Foursquare a game? You may be missing the whole point

I’m on a plane flying from client meetings in Seattle to attend SxSWi in Austin. When I get there, I’m going to check in on Foursquare and Gowalla. Probably Loopt, too. Maybe I’ll break out my old Brightkite ID (probably not though) or look for restaurant reviews on Yelp. And I’ll use them to see where my friends are–from which panels they’re going to, to (much more importantly) which of the parties they’re attending.Foursquare analytics

In doing so, I’ll earn stamps in my passport (Gowalla) and badges (Foursquare). I’ll be offered specials at local restaurants, and I’ll have chances to win real prizes for checking in (since these services are running promos in town for the event), although I doubt I’ll be able to become mayor of anywhere during the visit (also Foursquare).

So clearly, location-based services like these are functional (helping me find and connect with friends during a conference) and fun (deposing a friend as mayor of a local establishment is a kick).

But that’s not the big picture

Location-based services/games/review sites that offer check-ins are part of a much bigger picture than most people realize. They’re also about very powerful, very personalized marketing. This is “Minority Report” type stuff, here, only now the cacophony of digital displays shouting at Tom Cruise has been replaced by just one: our phones.

And I’m actively giving them all the data they need to market to me.

It’s about massive data collection and processing

Check in enough, and suddenly the marketers know my habits. They know if I like Starbucks, or bar food, or books. They know if I’m an early bird or a night owl. When i travel from one city to the next, they’re going to be able to tell me where I can get that coffee, that bar food, that book. And it’s going to be based on what I already do–the types of places I frequent and when I frequent them. Throw in some coupons or specials, and I’m hooked.

For years, I’ve worked with a program called PRIZM that segments billions and billions of records to let marketers figure out that people that buy product X are 16% more likely to watch TV show Y, for example. I always thought it was the most powerful marketing data ever collected. But this trumps it. That data is in the aggregate and uses old info to project future actions on a population. Location-based data is completely personalized, and can be acted on at the very moment you most need it.

Should you be concerned?

When marketers get data, people typically get nervous. But in this case (assuming the location-based companies themselves are ethical), I don’t think so. If you have to go to a clinic to treat a particularly embarrassing medical condition, nobody makes you check-in on Foursquare. You don’t need to be the mayor of the local STD clinic, for example. (And if you become it, you can now resign. I’d suggest you do so.)

But the reason that Facebook and Twitter are both making serious moves to join these start-ups is because this is potentially the most powerful marketing ever created.

Marketing isn’t annoying. Marketing is only annoying when you don’t want the product. When you’re actively in the market for something (from a meal to an HDTV), marketing is great. It educates you. It saves you money. Ads become your friends. Location-based services may do much of that even better than ever.

So who will win the battle?

I’m not sure. What I am sure of is that by next year I won’t be checking in on 3 tools at once. There will be winners and losers and it’s going to be ugly for the next 18 months. I’m not sure if Foursquare is Twitter and Gowalla is Plurk [LINK], or vice versa. I’m not sure Facebook will trounce the upstarts, or if they’ll be clunky (as Google has been with Buzz, for example).

But the real winner is the one that does this:

  • makes it fun enough to the end users to make us want to check in;
  • makes the sharing of location functional, but not creepy;
  • gets the back-end analytics and recommendation engines serve both businesses and the user. (Nobody’s done this yet. Foursquare’s new dashboard, pictured above, is a small step, but there are miles to go yet.)

I’ve talked to the folks at Foursquare a bit, and they’re pretty darn smart. So my bet is on Foursquare. I think nimble start-ups are best at winning new categories (that’s why we built Ignite the way we did). But there’s a lot of time left in this game, so I’m not willing to bet a lot just yet. Whether I ultimately win or lose that bet, it’s going to be exciting to watch.

Thoughts? Who are you betting on?

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6 Comments
  • janetkennedy
    Posted at 16:00h, 12 March

    I found the #pleaserobme attachment to these “games” to be especially disturbing since I was one of the targets.

