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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 and helps brands understand location-based forces that drive changes in human interaction and communication. He can be reached at Wilson@LBStrategy.com.

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As a LBS consultant seeking to fortify my position as a thought leader in the area of checkins and Mobile Proof Of Presence (MPOP), I scan daily blog posts, articles, tweets, newsletters, and emails for real, live examples of companies harnessing the potential of MPOP to drive sales lift.

Many experts (myself included) have opinions about how impactful the phenomenon of “brands delivering personalized marketing messages to opt-in consumers at the exact time and place they are most-able to act upon these messages” will be. My use of the word “phenomenon” here tips my hand, but specific examples that can be seen as validating use cases are generally still hard to find.

Checkin

Checkin Platforms Have Paved The Way

While the potential has been in-place for some time, it has only been in the last 6 months that the stage has finally been set for cases of  lift to be demonstrated. By “lift”, I mean proven, incremental sales tied to opt-in location-based marketing campaigns delivered via mobile platforms that leverage the fact that a consumer willingly notified the offer-serving platform they were in physical proximity to the point of sale. We have Fourquare, Gowalla and other “checkin” platforms to thank for this shift, as their success has accelerated consumer and brand awareness (and calmed the hand-wringing “privacy alarm” naysayers).

The Meat Of The Matter

The Meat Of The Matter

While checkins are hip and fun, the real meat of the matter here is in mobile payment systems, offer redemption tracking, and algorithmic “learnings” by the platforms that deliver real, actionable value to consumers.

This is what will get us over the hump, as the offers are not only unintrusive, they are personalized, actionable, and tied to a system that gets smarter over time, based on real consumer redemption/purchase behavior. Pie in the sky? Amazon nailed this years ago and new “customized daily deal” companies like RueLaLa, Living Social and Groupon are out of the gate and growing fast.

On July 14, Mobile Commerce Daily Associate Editor Dan Butcher posted an article that stopped me cold. Titled,“McDonald’s Goes With Near Field Communications For Sales Lift”, it succinctly describes a program that utilizes nearly every ingredient of (what I believe to be) the recipe for a new form of location-based marketing. Dan’s post was covering a July 5 post by Senior Analyst Red Gillen of financial consultancy Celent titled, “A Merchant’s Argument For Mobile Contactless Technology“. Note that the (bold) emphasis is mine, throughout.

Red Gillen

Red Gillen Of Celent

Mr. Gillen researches payment initiatives and visited with McDonald’s in Japan, to discuss mobile technology. He starts off by saying, “..The focus of our discussion was McDonald’s use of mobile technology for sales lift purposes — i.e., as a channel to distribute coupons and special offers, to entice customers into McDonald’s restaurants.”

He is already speaking my language. “Sales lift” is another way of saying incremental purchases and his immediate shift to the importance of using mobile to drive more customers through the retail door struck me. Too many view the “mobile web” as a smaller version of the web and miss the obvious real world implications of being able to walk around, while online, with a device that knows where you are. Coupons are old news but linking Near Field Communication (NFC) as the “mobile technology” behind redemption by a specific customer and, thus, proving that customer was in a specific store at a specific time is not.

He goes on to describe the program in detail by saying, “Customers (now about 18 million of them) register as members of McDonald’s “Toku” promotional program.  On a weekly basis (in time for the weekend), McDonald’s sends program members a mobile e-mail, with a list of coupons and promotions available that week.  Customers then have two choices.  One is to use their mobile browser to open mobile coupons, which are shown to McDonald’s cashiers (a promotional code is clearly visible).  The other, if customers have already downloaded the McDonald’s app (which 8 million have already done), is to download the coupons to their contactless mobile wallet.”

Wow. An opt-in program. Time sensitive offers delivered to a mobile device. Two ways to redeem the coupons. One of them involves mobile NFC payment tied to a downloadable opt-in branded app that serves as a “contactless mobile wallet”. Hmmm.

