Forrester: Why Most Marketers Should Forgo Foursquare
Report Finds That Only 4% of Online Adults Use Location-Based Services
The report could also be a wake-up call for social media on mobile phones, especially when comparing the location services to the last social-media darling, Twitter. The micro-blogging service reports 35% of its 125 million registered users are in the U.S. and only a fraction of that number accesses Twitter via mobile. In April, Twitter said 37% of its usage comes via mobile clients. Apply that percentage to U.S. tweeters -- we must extrapolate because the company does not break out U.S. users via mobile specifically -- and the 16 million Americans using Twitter via mobile is about comparable to the location-apps audience in total.
Almost 80% of location-based service users are male. Close to 70% of them are between the ages of 19 and 35, and 70% have college degrees or higher. Forrester also found these location-app users to be influential (the report finds they're 38% more likely to say friends and family ask their opinions before a purchase) and they are especially receptive to mobile coupons and offers. This set is up to 20% more likely to consult their phones before a purchase, and are far more likely to research products and services and read customer reviews.
This small audience is still attractive to some marketers. Forrester recommends that gaming, consumer electronics and sportswear marketers lead the way with testing these apps. Location apps have already proved they're not only for male-oriented brands. PepsiCo, Starbucks, Oil of Olay, Bravo and, most recently, Campbell's Soup have all launched campaigns with location apps.
Forrester analyst Melissa Parrish believes that male-oriented brands should forge the way and other marketers should hang back until these apps get bigger audiences. To date, Foursquare has more than 2 million users; Loopt 4 million and MyTown 2.5 million. Scale could come to the category if digital behemoths such as Facebook, Google and Twitter, which have already made moves toward location services, develop their own products.
This is an incredibly short-sighted view.
Step back for a sec, take a breath, and look at it thru the lens of "I'm in a marketing organization with big sales goals but very very limited resources so where should i be prioritizing my investments?" and you might see that Forrester's recos on LBS are helpful.
We're talking about bleeding-edge tools here - the true leading edge of the marketing wedge. It takes time for new tools like these to get adopted.
For now, location-based tools probably aren't the place for most companies to market. However, it does make sense for some companies to experiment (as Forrester suggests), as long as they go into it with the knowledge that the returns at this stage are likely to be minimal. In doing so, they get to learn their lessons early on, before the masses adopt the tools.
No one should deny that location is an important element for marketing to mobile consumers. Mobile consumers are on the go and looking to make decisions in realtime. However, why should I have to join another entire social network to tell my Facebook friends that I'm going to Starbucks. The value just isn't adding up for consumers outside of NY, LA and Silicon valley.
Foursquare and others will need a better value proposition if they expect to achieve mass adoption. Even so, there are plenty of opportunities for brands with smart and creative people.
A good article:
http://www.imediaconnection.com/content/26969.asp
Marketers will have to look at the LBS as a architectural platform like branded communities are to Facebook. Branded LB apps will be the norm, where dashboards are owned by the brand and the Foursquares et.al are just channels like other SN's are today.
http://www.trioutnc.com is a superb example. Betting they have more reach than Foursquare in the golden triangle.
The innovative marketers will jump on board, get the jump on the big guys, and establish themselves in the mobile space at bargain prices. And if you believe the report, they'll be establishing themselves with thought leaders!
That's what happened with radio, TV, and cable. No reason to believe the pattern won't be repeated.
Yes, the 4Sq thing is fun like a treasure-hunt on a Saturday afternoon, but at the end of the day the mission produces something of questionable value to most people that I have encountered.
I've actually watched people try to redeem goodies in their local Starbucks store and quite often they come off looking sheepish, embarrassed and somewhat awkward because the establishment or staff don't really know how to handle these redemptions. Who want's stand in line continually explaining why you are entitled to something worth just a few bucks?
I had a conversation with one thirty-something guy, and he admitted that whilst it seemed fair game to redeem his "hard-earned prize", in the end he felt cheap spending too much energy justifying his 'entitlement'. It's not frictionless.
What gets interesting here is how far the likes of Starbucks will run with these gimmicky routines. Their marketing is exceptional, their brand exemplary, and they protect it staunchly. I'm just not sure that it makes brand sense for Starbucks to be associating itself with quests for virtual medals; deciphering which majors are real and which are impersonators, and bearing the brunt of difficult a difficult redemption process. This is not what their brand is all about.
Social media is great, and we all must experiment, but which organization wants to tarnish their brand by looking cheap, because it seems that's the way some consumers are starting to feel.
I think the Forrester Report is right in some regard but only within the essence of time that these sorts of apps have been used, in a little while, this will (slowly but)surely change
Regardless of how large Foursquare is today, Marketers shouldn't asses the value of a medium by how much attention they can buy with it but rather by how much value they can generate on behalf of their brands in the lives of their audience. Whether it be through utility (promotions and incentives), entertainment (geo-local content) or cultural relevance (branded badges) the question should not be whether to use Foursquare, but how.
