
- Social Media with geotagging functionality (e.x. Flickr, YouTube)
Within this three categories only the
first group – Location-Based Social Networks is fully dependent on
mobile devices , which means that users are able to use the core
functionality only with the location-aware mobile device with installed
specific application. The content of this type of Location-Based Social
Media is assumed to be created at the location of the venue it refers
to. Two other groups are web-based services that are offering additional
features with their mobile versions e.g. local search, automatic
geotagging. Location-Referring Services content is not likely created at
the location of the venue it is about the location. Social Media with
geotagging functionality content can refer to anything (not necessarily
the location that it was created at). Geotagging usually can be
automatically done with a mobile device but in some cases it can as well
be added later using computer (e.g. Flickr). All of these services
offer different privacy settings, so that particular information can be
visible publicly, to venue owners, and to personal social networks.
From the marketing perspective all types
of LBSM can bring value to marketing process however Location-Based
Social Networks are receiving the biggest attention due to their
interactive potential of building community around physical venues. Most
popular LBSN can be divided into two major groups depending on whether
the location is linked with the core functionality or it is an
additional feature:
- Dedicated
- Integrated
Dedicated Location-Based Social
Networks include such a media where the primary functionality is based
on Location-Based Services (location of the mobile device and wireless
internet). There are more than one hundred of dedicated LBSN but most
of them did not achieve any significant market recognition. The most
popular service from this group is Foursquare with the community of 15
million users world-wide and growing around 1 million users per month.
The other services until now did not capture that significant number of
active users however their unique functionality and specific user group
can be of significant value to particular brands in their market
segment. The industry can be considered to be in its infancy and it is
struggling with several issues. The first problem is lack of profitable
business models to monetize user base. The second issue is lower than
anticipated user acceptance for location sharing services. Due to
several scandals including iPhone by Apple Inc. in April 2011, the
location tracking technology in mobile devices was under intense
scrutiny. Nonetheless Location-Based Social Networks are gradually
achieving mainstream market acceptance what is visible in the growing
number of users.
| Dedicated Location Based Social Networks | |
| Name | Number of users (in December 2011) |
| Foursqaure | 15 mln |
| Loopt | 5 mln |
| BrigthKite | 3 mln * shut down in Dec 2011 |
| SCVNGR | 1 mln |
| Gowalla | 1 mln * acquired by Facebook in Dec 2011 |
From the other side Integrated
Location-Based Social Networkd are those where location is an extra
feature, not necessarily a core functionality. Two major players in this
group are Facebook and Twitter, but as well other services including
Flickr and You Tube that are utilizing location-awareness of mobile
phones. Facebook added location-based functionality in August 2010
introducing Facebook Places and from that time it recorded more than 40
million users broadcasting their geographic location.
Most of Location Based Social Networks
have in common so called ‘checking-in’ – the act of claiming one’s
location in a particular venue (verified by positioning system) and
sharing it with one’s social network, general public, or selected
individuals. There are two types of ‘check-ins’: active and passive.
Active is when user physically pushes a button on his location-aware
mobile device to claim his presence in the venue. Passive is when user’s
device or an action (e.g. swiping a loyalty card) claims his presence
in the venue without him physically doing it in a mobile device.
Location-Based Marketing – Foursquare Analysis
Foursquare is the biggest and fastest growing Location-Based Social
Network and its marketing value has been already acclaimed. Its
characteristics represent in the most comprehensive way general
attributes of LBSN.
Foursquare was launched in March 2009. On the company’s website one can read that it is a “mobile application that makes cities easier to use and more interesting to explore. It is a friend-finder, a social city guide and a game that challenges users to experience new things, and reward them for doing so. Foursquare lets users ’check in’ to a place when they’re there, tell friends where they are and track the history of where they’ve been and who they’ve been there with”.
Foursquare Specials are rewarding customers with a tangible reward depending on a goal of promotion:
Foursquare has currently clients for the following mobile operating systems: iOS, Android OS, Windows Mobile OS, BlackBerry OS, Palm OS, and the Android platform.
