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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of mobile.  Contact him today to learn more.

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Over one hundred billion dollars is spent annually on “traditional” online advertising, and each of the last three years have been prematurely declared the year of mobile advertising. For too long, the promise of mobile advertising has been based on technical, location-awareness-related advances the industry has heralded as beneficial, while these same advances scared consumers away.

This is finally changing and consumers are discovering simple, easy iterations of mobile technology that provide simple, easy solutions for problems they want solved. Saving money via special offers/coupons at known, nearby business locations is the best example and Groupon and their kind have driven socially-promoted savings on purchases that can be measured in increments of $Billions.

group-buying-sites

The Bridge To Mobile Commerce: Deals and Group Buying

Groupon is the fastest growing technology company in history and Founder/CEO Andrew Mason links their success to providing a “hybrid of local advertising and local commerce”.

Groupon’s unprecedented success should serve as a  lesson to the various elements involved that melding established consumer behavior and technology in a simple, easy way that also leverages consumer acceptance of social media  is a key factor for success.

The real power of this model lies in the fact that incremental, tracked purchases are made at the beginning of the consumer interaction, generating pay-for-perfomance, frontside ROI metrics that blow other “wait and see” methods of marketing out of the water. When you add in a “social media award” component (share the deal and get the deal for free), this model becomes even more powerful, as the campaigns quickly become viral and market themselves.

While Groupon, Living Social and the rest have been written about extensively, I am not sure the full potential impact of this model is understood. These companies solve an existing problem for local businesses by converting the traditional coupons, sales, and special offers they have used for decades into tracked offers that can measure in both financial upside and foot traffic. They also tap exisiting marketing budgets by stealing pre-allocated dollars away from traditional media via no-risk performance-based value propositions (that work).

This is in contrast to much-touted hyperlocal mobile push advertising campaigns that require a problem to be explained, before a retail business or brand will considering paying to try to solve it (assuming they agree the opportunity for ROI is there). More importantly, most retail businesses still do not have a way for mobile banner click-throughs to land a consumer in a place where a purchase can be converted. This is where mobile commerce comes in.

ebayMoving The Merch: “Redemption Is Mobile Commerce”

The quote above is from Dan Gilmartin of Where.com and I agree. While redemption of printed or digitally displayed group buying vouchers brought into a restaurant, hail salon, or spa (for example) works well-enough, retailers that sell lower-margin goods want converted sales that “move the merch”, as they say. Giving 50% of your margin away to Groupon and their kind, is a fine solution for high-margin, service-oriented businesses, but retailers need to link campaigns for specials to actual sales.

Converted sales transactions, rather than impressions rendered or click-throughs to a standard website, are what attracts small to medium-sized retailers that gain little from traditional brand marketing. Since non-standardized point of sale systems for redemption are still the Achilles Heel of the mobile coupon model, tracked, mobile commerce conversions will emerge as the new, essential “redemption metric” in 2011.

With $1.5 billion in mobile sales logged in 2010 (a 3X increase over 2009), Ebay’s mobile commerce success shows that consumers are willing to transact on a mobile device. In just the 30 days before Christmas 2010, eBay transactions were valued at over $100 million  in gross merchandise value, a 135% increase over last year (Mobile Commerce Daily).

“Today’s consumers are transforming the shopping experience with their mobile phones, and retailers who have not broken down their siloed channels will not be able to keep up,” says Jim Bengier, global retail industry executive for Sterling Commerce.

Coda-research

2011: The Year Of Mobile Commerce

In the rush to check off the branded app and social media platform “must-have yes boxes” , mobile commerce sites were passed over by retail brands, and consumers have been left to “pinch and zoom” and fumble with large format websites not optimized mobile devices.

How big is the mobile commerce opportunity? In July of 2010, a scant 12% of online retailers had a mobile commerce site and an even smaller 2% had an app with checkout capability (Acquity Group). Even with these dismal brand/retailer adoption numbers, US mobile-commerce (sans travel bookings) grew from $400 million in 2008 to $3.4 billion in 2010, and growth is predicted to be “explosive” in 2011 (Mobile Commerce Daily). Show me the money, indeed.

