We’ve heard a lot over the last few months about the explosion of location-based services (LBS). From Foursquare and Gowalla to the lesser known Loopt and BrightKite, agencies, media buyers and brands are all trying to understand how to best use them. And now the behemoth – Facebook has entered the fray!
With over 100 million active mobile users, Facebook appears to be on the way to building a mobile ad network.
We recently learned that McDonald’s, as an article in AdAge indicates, is building an app with Facebook that would allow users to check in at one of its restaurants and have a featured product appear in the post, such as an Angus Quarter Pounder. Enough check-ins and you may qualify for a free burger or fries!
My question, is why not tie this into the free nation-wide WiFi they recently announced? They could even allow users to authenticate onto the WiFi network using Facebook Connect.
This is just one example of how the concept of “checking-in” at a specific location is starting to be rewarded or converted to a loyalty program.
Pepsico recently announced preliminary plans around a Foursqaure program. The basic idea is that they want to sell their products to customers when they are near a grocery store, restaurant or gas station.
The system provides live information about when and where people are shopping and their proximity to a retail partner that carries Pepsi’s products. When a Foursquare user is near a Pepsi retailer, an offer to enroll that person in a Pepsi rewards system will appear. Once enrolled, whenever they check in at a retailer selling Pepsi product they will accumulate rewards points or badges to later redeem for product or offers or donate to charity.
For brands like Pepsi that typically rely heavily on their retail partners to drive product sales, they now have a way to engage directly with the consumer.
So how big is this market anyway?
A recent study by Juniper Research says that nearly 1.5 billion people will be using LBS by 2014, with a global market worth $12.7bn worldwide.
Will consumers be receptive to offers from these brands? The answer appears to be turning favourable.
Mobile audience media company JiWire’s Q1 2010 collected data from 2000 users across 289,000 US wi-fi locations, finding that 53% of users would be happy to share their current location on a mobile device to receive relevant advertising. Two-thirds of those surveyed also said that they frequently use apps on their smartphones that require them to set a location in order to receive other content, and 76% of those users are leaning much closer towards ad-supported free apps rather than paid-for services.
So, the message for brands is simple – LBS are here now, and growing quickly. If you’re seeking ways to engage directly with consumers, be it though an app or a service, get with your agency and figure out a strategy for your company today.