“Check-ins:
If user has checked into a venue within the last 3 hours, are is one of the 10 most recent visitors or one of the top 10 most frequent visitors, verified venue owners can see:
If user has checked into a venue within the last 3 hours, is one of the 10 most recent visitors or one of the top 10 most frequent visitors and user has linked his Twitter account to foursquare account, verified venue owners can see user’s Twitter ID.”
This policy is significantly limiting possibilities how marketers and/or venue managers can use Foursquare data. It however gives however the important signal for users that their privacy is one of a major priorities for the service.
The other significant issue is linked with the question: where when and how often do people check-in? The same research displays on a figure 23 frequency of check-ins for various places.
As
stated in the section reviewing Foursquare privacy policy there are
strong limitations on accessible data, to ensure that verified venue
owners will not overuse any personal information for business purposes.
Verified venue owners have access to data concerning: users who have
checked into the venue within the last 3 hours, number of user check-ins
if he/she is one of the 10 most recent check-ins, number of user
check-ins at the venue if he/she is one of the top 10 most frequent
visitors, (photo, first name and first letter of the second name)twitter
ID if not limited by user in a customized way.
Foursquare was launched in March 2009. On the company’s website one can read that it is a “mobile application that makes cities easier to use and more interesting to explore. It is a friend-finder, a social city guide and a game that challenges users to experience new things, and reward them for doing so. Foursquare lets users ’check in’ to a place when they’re there, tell friends where they are and track the history of where they’ve been and who they’ve been there with”.
Main features
Foursquare is a social network so it
allows connecting with friends and keeping track of where they are and
what are they doing. To engage more friends or/and followers from other
social networks user can connect Foursquare account with his/her
Facebook and Twitter profiles and broadcast the venue that he/she
checked-in via those services. The other major functionality is link
with place discovery. Based on positioning system user can browse
through venues that are physically around him. Users can as well add a
new place that was not present in the service. What seems to be one of
the most important aspects from user perspective is that Foursquare
employs elements of gamification – particular features used
traditionally is games in order “to improve user experience and user
engagement in non-game services and applications”. Foursquare uses
elements including collecting points, badges and mayorships to motivate
people to engage more with the service and while the service is not a
game as such, it arguably features pervasive game elements using real
places. The game aspect of Foursquare offers virtual and tangible
re-wards for check-ins. Virtual rewards come in the forms of points,
badges, and mayorships visible in one’s public pro-file. Badges are
awarded for a variety of reasons, e.g. for starting to use the service,
checking-in on a boat, checking-in with 50 people at the same time, or
checking-in at a special event. Mayorships are awarded to a single
individual for having the most check-ins in a given place in the past 60
days, where only one check-in per day is counted.
Foursquare is giving business several
opportunities to utilized it’s functionality. From the marketing point
of view presence in a major social network is additional communication
channel. If it fits into marketing strategy and budget than it should be
utilized. When a customer checks-in to a particular venue he is a
potential client, who shared his visit with a social networks. The first
reward for customer is that he is getting points, that might lead to
gaining new budget of a mayorship. However from the marketing
perspective a customer likes to be rewarded in a tangible way.
Foursquare gives business as well possibility to reward customers in a
tangible way with a free of charge tool – Foursquare Specials.
- Newbie Special – unlocks on a user’s first time visiting your venue. This is the most direct way to drive new traffic to your venue.
- Friends Special – a number of foursquare friends need to check-in with to unlock a special.
- Flash Special – limited daily quantity of goods sold with a special offer.
- Swarm Special – a number of foursquare users need to check-in within a 3-hour window in order to unlock a special.
- Check-in Special – every check-in gives predefined reward
- Loyalty Special – rewards for retaining customers
- Mayor Special – reward for a mayor – the most frequent visitor over the last 60 days.
Foursquare has currently clients for the following mobile operating systems: iOS, Android OS, Windows Mobile OS, BlackBerry OS, Palm OS, and the Android platform.