In 2011, linking a smooth-running mobile commerce engine to special offer and redemption platforms/efforts will emerge as essential, as this is the simplest way to track success in a way most retailers understand. Retailers who sell online should build robust mobile commerce sites linked to their etail “technology stack” in order to capture converted sales, driven by mobile (or social) marketing. Simply “scraping” an etail website and shrinking it to fit for mobile ignores key differences in mobile vs at-home consumer purchasing-related behavior.

Social Commerce: Sharing The Wealth

Of the 620 million consumers using Facebook, the most active 200 million access the social network through their mobile device.

Why do large retailers and brands spend money building up millions of Facebook Page fans and then drive them away from Facebook to convert a sale? It’s even worse if they send a mobile consumer to a standard website.

Increasingly in 2011,  retail brands will use Facebook to promote special deals for fans, and give them the option to buy what they are promoting by linking to a mobile commerce page where that product is cued up. Facebook might-well offer these tools for businesses as a part of Facebook Deals, as they look to emulate Groupon’s incredible success.

Social commerce will take a while to catch on, but is on the horizon. It is an extension of mobile commerce, because technical integration with the “etail technology stack” is needed to create Facebook Commerce tabs, so secure transactions can take place within Facebook pages.

The power of social commerce really shines when, for example, mobile (or Facebook commerce tab) purchases driven by special deals offered to Facebook fans can be shared within (and extended to) the buyer’s social graph, after the purchase is made.

Mobile-Payments-M-Commerce-Transactions

Tap, Tappity, Tap: NFC  Taps Established Consumer Behavior

I’d be remiss if I did not mention NFC (Near Field Communication) in this post. While mobile and social commerce are next up for online purchases on a smartphone, mobile payments at point of sale for smaller transactions will also be a hot topic in 2011. The path to a “mobile wallet” will be rocky, but NFC will emerge as the best way to both validate mobile proof of presence, and conduct small “tap to buy” transactions using value deduction from a secure, preloaded digital account contained within the device. Consumers know NFC and it is easy to use. The fact that three big US carriers have buried the hatchet long enough to line up behind NFC via the formation of Isis, is a powerful signal.

These inherently mobile “real life hot links” need to go somewhere, so NFC will support the rapid growth of mobile commerce as well. Watch for NFC tags to start appearing in pilots/tests on out of home advertising, packaging, and even wine bottle labels.

Conclusions

Mobile commerce drives revenue and location-specific redemption of special offers that can be promoted via social media marketing. Redemption takes the form of real mobile commerce transactions linked to promotions that mimic the powerful Groupon model, without giving up the margins. Mobile commerce will grow rapidly in 2011, as branded apps fade in importance, in direct proportion to increased data speeds,  accelerated location-enabled smart phone adoption/usage by consumers, and the creation of mobile commerce sites by retailers.

Facebook will increasingly play a role in every brand or retailer’s marketing plan. With 200 million accessing it via their mobile device, Facebook will become a place where discounts, sales, and special offers are  not only shared and compared, but increasingly parlayed into converted mobile commerce sales. Facebook commerce transactions that leverage this same technical backside integration and occur within Facebook will not be far behind.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of mobile . He is also running sales for for mobile commerce solution provider Unbound Commerce. Contact him today to learn more.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location-based social media marketing. Contact him today to learn more.

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Not so long ago, in a Harvard dorm room not so far away, Facebook was born. In record time, Facebook has graduated to the big time.

Today’s announcement of Facebook Deals is very significant, as it shows Facebook is looking beyond contextual advertising and toward the power of mobile “social experiences” to drive purchases and tracked point of sale interaction. Fueled by special deals offered by the legions of businesses who already use Facebook as their primary social media engagement platform, Facebook Deals tips their m-Commerce strategy hand and, as such, is a big deal.

Beyond Advertising

While college students certainly still use Facebook, it seems a broader audience that includes 500 million active users also see the appeal. Facebook has capitalized on this user traffic to the tune of an estimated $600M in contextual advertising last year. This is small beans compared to the close to $30 Billion in annual revenue Google is generating, 97% of which comes from advertising.

While this gap between Facebook and Google is one indicator the size of the advertising opportunity in front of Facebook, they also have the unique ability to capitalize on something perhaps even bigger, by driving tracked proven m-Commerce revenue linked to a specific location-based marketing campaign for small businesses and large brands alike. Google has been trying to back itself into this powerful social interaction value proposition but, to-date, has failed.