McDonald's Mobile Coupons

McDonald's Mobile Coupons

Red is just getting warmed up. Remember this is not a pilot or a concept, this is  happening. He goes on to say, “Either way, the customer gains the benefit of the coupon.  However, with the contactless version, there is a special advantage.  Namely, McDonald’s is able to close the loop between coupon distribution and redemption.  By associating redemption patterns with a customer’s “Toku” membership ID number, McDonald’s begins to develop intelligence about that customer’s preferences.  Based on this, McDonald’s is able to configure and send out highly personalized promotions (by menu item, specific restaurant, time of day/week, etc.) to the customer’s mobile phone, which the customer is more likely to redeem. This increasingly tightening marketing loop cannot be achieved with plastic membership cards, nor with mobile browser-based coupons.”

So, the NFC redemption system learns as it goes and is able to generate increasingly personalized time/place/item offers based on real behavior within the application. This is the “walk-by-and-get-an-offer Starbucks Cliche” so often flogged in LBS circles, but it’s real and it’s live now and, apparently, used by 8 million opt-in consumers in Japan, in conjunction with a distinctly American brand that is hardly a fringe player in the quickserve landscape.

The finale is contained in the last paragraph, “Once customers tap their contactless coupons, the data is leveraged to immediately send orders back to the kitchen..This just goes to show that contactless is not just about payments.  In fact, it often isn’t about payments at all..”

 

NFC Contactless Payment and Redemption

Red’s point is that, even though NFC is most-often associated with cash-free payment (for example in mass transit ticketing), the real power of this model is that the system is using the personalized, tracked coupon redemption patterns to learn from the consumer’s behavior in order to both prove increased store visits and sales (lift) and increase efficiency via the speed of the resulting transaction.

I have covered why this is so important for brands to understand in previous posts, but suffice it to say I am excited to finally see the first real examples of companies leveraging the power of tracked, cutting edge mobile LBS technology, while also respecting and harnessing the power of consumer preference.

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Wilson Kerr (@WLLK) is the Founder of Boston-based LBS consulting firm Location Based Strategy, LLC.

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Wilson Kerr (@WLLK) is the Founder of Boston-Based LBS consulting firm Location Based Strategy, LLC. He checks in on the forces shaping location based marketing often and can be reached at Wilson@LBStrategy.com.

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Boston, MA June 10, 2010 – The Mobile Proof Presence (MPOP) checkin game is white-hot and set to explode. In a relatively short amount of time, most people (with an iPhone, at least)  know what a “checkin” is and the most popular checkin platform (Foursquare) is adding 15,000 people daily and rapidly closing in on 2 Million users, stacking up approximately 10 checkins per second, or well-over 1 Million per day.

Broadcasting the details of their location-based interactions with real businesses 3 to 4 times per week, these users are providing Foursquare a stockpile of opt-in mobile metrics. This is no longer a fad. This is real and could finally be the legitimizing  “lift” mobile advertising has long been looking for.

Thanks to checkins, realtime social network updates are no longer just static, general “What’s On Your Mind?” posts. They now convey “What are you doing, where are you, and who are you there with.” While this has certainly been a fast-moving location-based social media phenomenon, the real momentum behind this movement (and the reason to take-note) is not individuals sharing the where/what/who, but something else.

Special Offers Becoming The Focus

 

Increasingly, Foursquare and other checkin platforms allow users to convey, “what special deal they got for being there”. This last crucial element has recently tipped the balance and allowed Mobile Proof of Presence linked to checkins to emerge as THE transformative mobile advertising force to-watch, in record time.

No longer passing out only fun, amusing “digital candy” badges, mayorships, pins, or token drink specials, these platforms are now tapping into the rich vein of actual product-linked incentives offered by well-known brands. In no small way, they are set to finally deliver on the original (largely unrealized) core premise of mobile advertising, by linking consumer behavior and tracked  mobile ROI to an existing, proven formula for increasing sales.

Every consumer-facing business with a cash register, from the smallest single-door to the largest mega retailer, knows that special offers drive lift. Printed coupon fliers, chalkboard nightly restaurant specials, “BOGO” days at the supermarket, seasonal clearance sales, and, most importantly, “punch card” loyalty programs all work. Foursquare takes the incentive programs, coupons and special offers retail businesses have used for decades to drive sales, and straps them to a new, modern opt-in engine that feeds the businesses back real-time location-parsed ROI metrics.