Foursquare privacy policy from marketing perspective
Foursquare is very strict about the privacy matters and it does not allow venue managers to overuse any personal data for business purposes. On the company’s website one can read the follow privacy policy concerning data sharing with venue owners. Additionally user can opt-out from every information sharing settings.“Check-ins:
- Verified venue owners can see the users who have checked into their venue within the last 3 hours
- Verified venue owners can see the time you checked into their venue and the total number of your check-ins at that venue if you are one of the 10 most recent check-ins
- Verified venue owners can see the number of your check-ins at their venue if you’re one of the top 10 most frequent visitors
If user has checked into a venue within the last 3 hours, are is one of the 10 most recent visitors or one of the top 10 most frequent visitors, verified venue owners can see:
- Name: Just first name, last name initial
- Email and phone: No
- Photo, with link to your Profile: Yes
- Verified venue owners can see who is the Mayor of that venue
If user has checked into a venue within the last 3 hours, is one of the 10 most recent visitors or one of the top 10 most frequent visitors and user has linked his Twitter account to foursquare account, verified venue owners can see user’s Twitter ID.”
This policy is significantly limiting possibilities how marketers and/or venue managers can use Foursquare data. It however gives however the important signal for users that their privacy is one of a major priorities for the service.
Foursquare users motivations and behavioral patterns
Why people broadcast their location?
Foursquare and other Location Sharing
Services (or Location Based Social Networks) have been used for
marketing purposes from the begging of their existence. In order to
investigate what value does those networks bring to marketers we need to
understand what is the user’s motivation for location sharing. Well of
course each of us knows why we broadcast our location to friends, but
until its proved by science these are only personal impressions.
In the paper published in 2011 “I’m
the mayor of my house: examining why people use Foursquare” Janne
Lindqvist have investigated the topic. The quantitative survey with 219
participants revealed several motivators for participants that can have
some relevance for marketers:
- Gaming, fun, badges – the most perceived value seems to be linked with the element of gaming, collecting points and badges contributes to the perceived fun of Foursquare.
- Social connection – interacting with friends seems to have a big value for users. The most important aspects are: knowing where the friends are and keeping in touch with them and checking-in to the same places and the same time. The social aspect of Foursquare is very important here, majority of participants claim that Foursquare is fun because their friends are using it.
- Place discovery – majority of users have discovered a new places or where motivated to go to new places because of Foursquare. Most participants where pleased with tips about venues that they have seen on the service. The discounts offered by venues were not that important for users – less than half of them addressed it as a motivation.
The other significant issue is linked with the question: where when and how often do people check-in? The same research displays on a figure 23 frequency of check-ins for various places.
From the bar charts one can observe that
restaurants and bars are the most popular places to check-in at even
several times a week, which seems to prove the social and place
discovery usage model of Foursquare. From the other hand participants
hardly ever check-in at schools and homes, which might be caused by
privacy concerns. There is a small group of users that are willing to
share their home location and a bigger one that share work location even
more than once a day. The survey showed that there are people who are
interested in gaining as many points, badges, and mayorships as
possible, and check-in everywhere.
The other research by Cheng et al. 2011
investigated patterns from more than 22 million check-ins globally.
Generated from the data tag cloud of the most popular venues that users
check-in shows that the most popular places are restaurants, coffee
shops, stores, airports, and other venues reflecting daily activity
(e.g. fitness, pubs, church). The result seems to prove several points
from the previous paper presented. Cheng researched as well the temporal
distribution of check-ins in the World:
This pattern provides a glimpse into the global daily activity
intensity. One can observe there three major peaks: one around 9am, one
around 12pm, and one around 6pm.
Conclusions
The end purpose of social media is not
to simply push out a message through yet another channel, but to
deliver a message in a way that is both compelling and sharable, and
that the recipients will want to share with their network. Marketers
using Location Sharing Services must look at ways in which they can
provide an interactive experience in-store that leverage the technology
in the pocket of their visitors—an experience that will convert them
from browsers to buyers and from one-time customers to loyal fans who
act as advocates in both the real and virtual worlds. You will not do it
with a simple discounts, the study proved the gaming and social aspect
is more important. Discounts – yes, but make them more valuable and let
customers be more engaged to get them. They will come back for more.
Social-gamification – this seems to be the key to success.