200 Million people now access their Facebook accounts via mobile. If Facebook can provide a secure, customizable revenue engine, reporting dashboard, and accounting system that users and businesses both trust, they could be in a unique position to capitalize as m-Commerce finally emerges from uncertainty and takes center stage.

Facebook Well-Positioned With SMBs

The rapid adoption of Facebook by consumers and businesses alike has changed the very nature of marketing. The new two-way street norm of required engagement with consumers has evened the playing field between small and large brands – and has fueled Facebook’s growth and popularity via an ever-increasing stream of relevant content at the same time.

As location-enabled smartphone user ranks swell, connectivity issues improve, and data costs fall, Facebook hopes the day is not far off when all businesses will need a live dashboard that controls a branded mobile Facebook page. This could become more important than having a “standard” website. For many, it already is.

The Check-In Craze: Watching And Learning

As the Foursquare and Gowalla-lead “Check-In” LBS craze swept in last year, Facebook watched and waited. User numbers climbed even without an LBS play and advertisers lined up. Facebook watched and waited, and learned.

When Facebook finally launched check-ins via Facebook Places “way back” in August of 2010 and embraced the unique location-awareness capability of mobile, it was a sparse affair that simply answered the Foursquare and Gowalla challenge. Even if basic, checking in directly on Facebook sped up the process by cutting out the middle man, since Foursquare and Gowalla piggybacked on the users Facebook graph.

Lately and perhaps not coincidentally, the initial novelty of “checking in” via a function-specific platform/app like Foursquare and Gowalla has waned. Even though each company is adding functionality as fast as possible, they simply do not have the local reach to add real consumer rewards fast enough to please most of the people most of the time. Facebook, if nothing else, has this reach, and this add to the power of the timing of the launch of Facebook Deals (yesterday).

Tapping The Power Of The Private Sale

Another location-based force that has rapidly re-shaped consumer interaction with products and services is the “private sale” phenomenon. While it’s long been accepted that consumers will act based on opinions from a trusted network of peers, there are finally ways these actions to translate into real, tracked mobile sales that have the tangible and impactful side benefit of driving live bodies into a retail point of sale.

In the last 6 months, “private sale personalized shopping” companies like Groupon, Living Social, and RueLaLa have been printing money by tapping into the desire for small and mid-sized businesses to drive new customers into their storefronts by offering special loss-leader deals via mobile.

It is interesting to note that CEO Mark Zuckerberg focused in on the “if you get three friends to check-in with you, you get something free” element yesterday. If you use Living Social, you know that this exact model provides the viral, turbo-charged boost they use to spread their deals among the interlocking social graphs of their subscribers.

I heard recently that Groupon is only able to process 1 in 7 deals proposed to them by small  businesses and is generating an estimated $50 Million a month in revenue. Worth an estimated $1.3 Billion while taking in only 135 Million in funding, Groupon is proof that small businesses will share a generous portion of the incremental gross sales, in order to have a shot at winning over new potential long-term customers that they know came in and redeemed the loss-leader offer. If this $50M a month figure is accurate, by the way, it means that the Chicago start-up is roughly matching behemoth Facebook in annual revenue.

Again Facebook has watched and waited, as (literally) hundreds of “daily deals for you” copycat (and well-funded) companies have sprung up and, as such, have proved the viability of the “opt-in daily deal” model on a massive scale.

Since almost 70% of US businesses have a Facebook page right now, Facebook could blow past these”check in for a personalized deal” companies that all must compete with each other and sell-in their solution to one small business at a time (or, more importantly, one giant brand’s “gatekeeper” agency at a time). The latter, in my opinion, is the harder row to hoe.

Into The Path Of The M-Commerce Parade

M-Commerce is a hot topic and, finally, there are real metrics to back up the years of wild expectations and predictions. With Deals, Facebook has stepped off the sidewalk and jumped out into the middle of the street, just as the location-based “special offer” m-commerce parade is poised to sweep over them.

These “daily offers” are nothing more than a new, location-based (mobile) way to promote the same tried and true “chalkboard” restaurant/bar specials or “sale bin” store items you see every day. The difference is that they are discoverable, BEFORE you enter the location/point of sale, when a consumer is in actual real-time physical proximity to that same location and have volunteered their location to the platform that is displaying the deal.

Think mobile is not ready to handle for the volume of potential commerce? eBay will more than double m-Commerce this year, from $600M last year to an-expected 1.5 Billion in 2010.