  • Jim Tobin
    Posted at 16:04h, 12 March

    I hear you, Janet. I think that’s gotten a decent amount of attention, but I think almost nobody will be actually robbed (I sure hope you weren’t), but all of us who are “playing” will be sharing data for marketing.

    This doesn’t bother me. I think it can be very helpful. But it is interesting and worth understanding.

  • Mike J.
    Posted at 17:09h, 12 March

    I believe you are right, the combination of social media and a form of reality gaming, is the biggest trend right now. What is funny about it though, most gaming companies also missed out on this trend, see http://www.mycitycrawler.com/topics/video-gaming … which goes to show that things are changing so fast that what is hot today will be gone tomorrow. We have been working closely with mobile technology for the last year or so and found one thing to be true, it will change how we market from this day forth. This is the beginning of Web 3.0…

    “MoJo”
    http://www.myclubcrawler.com

  • Chaalz
    Posted at 22:47h, 12 March

    “What I am sure of is that by next year I won’t be checking in on 3 tools at once.”
    When I read that I blurted out loud, “yea you will be clicking on a Google page”. Prob because:
    1. Google is in the ad business
    2. The love for Google Buzz is fading (a little?)
    3. very unscientifically, the number of buzzes I receive is now down to 1 per day (from 10)

    Makes me wonder what things would look like if all these small companies team up instead of going it alone.

  • Lani Rosales
    Posted at 17:08h, 21 March

    Jim, I have to side with Gowalla for a few reasons:

    1. The new release of Gowalla (2.0) introduced threaded comments and photos making their service more relevant and useful and makes others appear like nothing more than darts thrown on a map.

    2. Gowalla offers an *experience* much like a passport, appealing to the human side of checking in- it’s not just fun, it’s an actual memorable experience which is more than I can say for what I’ve seen of others (especially Loopt).

    3. Gowalla is aesthetically pleasing. Hear me out on this one. They have a massive team of designers creating custom stickers, etc. for locations and they are consistent, high quality images that if they printed out real stickers of, I’d actually put on my laptop cover (which currently has zero stickers; I’m anti-sticker). They’re just that beautiful. This may seem trivial to some, but for those of us who appreciate aesthetics, it is important. How many clients have we all had that we’ve had to take back to square on their design before their campaigns can even begin because they’ve been so hideous?
    ____

    PS: Jim, it was great meeting you at Molotov in Austin, sorry it’s taken so long to be active in comments! 🙂

  • @joel_hughes
    Posted at 18:54h, 01 April

    Great article, very thought provoking..

    Personally I think location based services such as Foursquare (when tied to rewards/loyalty & incentive schemes) will be MASSIVE news…for a start the general public will “get it” a lot quicker than Twitter as they understand “what’s in it for them”.

    Hi Lani,
    great comments:
    1) “threaded comments” – I think it’s important to not over egg the pudding – think of how successful Twitter is when the core platform is actually quite simple (in terms of functionality) and has not evolved very much. By keeping the core platform of Foursquare simple and by allowing full API access (which Gowalla currently do not) they allow third party application to augment the base with additional apps. If people find these thirds party apps useful then great – if not then at least Foursquare have not polluted their core platform with unnecessary decoration.

    2) This sounds like Gowalla have got a nice dimension here but I do have a similar experience when I checkin via the app on my Blackberry. The message which comes back is not simply “you’ve checked in” but I get my points. Furthermore the act of checking in may have trigged a badge. And further, furthermore(!) none of this is in light of how venues can react to my checking in, the concept of specials etc.

    3) Yeah, I can kinda see what you mean here but I have to say that I LIKE how Foursquare looks – it has a sort of disco retro feel 🙂 Yeah some of the badges looked like I’ve drawn them (not food!) but, going back to what I said earlier, I think the game REALLY begins when venues get fuller access and then can create their own badges etc.

    Perhaps it will be a blood bath as the big players fight it out; and with Facebook supposedly entering the arena next month and Twitter yet to play it’s hand the big players have yet to stir. Or perhaps there is room for a range of tools; personally I’m less interested in the gaming aspect – I want the social aspect, I want to discover places and I want the opportunity to be rewarded (real world rewards!) for my spending habits.

    @Joel_Hughes

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