Location-Based Marketing – Location-Based Analytics
Location Based Social Media gives new
possibilities to marketers. They are not only a new communication
channel but they allow engaging customers, interacting with them,
getting a direct feedback or even talking to them. When users ‘check-in’
they broadcast their location to the public, their social network and
as well share certain information with venue managers. Although it is
significantly limited it gives business some possibilities to find out
who their customers are, who are their friends, what do they do etc.
This kind of information in such a scale was previously difficult to
obtain.
From the perspective of retail and
service organizations Location-Based Marketing in Social Media is a new
channel and value of it seems to be recognized however not necessarily
understood and measured. Although companies have been investing in
social media marketing for several years already and those expenditures
are growing year by year, marketers continue to struggle with the
methodologies for validating these investments. Inability to measure the
Return on Investment was named by marketers as one of the most
significant barriers to the adoption of social media tactics by
organizations. Potential benefits from implementing social media
marketing have been broadly discussed in the literature (in the table
below). Even though there some established Key Performance Indicators
(KPIs) to measure those benefit, their direct impact on the
organizations financial performance has still not been measured and many
marketers claim that non-financial character of social media insight
should not be turned into financial measurement .
| Benefits/measurement of Social Media marketing | |
| Benefits | Measurement |
| Generating awareness of a brand | Unique page views, fan/follower counts |
| Increasing engagement with a brand | Facebook, blog ect. comments, re-Tweets, time spent on the Web site |
| Increasing brand’s influence | Third-party mentions and links |
| Motivating specific actions (purchases, leads, etc) | Conversions/sign-ups rates |
| Social reach | Presence on a different platforms |
| Increased traffic/subscribers | Increase in % of generated traffic |
| Improved search ranking | Linear increase in search ranking |
| Reduced marketing expenses | % saved expenditures |
| Increased Sales | % of net sales increase |
A customer’s value is not equal to how
much they spend at a store, businesses need to take into consideration
future purchases and the influence they may have through social media.
Universal McCann’s Social Media Research Wave 3 research report
(published in Spring 2008) looked at 17 000 Internet users in 29
countries. According to this study, social media can have a dramatic
impact on brands reputation: 34% post opinions about products and brands
on their blog and 36% think more positively about companies that have
blogs.
Marketing in mobile Location-Based
Social Media gives from the other hand different opportunities. It
connects virtual social media with physical world via location-aware
mobile device, which mean that a customer can not only interact with a
brand in front of the computer but as well-being in a physical nearness
from point of sales. It provides marketing opportunity to create an
interactive customer experience, that is linking in-store activity with
technology ‘in the pocket’ of visitors.
Location-Based Social Media provide as
well different value to organizations. It gives new opportunities to
monitor social media not only by brand in general but as well by
particular locations of a brand. This new possibilities need a well a
new approach. There is a significant discrepancy between theoretical
concepts of measurable value of Location-Based Social Media data for
marketing and the actual data than can be legally accessed and used in
the most popular LBSM due to privacy issues and limitations of different
platforms. The following section will review what kind of data can be
accessed using two Location-Based Analytics platforms: integrated –
Foursquare Merchant Dashboard, and dedicated – VenueLabs Connect.
Further, it will compare content of two types of Location-Based Social
Media: ‘at-the-location’ and ‘about-the-location’ based on Frankie’s
Sports Bar & Grill case study.
Foursquare Merchant Dashboard – integrated Location-Based Analytics
Foursquare gives to business managers a
tool to monitor their venues – Foursquare Merchant Dashboard. It gives
access to the following real-time data:
- Total daily check-ins over time
- Most recent visitors
- Most frequent visitors
- Gender breakdown of customers
- Daily temporal breakdown of check-ins
- Portion of venue’s Foursquare check-ins that are broadcast to Twitter and Facebook
As
stated in the section reviewing Foursquare privacy policy there are
strong limitations on accessible data, to ensure that verified venue
owners will not overuse any personal information for business purposes.