With the launch of Deals, Facebook is now playing in this hot space and can offer richer and richer solutions for businesses and consumers alike that can scale very quickly. They can capitalize on what has worked for other players with far-less reach that have conveniently prepped the landing zone before them, and avoid what has not.

A Single Solution?

By positioning the mobile Facebook app as the “login” solution that can also serve as an authentication engine, Facebook hints at their intent to solve the problem of “app option overload” for consumers and the “financial backside fragmentation” issue that has long-plagued the e-Commerce world. These elements will be especially interesting to watch.

While consumers do not all enjoy having to open a different app every time they walk into a business, the more important reason Facebook is poised to solidify the opportunity like no other is due to the fact that small town small businesses are generally already familiar with managing the backside page interface. Again, a whopping 70% have a Facebook page.

With so many social media options that may or may not include a customizable LBS m-Commerce element, big national brands (and their agencies) are also seeking a single solution. If Facebook simply can add the “check-in” and related special offers and m-commerce redemption tools they need to what they already provide, the barrier to entry becomes very small across all adoption fronts.

What’s The Big Deal

If mobile Facebook users can act upon a proprietor’s customizable call to action  by being directed to the location near them, debit an account on the same mobile platform that showed them the offer, and link it to trusted input from their social graph, Facebook will be linking the power of social marketing and m-commerce.

If Facebook can prove that consumers will not react adversely to special offers being “pushed” toward them when they are out and about, based on actual location and other algorithmically calculated variables like time, weather, and past behavior, well that would be something.

What if they could prove that consumers will volunteer “personal preference profiles” including what brands they like most, in exchange for real savings linked to location-based local or regional deals personalized for them? Not so far-fetched.

With m-commerce predicted to explode from $1.9 Billion in 2009 to almost $24 Billion by 2015 (see above), Facebook Deals might be just the beginning for the social network. Yes, Facebook Deals is a big deal.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location-based social media marketing. Contact him today to learn more.

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Wilson Kerr (@WLLK) is the Founder of Boston-Based LBS consulting firm Location Based Strategy, LLC. As a Sociology and Communications Major, Wilson has long been interested in forces that drive changes in human interaction and communication. He can be reached at Wilson@LBStrategy.com.

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Every so often a disruptive innovation take root so rapidly that negative sociological impacts are masked by the euphoria of the initial rush to acceptance.

Facebook has over 500 Million users and the average active user spends 55 minutes per day checking or updating their newsfeed. If we assume all users are “active”, this amounts to (the equivalent of) an incredible 52,279 YEARS per day spent on Facebook.

There is no doubt that Facebook has reconnected old friends, served as an easy bridge for quick communication, and allowed people to share their business and personal lives in a new and exciting ways. But is there a societal downside to this torrent of  flippant, instantaneous, and often narcissistic overshare?  Aside from the security and privacy implications of sharing inappropriate details of location or age or sexuality, there is another element that I am not sure has been explored fully.

Is Facebook causing divorce? Increasing evidence suggests that easy access to out-of-context personal details and feelings from others can become a distraction and temptation that fuels the exploration of unconstructive possibilities by the recipient. Can quickly and easily reconnecting with people from one’s past cause the reawakening of feelings that are out of context and likely irrelevant, yet real and powerful enough to cause marital disruption?

Clearly, Facebook does not cause divorce, as there are any manner of ways to end a marriage, if one is so inclined. But this new form of communication is clearly having some effect on relationships, as it opens a door to the past instantly and fuels communication between people in a radically new way.

While data is as scant as Facebook is new, an article from Australia digs into the issue, stating that, “British divorce firm Divorce-Online said Facebook was cited in one-fifth of the divorce petitions it processed last year…Australian Family Relationships Clearing House manager Elly Robinson said online behavior was causing friction in households. “Relationships develop more quickly online because inhibitions are lowered, it’s easy to exchange information, people are online 24/7, there’s an (endless) amount of people you can link up with who are there for the same reason, real life pressures fade away … it’s a bit of a fantasy world,” she said.

CNET blogger Chris Matyszczyk has written several posts about this subject and, in one, explores the notion of Facebook fueling a sort of addictive jealousy feedback loop, whereby potentially damaging communication is happened upon by one partner, causing a disruptive, endless loop of distrust to form, with Facebook at the center of this storm of discontent.

