Is Geo-Social Big Business or Big Buzz?
The hot buzz words this year have been location-based social media, geo-location, and geo-social. Whatever jargon you want to use to define geo-social applications like Foursquare, Gowalla, or Loopt, these applications are way hot and all the buzz around the internet. But, I want to make a point: hot doesn’t necessarily translate into your business making money.
Let’s look at the most popular geo-social application right now: Foursquare. You can read anywhere just how popular it is (5 Ways Foursquare is Changing the World, The Rise of Foursquare in Numbers [STATS], and Foursquare Adds Almost 100000 Users in 10 Days). But businesses need to look past the hype and see if there are real returns to be made before investing in marketing and promoting these applications.
For example, I read some stats on actual users of Foursquare in top US cities in an article entitled “5 Things You Need to Know About Location-Based Social Media.” Based on information provided in the graph below, only .16% of native and social savvy New Yorkers use Foursquare. And cities on the West Coast who boast all the big tech savvy firms? San Francisco and Los Angeles are the same with only .16% of the population using it. If big cities such as New York, Los Angeles, and San Francisco aren’t even getting that big of a reach with these apps, what chance would a smaller, less tech savvy city have in using it to bring in business?
Now, I would still like to say that I LOVE Foursquare and think it could be a wonderful addition to any businesses marketing or social media mix. BUT, I have concluded that two things must be in place for a business to actually realize any returns from it.
1. It must be actively promoted by your business
If you are a restaurant or small retailer, you must have someone on your staff devoted to making sure your patrons are aware that your business recognizes Foursquare users and even offers discounts or rewards to “mayors” or visitors who check-in.
2. You business patrons must be using it!
Since Foursquare is not completely mainstream or understood by the average consumer, your business must make efforts to explain the service, how one could “check-in” using their smartphone, or what incentives they could receive by checking in. Additionally, if your consumers don’t typically use smartphones then how will you reach them using Foursquare? You can’t. Furthermore, why would you take the time to use Foursquare if it doesn’t reach your target audience? I know is hard for some tech-savvy fanatics and marketing contributors to believe, but there are still many consumers just using their mobile devices to make calls and not for geo-social networking. Case in point - the table above.
Enough of my rant, please prove me wrong and share your success stories. I would love nothing more than to believe and share with my readers that Foursquare and geo-social apps have really grown as much as it is buzzed about and businesses in tech savvy cities and non-savvy cities have been able to not only reach a large audience, but realize returns. Let’s be modest and say a good reach is 10% of a businesses target audience/patrons and a good realized return is an increase in total sales of at least 10%.
Update May 13, 2010: Just a couple articles that have been published since this post to support my belief.
Why Hasn’t Location Reached the Mainstream Yet?
Think Everyone Has a Smartphone? Think Again
Tags: geo-social