Lucky Magazine Partners For Shopping Specials

At long last, it seems large, well-known brands have finally decided to step around their lethargic and overly cautious agencies and get involved. By all reports, Foursquare and their closest competitor Gowalla are turning down daily inbound proposals from top brands looking to tap into the power of this new way to track lift. Traditional agencies are likely shuddering, and for good reason. Perish the thought that they finally have to step up to this new level of measured return and quantify results! I can just imagine them responding to the brand contact, “What do you mean you want us to run a campaign that tells you how many people acted upon the offer and where and when and how much money you made from your spend“? Heaven forbid.

Foursquare is using Mobile Proof of Presence to finally unlock the Pandora’s box that allows branded locations to run real checkin-based incentive campaigns that reward loyalty, showing them who was in the store or business, when, and what they redeemed as a reward for interacting with the location/brand while there. These metrics can then be tied to increased sales of real products during the time the incentive was offered. Voila! Lift.

This checkin movement is being sped along by a flood of energy and momentum linked to the  long-unrealized potential of mobile marketing, generally. Foursquare, for example, is not so much seeking this as fuel for growth as they are receiving it and serving as a catch basin for this torrent of brands finally able to get metrics empirically linked to real, tracked incremental visits by real people with real money to spend.

Gowalla, Loopt, WHERE, WeReward, and the rest are hot on their heels and there is a lot of loot to spread around. Speaking of loot, Pepsi recently launched their own, branded check-in platform called Pepsi Loot. That’s how hot this space is right now!

 

Pepsi Loot Checkin App

Consider this, Foursquare was founded in March of 2009 and has not yet spent the original $1.35 million they took to get started.  They are still a small, scrappy company that is admittedly barely in control of the tiger they have by the tail. Yes, they have location validation (cheating) issues to address that could cloud metrics and naysayers are squealing about narcissism and privacy. Still, Foursquare is growing larger by the minute and the larger they get, the more likely it is they will perfect the algorithmic tools the big brands have long been looking for.

Also, watch for the big boys (Apple, Google, Nokia, Yahoo, Facebook, etc) to step into this game in a big way, as the realization sinks in that Mobile Proof Of Presence checkin campaigns linked to real incentives tied to products people buy every day might finally be the “lift” mobile marketing has been looking for (and brands are demanding).  They better hurry.

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For an inside look into Foursquare and the forces behind their success, take the time to watch this excellent and revealing video interview with their CEO, Dennis Crowley. BTW, he was just crowned the “King” of social media by Wired Magazine (UK).

Foursquare Potential: CEO Crowned Social Media King

 

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Wilson Kerr (@WLLK) is the Founder of Boston-Based LBS consulting firm Location Based Strategy, LLC. He checks in on the forces shaping location based marketing often and 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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Did your mobile ad campaign drive a consumer to a store that carries your product and can you prove it?

If you can use opt-in consumer behavior to prove that a customer visited a specific retail location and bought a product (and link this to a specific call to action), you are touching the future of mobile marketing. Social network platforms that can effectively capture these “Mobile Proof Of Presence”  (MPOP) metrics,  can offer brands powerful new marketing tools and quantify ROI by linking them to incremental product interactions.. at point of sale.

Lest we forget, companies make money by driving consumers to buy their products, in real stores with real money. Using traditional blanket print/radio/TV advertising for “top of mind”  branding is fine, but new tools allow brands to quantify ad campaigns by tracking incremental store visits, product interactions, and even payment for that product.

Three ways to capture MPOP metrics are: Checkins, QR codes, and NFC. Each has it’s own merits.

Checkins: The Current Craze

Popular “checkin” platforms like Foursquare and Gowalla are proof that consumers will volunteer where they are and what they are doing, for an incentive. By checking in to a specific place, individuals are rewarded with product specials or freebies and broadcast their location to their social networks. The platform that captures this information can use it to build metrics for brands, showing results as incremental traffic to real doors. A downside of checkins is their fad-like meteoric rise and that  unverified rotten checkin apples could spoil the metrics barrel. Foursquare, for example, has had some issues lately with fake checkins. Gowalla validates checkins, by real location.