Verified venue owners have access to data concerning: users who have
checked into the venue within the last 3 hours, number of user check-ins
if he/she is one of the 10 most recent check-ins, number of user
check-ins at the venue if he/she is one of the top 10 most frequent
visitors, (photo, first name and first letter of the second name)twitter
ID if not limited by user in a customized way.VenueLabs – dedicated Location-Based Analytics
Although there are several platforms
that allow to monitor social media e.g. Radian6, MicroStrategy Social
Intelligence, only few of them utilize the potential of location-based
social data. Currently the only social media analytics company that is
entirely built around location-based content is VenueLabs.
VenueLabs is a Seattle-based company
funded in 2009 as ValueVine offering social media promotion software
(Appendix I). In Feburary 2011 the company launched ValueVine Connect –
the first platform described by founders as ‘Local Storefront Analytics’
– that tracked and measured consumer activity by location. The platform
was targeted to franchise companies with multiple branches. After
releasing that product ValueVine experienced a significant interest and
growth in this area and in October 2011 the founders decided to rebrand
the company to VenueLabs and focus particularly on the niche of
Location-Based Analytics.
While the single location retail store
or restaurant is able to manage multiple sources of location, social
content the large chain companies are facing a challenge in this area.
VenueLabs Connect platform addresses these challenges by using
source-based search engines versus keyword-based search engines used by
most of web monitoring platforms (e.g. Radian 6). Keyword engines are
searching and indexing websites to find ‘a keyword’ about particular
organizations or/and brands while VenueLabs identifies the
Location-Based Social Media websites and reports to clients information
accumulated from each of those web services.
Essentially the company monitors,
aggregates and analyse location-based and location-referring social
media data including: check-ins, tweets, likes, reviews, shares,
comments, mentions, follows from relevant resources and presents them in
a form of a dashboard (figure 28). All the data used by the company are
openly available on the internet. VenueLabs reports that there is a
significant ‘blind spot’ in the local information acquired through
keyword-based search. The ‘blind spot’ can be defined as the gap between
the information referring to particular location but not listed as
relevant due to the search technology. VenueLabs reports that this gap
can reach 70%.
VenueLabs company have kindly granted me
the access to their Location-Based Analytics platform for the research
purposes. Due to privacy issues granted access is limited and cannot
utilize all the features of the service. The aim of the research is to
analyze quantitative and qualitative, non-financial measures that can be
relevant to determine potential benefits coming from Location-Based
Marketing. The aim of the research is not to test quality of the
performance of the service.
Presented on the figure above VenueLabs
platform dashboard shows several metrics used by the company to measure
performance of its clients brands:
1) Performance of the brand (aggregated from all location):
- Percentage of positive consumer sentiment (vs. negative sentiment)
- Number of check-ins over different platforms
- Number of Facebook fans
- Number of Twitter followers
- Number of reviews over different platforms
- Sentiment trends (positive and negative over time)
2) Comparison of brand’s locations over time:
- Activity
- Sentiment
- Reach
3) Performance of particular location (on the right panel map)
4) Qualitative Information:
- Recent Active Channels
- Biggest Fans
- Biggest Critics
- Loudest Voices
The most crucial quantitative
information presented on the panel is consumer sentiment. It is measured
as aggregated over last 10 weeks from all resources percentage of
positive opinions in all aggregated positive and negative opinions. The
number is generated by adding together all positive opinions and
negative opinions in a linear way, without applying any weights. Neutral
or not qualified messages are not taken into consideration. The
sentiment is identified by keyword recognition algorithm. The analysis
performed further within the dissertation shows that algorithm works
well for short messages/opinions/reviews of customers however relatively
long messages are often mistakenly assigned to wrong category changing
the result. Nonetheless the value of the sentiment information can be
measured and assign to:
- A brand in general
- To specific locations or group of locations
- Temporal variations of sentiment of a brand and of specific locations
The activity comparison shows overall
consumer activity at the brand locations. Activity is defined as
checkins, mentions, comments, and likes. Reach comparison shows how
widely content for each location has grown over time.
VanueLabs show as well the most active
online channels for a brand in the last 60 days. The dashboard allows to
view users that are considered to be the biggest fans and biggest
critics. They are selected based on previous sentiment identification
and again keyword search engine to identify the best/the worst
opinions/reviews. The loudest voices represent those consumers that are
most engaged with a brand. They might represent every kind of sentiment
but they are the most active online.