Check out how we used Foursquare for Domino's UK here (hyperlink to http://mashable.com/2010/05/26/dominos-uk-foursquare-special/)
Vexed Digital
http://www.vexeddigital.com/
gITnoticed® Marketing | http://www.gitnoticed.com
Claiming and monitoring your listings is an easy first step and one that can help you decide for yourself when and how to leverage these platforms to resonate with your consumers.
If you can see a use for Foursquare that will benefit your customers then go ahead, but be aware of its limitations and demographics and make sure you're not throwing money away on a campaign that may not go anywhere if you're targeting the wrong crowd.
I always advice businesses to check and see what the use is in their area. Here in Detroit, there are enough people using it that, for the right kind of business, it can make sense as part of their marketing mix. And that's part of the key. It has to just be a part of the marketing mix, you can't put a majority of your efforts into it.
As for the women/men part. I understand why women might not want to have people know where they are - I've talked to some of my female friends about this who are considering using Foursquare. However, my own small sampling of 125 connections has about 40% female.
Here's a recent post I wrote on the subject of can this work for your business: http://bit.ly/doAvc4
http://www.quisenblog.com
If marketers listened to Forrester back in the early 90s, no one would have websites!
http://mashable.com/2010/07/27/cardstar-foursquare-integration/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Mashable+%28Mashable%29
Fast forward to the late 1990s, when Forrester came out with at least one report on premium services that I can remember in which they flatly stated that no more than 1% of Internet users would *ever* pay for premium content or services because the Internet wants to be free. A year later a company I was working with found that 6% of families w/children under 18 were already subscribing to one or more premium services online, by 2002, 14% of families were doing so, and another 21% said they were planning to do so in the coming year; today I would venture to guess that most Americans pay for some kind of online premium service. I haven't followed Forrester much since then, but does anyone else see a pattern?
One is that the 4% number of online adults who have used LBS platforms is a national number. In early adopter tech cities like Boulder, CO, where I live, there are definitely a higher percentage of overall users and of female users. So a local marketing campaign could get good traction from an LBS campaign in specific local or regional markets.
Another point is that the research mentions that the 19-35 year old males who are using Foursquare, Loopt and Gowalla are influencers. So even though they are a small minority of tech pioneers, they probably have have strong word of mouth habits that are worth tapping into depending on who you're trying to reach.
These points aside, LBS is the simply new hot thing that marketers are focused on. Just like we've been hearing for 3 or 4 years now that mobile computing is about to be the next big trend while the majority of cell phone users still don't have smart phones, it will take longer for LBS to go mainstream than the trend setters predict.
I got to go now and check-in at the pub.
www.xtify.com
-bob sacco
And, its affordable, why would you forego something so easy, fun and affordable?
I think you can even build campaigns around it like this one --http://www.theurbanhunt.com
http://www.leylaruinseverything.com
Perhaps the premise should have been "if you're a follower, only willing to invest marketing dollars once a platform has reached a half-a-billion followers, then stay away from location-based services."
The function of location social media should be enough to spark creative thinking, and excitement, in any progressive marketer. Here are customers willing to shout to their friends where they are, how frequently they visit, and give tips. As several have stated, the failure is on the marketers' part not substantially rewarding the loyal to build buzz.
It's a powerful idea that is still percolating. But waiting to see "if digital behemoths such as Facebook, Google and Twitter" develop their own is what some were saying about Twitter in its infancy.
Think about it; a failed test right now won't hurt as bad as it would if you were to fail with a larger audience later down the road. And, what we can learn right now will be invaluable later. We could all sit back and wait... but then the service won't grow AND remind me... what are we waiting for? Even if we are only reaching a couple million users, find that niche and reach them – if it makes sense for you, because it won't for everyone. I don't think brands should be doing it just to do it, but for those that it makes sense for, I think they should be excited about the possibilities of location networks like Foursquare and Whrrl – and should be working to figure it out now.
I get it though. Right now it may not seem "worth it" when you're reaching such a small user base, but I strongly believe that this will take off eventually - we just need to jump the location sharing hurtle. Right now it seems like the Millennial's are moving these services forward, but the next generation will bring it to the masses. I know one report won't discourage everyone, and I'm excited to see this space grow and evolve.
Like the majority of the commenters, I think this is incredibly short-sighted. Mobile is the next giant area for growth (in the world, no less). Phones are getting "smarter," and soon there will be enough smartphone users to launch LBS in a more widespread manner. For now, stick to the early adopters and make them your brand ambassadors.
Very few companies have learned how to use Foursquare, and even less know how to monetize it. It goes far beyond just rewarding the mayor, and they'll soon learn that. I say continue to market with Foursquare and let them come to you. It will happen.
Tom Miesen
@tmiesen
See more at www.avocatech.com/blog/index.php