Obviously, a phone call or an email or letter can accomplish a reconnection to an old flame, if one is so inclined. But Facebook allows this curiosity about the past, and the temptation to explore it, to become actionable in a matter of seconds. Like a magic, instantaneous worldwide time machine Rolodex, complete with photos and (often) intimate details, Facebook fosters connections and the sharing of thoughts and feelings that are perhaps detrimental to one’s current situation, or at least out of context.

The tendency to peek into the lives of others that Facebook  fosters is by-design and how Facebook’s business model works. The more “what’s on your mind” thoughts and details shared and read, the more pages viewed, the more ads displayed, the more money Facebook makes ($800 Million annually, at last count). And this is largely positive and benign. But this also can lead to the turning over of emotional rocks from the past, that are sometimes best left undisturbed. People often do not think about how their personally charged thoughts and feelings will affect others, when broadcast to a wide audience, with a range of perspectives and loyalties.

Living in the moment, being present, and looking ahead is not something Americans are particularly good at. We tend to yearn for “days gone by” and wish we had done things differently. We devour nostalgia with an insatiable appetite for “a simpler time”. Classic Coke, The Wonder Years, Happy Days, Back To The Future, That 70’s Show…the list goes on and on. Being thoughtful and aware and mindful is very important and this is especially true when communicating with others.

Facebook, on the other hand, tends to encourage flip, often thoughtless interaction and communication that sometimes causes unforeseen harm. A letter can be torn up. A private conversation held in-trust can be kept secret. A harsh exchange can be apologized for and forgotten about. But a Facebook post is different. It can be forwarded and copied and viewed without limit. A flip curiosity about “what might have been” or a personal complaint from the moment, can become locked in and temporary feelings pushed out to others without context are easily mistaken for deeper sentiments.

Those who are divorced can share their personal joy and newfound “freedom” with trusted friends who might be in the throes of a difficult period of their marriage. This overshare of thoughts, photos, and “advice” from those who have not succeeded with the hard work required to keep a marriage intact is often counter-productive and can even be purposefully disruptive.

For a frightening look at just how public Facebook is, try typing the search term (in quotes) “don’t tell anyone” into the  Openbook site. This is a live searchable feed of real Facebook posts, created to demonstrate the perils of Facebook overshare.

Facebook is a powerful new social networking tool with many benefits. Marriage is not always easy. Both of these statements are true. But all who use Facebook should be mindful of the need to be sensitive to others and use extra care when communicating to your network while temporarily blinded by emotion or distress.

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Wilson Kerr (@WLLK) is the Founder of Boston-Based LBS consulting firm Location Based Strategy, LLC. He can be reached at Wilson@LBStrategy.com.

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Wilson Kerr (@WLLK) is the founder of Location Based Strategy, LLC a Boston-based consulting company dedicated to location-based marketing and business development. You can “become a fan of” Location Based Strategy on Facebook.

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Now that the collective tech/social media world is coming off the sugar rush of Facebook’s big Open Graph announcements of last week, I thought I’d take a fresh look. I should say that I am 41 years old and an active user of Facebook. I certainly see the powerful implications of sharing subjective information across a social network (graph). What I am not 100% sure about is if anyone is stepping back and questioning the viability of their approach.

Facebook made an audacious and smart positioning move to grab the social media high ground, but what are the real benefits to consumers? To Brands? To Facebook? Did Facebook really just “Win The Web”, as the New York Times proclaimed?

Not New News

First of all, last week’s thunderstruck, gushing over-reaction of adoration among industry insiders and press seems somewhat odd, given that Facebook introduced the Open Graph concept at the Developer Garage of October 28, 2009. Here’s an article by Nick O’Neil that outlines what he rightly categorizes (at the time) as “part of a broader move by Facebook”.

From Facebook at the time: “The Open Graph API will allow any page on the Web to have all the features of a Facebook Page…it will show up on that user’s profile and in search results, and that page will be able to publish stories to the stream of its fans.”

So, why then the wild enthusiasm and assertions? Perhaps the youthful Zuckerberg-lead Facebook team best-embodies the promise of social networks to finally dethrone some of the entrenched ad-supported superpowers like Google.

A Google Killer?

Is this move so profound that it will allow Facebook to collect enough information to power a “social search engine” and, as such, topple Google? There is no doubt that Facebook is in a position to learn, store and categorize opt-in personal preferences of individuals and utilize them to great advertising sales advantage. But there are major differences between these companies.