How much potential is there here? Recent rumors are that Yahoo might buy 1+ year  Foursquare for $100+ Million.

How Do Checkins Work? Watch The Video:

QR Codes: Get Ready!

Quick Response (QR) Codes can be used to verify that someone was at a specific location and capture when that interaction occurred. QR codes are ubiquitous in Japan and taking hold in Europe.

They are easy to implement and serve as a viable “proof of presence” without the requirement that the device knows where it is. This is key..If the QR code is unique to the location, then a physical scan of it verifies a consumer was there.

For print ads, QR codes serve as “real world hyperlinks” to the virtual, online world. A company to watch is Mobile Discovery (video intro), a top provider of QR code campaign creation and management. Please contact me if you would like to learn more about Mobile Discovery or how QR codes can serve as a bridge between real-world point of purchase display or print ads and your mobile/social media campaigns. Get ready, QR codes could be huge!

How Do QR Codes Work? Watch the VIDEO:

NFC: One To Watch

NFC (Near Field Communication) is not new technology and many Americans use NFC every day. Contactless metro cards are the best example. NFC is potentially important for mobile marketing because it can generate MPOP metrics and enable real financial transactions via the device, instantaneously. No opening scanner apps or multi-step checkins. You simply pass your phone over a contactless terminal node and you are done. The downside is that NFC requires a significant investment in retail point of sale hardware and payments will require (messy) Carrier involvement. This is why it has not taken off, to-date.

Major device manufactures like Apple and Nokia are expected to launch NFC equipped smartphones soon, for the US market. Nokia has been doing pioneering work on NFC for many years. The Nokia video below is from 2007! A recently-uncovered Apple patent details “Peer-to-Peer Financial Transaction Devices and Methods”. The new iPhone might have NFC integrated and a payment app on-deck.

How Does NFC Work? Watch the VIDEO:

A Hot New Way To Measure ROI

While trendy checkin platforms dominate the news, be sure to learn the other ways to verify, track and capture all-important MPOP metrics. There is a lot of pressure on mobile advertisers and social network platforms to prove they drove real consumers to real  touchpoints, where  real products are  purchased. As well there should be…

If you want to learn more, contact me. I can help.

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Gowalla and Chevrolet Join Forces, Foursquare Teams With Starbucks

Social networking games are moving from the fringe to the front lines of social media marketing at light speed. Two recent examples are below!

As I have written about for the last few weeks, this is not some fun new promotional tool that brands might want to consider. This is far-more and, I believe, will redefine mobile marketing as we know it. These platforms allow consumer brands, in the context of a controlled campaign management system, to track the actual traffic driven to individual store locations, in real-time. Even more-powerful is that the information conveyed can be tweaked by location, time, region, season, etc and continuous improvement can be fueled by tracked, actual, live mobile consumer interaction with the point of sale locations where real money is exchanged for real goods.

For years, brands have spent time and effort driving mobile consumers to websites not optimized for mobile and mistakenly thinking mobile consumers interact with the mobile web the same way at-home consumers interact with the “regular” web. Forrester reports that, “while 89 % of consumers shop for information about products online, less than 7% of retail sales actually take place online”.

The MMA reports that, “Almost $400 billion of in-store sales..are directly influenced by the web. That number will surpass $1 trillion by 2012”. But these web-influenced in-store purchases are not tracked. This fact is what I call the “ROBO Gap”. Yahoo coined the term ROBO (Research Online Buy Offline) and bridging this “ROBO gap” has massive implications for all online advertising, especially as the world take the web mobile.

It seems a few brands have finally awakened to the reality that mobile consumers want  THE primary component of a mobile campaign to be the locations where they can act upon the messaging they receive.  Social networking game platforms provide the perfect context for this, because opt-in interaction with business locations are the cornerstone of what they do and incentives and rewards are already built-in to the very essence of the platform. Merging in proven, current brand-specific loyalty reward programs tied to real goods that consumers know and love is a slam dunk. Using these platforms to introduce new products is an even better fit. The ideas are endless.