The other product of VenueLabs company
is called VenueRank and was released in November 2011. It is a single
score in the range of 0-100 that allows VenueLabs clients to compare
storefronts within a brand, across brands with competitors, and groups
of stores within and across brands. The score examines four different
dimensions:
- consumer sentiment
- community engagement
- community size
- reach
Community engagement stands for online activity on the monitor social
websites referring to particular location. Community size refers to
number of followers across platforms. Online reach refers to presence
across multiple platforms. The algorithm of weighting the components of
the score is a trade secret of the company and could not be obtain.
Location-based technologies are dynamically evolving. The dissertation is summarizing the state of the art of Location-Based Marketing in February 2012 but due to the constant development one cannot fully anticipate how will the industry look like in 12 or even 6 months. There are however certain trends that seems to be highly probable.
Integration of different types Location-Based Services
Different types Location-Based Services will be integrated to enhance user interaction and engagement. One of examples could be application called Zombie Run, which links elements of jogging monitoring application with Location-Based Game. Integration of elements of augmented reality in different types of LBS seems to be a trend as well.
Integration of Location-Based Services with other technologies
One can observe integration of Location-Based Services with other technologies e.g. DOOH (Digital Out Of Home) technologies, which are displaying Location-Based Social Media content on the screen inside or close to the venue.
The company called LocaModa is providing solutions that are displaying e.g. Foursquare and Twitter live feeds on the screen inside particular venues, which is linking virtual community activity with in-store customers.
Increasing role of Location-Based Analytics
According to ABI Research – technology market research company – the Location-Based Analytics market in US will reach the $9 billion in value by 2016. There are companies that are monitoring Location-Based Social Media content e.g. VenueLabs, but there as well business that monitor other consumer behavior that can be used for marketing purposed. One of examples could be a company called Path Intelligence which is providing analysis of spatial behavior of customer in shopping malls based on their mobile phone signal detection.
Indoor Location-Based Marketing
In late November 2011 Google publicly launched new version of Google Maps – 6.0 for Android platform with indoor maps and indoor navigation functionality. Although it is still in a beta mode and with limited locations, all major competitors in the market including Nokia announced to present their indoor navigation platforms in the near future. There are as well branded location-based indoor navigation products like mentioned in the thesis “The Meijer Find-it” app
Location-Based Marketing – Trends & Challenges
Location-based technologies are dynamically evolving. The dissertation is summarizing the state of the art of Location-Based Marketing in February 2012 but due to the constant development one cannot fully anticipate how will the industry look like in 12 or even 6 months. There are however certain trends that seems to be highly probable.
Integration of different types Location-Based Services
Different types Location-Based Services will be integrated to enhance user interaction and engagement. One of examples could be application called Zombie Run, which links elements of jogging monitoring application with Location-Based Game. Integration of elements of augmented reality in different types of LBS seems to be a trend as well.
Integration of Location-Based Services with other technologies
One can observe integration of Location-Based Services with other technologies e.g. DOOH (Digital Out Of Home) technologies, which are displaying Location-Based Social Media content on the screen inside or close to the venue.
The company called LocaModa is providing solutions that are displaying e.g. Foursquare and Twitter live feeds on the screen inside particular venues, which is linking virtual community activity with in-store customers.
Increasing role of Location-Based Analytics
According to ABI Research – technology market research company – the Location-Based Analytics market in US will reach the $9 billion in value by 2016. There are companies that are monitoring Location-Based Social Media content e.g. VenueLabs, but there as well business that monitor other consumer behavior that can be used for marketing purposed. One of examples could be a company called Path Intelligence which is providing analysis of spatial behavior of customer in shopping malls based on their mobile phone signal detection.
Indoor Location-Based Marketing
In late November 2011 Google publicly launched new version of Google Maps – 6.0 for Android platform with indoor maps and indoor navigation functionality. Although it is still in a beta mode and with limited locations, all major competitors in the market including Nokia announced to present their indoor navigation platforms in the near future. There are as well branded location-based indoor navigation products like mentioned in the thesis “The Meijer Find-it” app
No comments:
Post a Comment