Google makes $23 Billion annually by giving people useful personal and business tools and serving effective and unobtrusive contextually ads in exchange for the use of these tools. Google increased Gmail users by 43% last year and their list of services is impressive, and growing. Google also has direct connections with the local retail points of sale that are so important for tracking incremental purchases and, as I have written about, is well-along the path toward deciding on the right way to collect, measure, and capitalize on these metrics.

Facebook, on the other hand, is not useful. Yes, I said it…fun, interesting, and a novel new socially relevant way to correspond with others with shared commonality. But useful? No. Over 37% of all people signed up for Facebook are inactive. That’s 150 million of them. Facebook made an estimated $650 Million last year and certainly has a lot of traffic, but they have not yet capitalized in a way that comes even close to challenging Google. The fundamental value proposition Facebook offers consumers is different. Try not checking your Facebook page for a week and see what happens. Facebook is a nice to have and, as such, needs to be incrementally more thoughtful about what they do and how they do it.

Size Matters

There were other implied assertions Facebook made last week that I question. Namely, that growth and unique appeal can coexist. Facebook has rocketed to popularity by mimicking the same voyeuristic appeal as the original printed freshman facebooks most of us used to peruse the social landscape back in college. But, after freshman year, the book became irrelevant. Why? Because the size of the graph made the details of the graph highly relevant. If the network grows and becomes indistinct, it loses its effectiveness and the stream of information becomes cloudy and irrelevant in the context of a broader network (no longer wow’d by the initial relevance).

For brands, the “fan page” acts as a tighter circle of consumer interaction and an opt-in sub-network, within the broader context of the web. Consumers have to “become a fan” and the thoughtful act of doing this makes the sub-network powerful and relevant to the brand and others within it. Facebook’s switch to the “Like” button was designed to make it easier for people to convey their preferences. This also has the potential negative side effect of broadening the input stream of consumers to specific sub-networks and clouding the waters  by making the size of the pool exponentially larger and, as such, less meaningful. The more the merrier for Facebook, as this grows the audience to whom they will serve ads to and pads their knowledge about every Facebook user. But it could dilute the opt-in pool for brands and clog the feedback loops.

The Like Button Is Too Easy

The sharing of subjective opinions and preferences based on real world interactions with products and services is the real power of social media (and location based marketing). Ratings and reviews are the best example of how consumers interact with real places and share input, currently, but it does not take much imagination to see that real-world interaction with a wider range of products and services is coming soon.

Providing this subjective input takes a minute or two and this fact (especially when consumers are mobile) serves as detergent to flip or casual positive or negative inputs. The “Like” button allows instant input, with less thought, all designed to rapidly fill Facebook’s master database. Great for Facebook and their advertising machinery plans, but the user experience (in the form of people’s news feeds) could-well become clogged with a deluge of “likes” that become less impactful in direct proportion to the times the too-easy “Like” button is used.

Personal Preference Profile Probes

What Facebook has announced is very smart, but it requires compliance by companies and brands. They are essentially telling any company that has a web page dedicated to something someone would “Like” to infuse Facebook code into that page, with specific metadata tags that categorizes the real-world product shown. This is very good for Facebook, but it essentially means web pages need to insert little  “probes” under their skin that feed a stream of data back to the Facebook mothership. Will companies and brands do this?

They might, but they also might realize that they are turning over the keys to the kingdom to the same barbarian at the gate who will then come back and charge them advertising fees based on the personal preference profile metrics they delivered on a silver platter. They could also do things in the future with this “holy grail” (the personal preference profile) that we can not conceive of currently. My point is that brands should not jump on this before they carefully consider the implications of the volume of valuable opt-in metrics they will be delivering to Facebook, and the benefits.

Content websites should be careful too, as Facebook is sure to sell advertising based on consumer preferences for something they read. Again very good for Facebook, but it could mean a thorny editorial/sales line in the sand gets crossed if readers get hit with ads for products related to an element of the content that does not resonate with the consumer targeted or if the ad seems to imply a paid connection between the editorial content and the advertiser.