Sign up for Gowalla or Foursquare and get into the game. (Google-funded SCVNGR is another one to-watch). Check out these two examples of brand involvement from the last few days and watch this trend carefully. Super hot.

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From Mashable (3/11/10):

Foursquare and Starbucks Team Up to Offer Customer Rewards

Foursquare means business. The 1-year-old startup now has a huge brand — Starbucks — using its platform to test out an experimental customer rewards program.

Starting today, frequent Starbucks visitors who check in at retail locations using Foursquare will earn customer rewards. Although there’s no financial incentive or free coffee to begin with, customers can unlock the “Barista badge” after five checkins.

Of course that’s just the beginning; the coffee behemoth plans to use Foursquare as a testing ground for alternative reward strategies and to unlock “the pulse of the experience” for each store.

If you think this is a straight-up play to offer location-based mobile coupons, think again. The New York Times Bits Blog writes that the company is “hoping to use Foursquare to provide even more meaningful prizes, like invitations to special events, photo-sharing or online reputation scores.”

As Starbucks figures out how best to leverage the checkin, we have to step back and appreciate the magnitude of this decision. With Starbucks on board, there’s no question that Foursquare has all the tools necessary to appeal to — and reach — a mainstream audience. Plus, now that a second company (the first was Tasti D-Lite) is tapping into Foursquare as a loyalty program platform, the additional proof of concept will pave the way for other businesses to follow suit.

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From SXSW News (3/12/10):

Check in, Tweet, and Leave the Driving to Chevy

chvy.jpg

Arriving in Austin today? Chevrolet is teaming up with Gowalla to hook you up with a ride downtown from Chevy to a select number of Gowalla-users who check in at ABIA between 9am. and 4pm.

Get to the hot spots in style and “Catch a Chevy” during the SXSW Film Festival at Brush Square Park across from the Austin Convention Center, on South Lamar near the Alamo Draft House, and at the Paramount Theatre from March 1–20 from 6 pm–12am.

More Ways to Geek Out:

  • Make your own QR Code stickers to pass out to new and old friends at the Chevy Cruze Trade Show booth March 13–15.
  • Check in with Gowalla as part of a downtown walking trip and receive a special badge that can be redeemed for a special prize at the Chevy Volt Recharge Lounge in the ACC.
  • Take a Chevy for a test spin around downtown Austin anytime between 9am–4pm March 12-20 at the Brush Square Park “Catch a Chevy” spot at 4th and Trinity.

Whenever you or your wireless devices have had enough of the action, stop off at the Chevy Volt Recharge Lounge in the Convention Center to rest and juice up!

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Wilson Kerr (@WLLK) is the founder and principal consultant at Location Based Strategy, LLC. He posted this piece to his blog from a great little Brookline, MA coffee shop and bakery called Athan’s that he’s currently checked-into, on Gowalla. Seriously, check it out.

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Wilson Kerr (@WLLK) is the founder and principal consultant at Location Based Strategy, LLC.

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A recent report by E-Consultancy on the Value Of Social Media, shows some interesting statistics on the level of use of social media by over 400 companies surveyed and the general “experimental” stage most are in, regarding this new way to reach consumers.

Few would argue that there is a big opportunity for companies to take advantage of the myriad of social media marketing options. But this same myriad can be confusing and the options are evolving at a blistering pace. For brands and agencies used to traditional media campaign timelines and planning, it can be daunting to simply keep up with the options available, let alone form a coherent strategy that dovetails with current messaging. Given this, it’s not surprising that few companies have a firm grasp on the subject.

The ROI Problem

A pressing question for those dipping a toe in the social media waters is how to measure ROI. According to the report, “A third of respondents (32%) are getting less than 1x the return on investment from social media.”  The survey summary also states that, “Almost two-thirds of respondents (61%) say their organizations are “poor” (34%) or “very poor” (27%) at measuring ROI.”

Few would argue that the use of social media can drive brand awareness and open exciting new touch-points with consumers, but few social media platforms offer any real metrics for showing brands what the upside for all this work is. Web banner ads, keyword search buys, and mobile ad campaigns all come with metrics and performance elements that allow brands to measure ROI. Social media platforms need to catch up and offer these tools to businesses.