Three Things Not Announced: Location, Location, Location

In a surprise to many (including me), Facebook made no mention last week of location-based marketing and framed their announcements around web-based open graph linkages and, more specifically, the integration of “like” button code on product pages to tap the power of personal preference aggregation. While the “visionary” open graph high ground move got the press, the real pot of gold lies at the end of the point-of-sale rainbow, reached by linking marketing to incremental tracked sales. Brands make money by selling more products in stores, period.

It was widely speculated that the reason Facebook did not announce checkin functionality or QR codes or NFC to link updates with real-world physical locations last week was that they might buy Gowalla or Foursquare. We now know that Facebook was about to launch a “door sticker” campaign to reach out directly to merchants and is using, of all things, SMS short codes to track consumer interaction and link it to location.

I personally think this is just the beginning and Facebook will dive headlong into the location-verified Proof Of Presence Metrics game soon. But can they pull it off? A simple location-enabled “Like, with comments option” might not be the right move here. This is too flip, to fast, to easy. Again, good for Facebook as they seek to remove friction for aggregation of personal profile preferences for who, what and where, but I am not sure members of the social graphs want to hear about every checkin and every store or venue or brand that those in their network simply “Like”.

My Friends All Like Different Things

I know the people in my social network and I am certainly more interested in hearing their preferences and opinions than the blanket ads I see every day, foisted upon me by those charged with selling the products. This, of course, is the power of social networks to shape consumer behavior. But I also have a solid majority of pals who are not on Facebook. The two I reached both gave me the same answer, which was, essentially, “Facebook is stupid. It’s full of asinine egocentric banter and takes way too much time to deal with”.  I sympathize and often have to weed though posts about spilled milk (literally) and inane random thoughts.

But I also use Facebook for business and have made an effort to be a fan only of pages conveying important, relevant information. I, for one, do not intend to fill my feed with all my “Likes” and hope those who fill my feed will hold off too. Aside from the obvious volume implications, I am not going to be swayed by the fact that someone “Likes” anything. Now, if they took the time to write a review or checkedin on Gowalla and stopped to rave about something and this was posted with intent, I’d be inclined to take a look. But the click of a “Like” button is too fast, to flip, and too easy and we all like many, many different things, for different reasons.

I know brands and companies have a different Facebook opportunity to potentially take advantage of, but the people making these social media marketing decisions are usually personal Facebook users as well.

Considering The Implications

Facebook has the traffic and the momentum to do some powerful things. I just hope the collective Social Media/LBS/Mobile world can stop for a minute and consider the positive and negative implications of not just the “open graph”, but the site-integrated Facebook metadata tags that, if implemented, will feed consumer preference back to the now-warming Facebook ad engine. Agencies should consider this move on behalf of their clients carefully. I hope Facebook users consider the long and short term implications of sharing so much about their personal product preference profiles with Facebook, the privacy issues this raises, and the effect of potentially having volume and size dull down the interactions with others within their network. And, I hope Facebook considers the user experience implications and that they treat the heavy crop of rich realtime opt-in metrics they will/hope to reap with consideration. Easy is not always good.

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Wilson Kerr (@WLLK) is  the founder of Location Based Strategy, LLC a Boston-based LBS consulting company founded in 2007 (Facebook). Wilson is also a location based blogger, speaker, panelist, and thought leader.

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Social networks are poised to be the most-effective marketing tool of the next decade. Facebook is the biggest social network and word on the street is they will announce location-sharing functionality very soon. While this new feature will make Facebook more interesting and compelling for individual users, location sharing is not new.

What would be new and what would interest me is if Facebook introduces transformational marketing tools for brands that will link Facebook campaigns to incremental visits to locations where real products can be purchased. These incremental, verified store visits and real-world product  interactions could very well become a new ad unit, and could reshape the very nature of how mobile advertising ROI is measured.

A New Consumer Touchpoint

Before I address Facebook-powered brand interaction linked to real locations, I want to back up and address why social networks have recently hit the marketing radar and become so popular generally.

People voluntarily linked by something in common (friendship, an interest, or a preference for a brand) can convey subjective information with far more impact than the traditional “broadcast” norm that has ruled for so long. Sounds pretty obvious, but this is the fuel that social networks run on.

Since it’s no longer only individuals that can have Facebook pages, companies can interact with consumers who have opted-in to their specific social sub-network, within the larger Facebook ecosystem. Messages initiated by the brand and information conveyed is disproportionately impactful, due to the highly prequalified nature of the opt-in audience.

Remember, these new social media touchpoints are also a two-way street. Members of these opt-in brand sub-networks (Facebook fans) can interact with the actual company producing the products and their collective input can shape the products or services offered. Companies can engage in real dialogue with their customers like never before.

A Huge Opportunity: 26,143 years/day

With a reported 400+ million registered users and 250+ Million active users spending 55 minutes daily on Facebook, Facebook is best-positioned to win the race to integrate location and roll out location sharing functionality for consumers on a grand scale. If they are smart, they will also introduce innovative location-based marketing tools for brands and companies.

Of US companies on Fortune’s Top 100 list, almost 70% reported having Facebook pages. Each averaged about 41,000 fans and was posting 3.6 new messages a week (Report from Jan 2010).

Wait, let me back up a second and get out the calculator: 250 Million users at 55 minutes each daily is 13.75 Billion minutes a day, or 229+ Thousand hours! This is the equivalent of….26,143 years spent interacting with Facebook, each day. Facebook, if it were a country, would the third largest in the world and now threatens Google for web traffic generated. Facebook is very well positioned indeed.

Location, Location, Location

Either through a GPS receiver (outside) or cell tower triangulation or wifi location systems (inside), most mobile devices are “location enabled” and can share this location information with the social networking application interfaces people choose to access. The fact that we carry a device as we go about our daily lives that knows where it is becomes even more significant when we consider that this is when we are in contact with real goods to buy and the locations that sell them.

If, as is expected, Facebook helps make location sharing within social networks ubiquitous by introducing this functionality on a grand scale, the opportunities for marketing campaigns that utilize shared, opt-in real-time location information should grow very rapidly.

Again, while location sharing among individuals is neat, the tracking of opt-in interactions with actual points of sale is the real financial opportunity for Facebook. Odds are, consumers will not mind an offer to try a new coffee flavor while they are in a coffee shop, if they have volunteered to share the fact that they are there. Google now takes in $23 Billion a year on the AdWords educated bet they made back in 2000. That is: ads can be both effective and unobtrusive,  if they are contextually relevant.

Checkins, QR Codes and ROI

According to Forrester, the amount of real-world sales influenced by online ads/marketing will be $1.4 Trillion by 2014.  The percentage of sales influenced by the web is increasing at a compounded rate of 9% annually. Yet these linkages between online research and offline sales are almost totally untracked. By understanding this research online, buy offline (ROBO) “gap”, you can start to see the potential upside of linking a Facebook-powered marketing campaign to actual in-store visits and what this means for measuring ROI.

For popular “checkin” platforms like Gowalla and Foursquare, place-labeled location sharing serves as the cornerstone of their whole model. Facebook could mimic this and introduce “Facebook Checkins”, allowing mobile users to tap a button and instantly post where they are and (optionally) what they are doing, as a status update.

This same functionality could be linked to campaigns run by brands and the metrics tracked and fed back to the brands. If a special deal or offer is needed to incent users to checkin, fine. Most businesses already thrive on these proven revenue drivers. Large national incentive and loyalty programs already in-place could provide the fuel for these programs to take off fast.

Why are those funny little square Quick Response (QR) codes suddenly so important to understand? Because consumers can scan them with a phone and they both deliver information to the application that scans them and use this information to launch little portals between the real world and the virtual, online world. Sounds odd, but this is only because this way of quickly interacting with a place or product is in its infancy in the US.  Take a trip to Japan if you want to comprehend the potential impact of tracked campaigns that make use of QR codes. Here’s an example, from last year.

Facebook QR codes for brands or location checkins could drive incremental tracked and quantified consumer interactions with the dealer doors where branded goods are sold (or even with the actual product). Facebook could capture all the details of how and when this occurred and, I’d imagine, be able to deliver a compelling ROI/metrics story to keep brands signing up for more.

Stay Tuned..

Facebook’s F8 conference is next Wednesday April 21st in San Francisco. It is widely predicted that they will launch location sharing for their users and, possibly, unveil related news for brands.

How will Facebook harness the power of location for its 400 Million registered users and give brands the tools they need to track social network marketing campaign ROI in new ways? This is what I will be watching for, as this is where the money is. Stay tuned..

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Wilson Kerr (@WLLK) is  the founder of Location Based Strategy, LLC a Boston-based LBS consulting company founded in 2007 (Facebook). Wilson is also a location based blogger, speaker, panelist, and thought leader.

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