The At-Home Vs. Mobile User Experience Delta

Three quarters of brands (74%) in the survey say they use social media to drive consumers to their website. This is the traditional path and works fine if old fashioned branding is your goal. As such, it’s no surprise that “brand recognition” and “brand reputation” are the second (64%) and third (63%) reasons given for social media marketing participation. For regular at-home website visitors, this is OK, but it does not translate to mobile.

For example, spending some time here at my desk visiting doritos.com and the intense flash media experience found there makes me perhaps a bit more-likely to buy some doritos. In mobile, this is a disaster and simply does not translate. I do not want a branding experience that takes 4 minutes to load on my iphone when I am walking down the street. I do not want to install Flash. I do not want to have to enter my zip code. I want doritos!

My point is that, when a consumer is “out and about”, they behave differently than when they are sitting at home on a fast web connection displayed on a large screen. Most brands do not have mobile optimized sites, let alone a store locator that interfaces with the location awareness of the mobile devices we all carry 16 hours a day. No wonder 74% of companies say they do nothing or have “only experimented” with social media. They need to grasp the implications of the differences between mobile consumer behavior and at-home web browsing, before they dive in.

The Mobile “I Want It Now” Factor

Store locators are what most companies use to promote their locations but, if they are delivered on a standard website to a mobile consumer, the zip code entry interfaces ae clumsy (and the related poor mapping that does not tap into the location-awareness of the mobile device). This, along with the obvious screen size and zoom limitations of most phones, makes these experiences suboptimal for mobile consumers.

Brands need to build a functional place for mobile consumers to “land” and then deliver quick gratification that honors the fact that a highly prequalified consumer that “asked for more” is mobile and wants actionable, location-relevant information. Once built, social media is an excellent way to drive mobile consumers to a site optimized for mobile. The primary goal should be to honor the “I want it now” factor by converting opt-in mobile site visitors to incremental customers, by delivering the locations that carry their products.

“Checking In” To A Brighter Future

It is not a bad thing that companies are moving forward with some trepidation. They can afford to wait a bit, especially as the various social media platforms work on providing analytics and tools that measure the interaction with brand entities. While some platforms have enough traffic to monetise through ads, the smarter play is to tap into the ability to quantify incremental store visits by giving the brands access to a larger store locator within an interface that users know, trust, and want use to share current location information with friends.

The hottest and best example of this is, of course, Social Networking Games. No longer fringe, these hot platforms could solve the ROI problem and are tailored to mobile from the start. The games serve as a social network trojan horse that, for the first time, captures opt-in incremental store visits and makes the process fun, useful and viral. This metric has the potential to solidify into a new ad unit of immense impact, as check-ins are poised to be the new currency of mobile advertising.

Gowalla and Foursquare are the leaders and Foursquare’s recent business tool announcement tips their hand and shows the true potential of these popular platforms. They are, “pioneering a deeper connection between place and patron.” Preloaded on almost every AT&T phone, Ulocate’s WHERE platform is another example. They recently introduced a new “Check-In” feature with their version 3.4.

The mighty Facebook is working on “check-ins” as a direct result of Foursquare and Gowalla’s early leads. This is important because, according to the report,  “Facebook is the Web property mostly commonly used in social media, with 85% of companies using this site as part of their marketing strategy.”

The Tip Of The Iceberg

Mark my words: The social media networking platforms that capture valid, verified check-ins, and deliver the opt-in incremental store visit metrics these check-ins fuel in the right way, are going to be unlocking a very big door.

With 69% of companies spending between $0 and $5K per year on social media, we are just seeing the tip of the iceberg. As Social Media platforms evolve and cater themselves to the businesses that serve as the locations for check-ins and other key realworld interaction elements, brands and their agencies should be able to make better sense of the landscape, and tap into this powerful new marketing resource.

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Wilson Kerr (@WLLK) is dedicated to helping brands and companies harness the power of location and is the founder and principal consultant at Location Based Strategy, LLC.

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