location-based mobile marketing

Why Foursquare is Toast!

I am not entirely convinced that I agree with the commentary below but it definitely gives you food for thought about the future of location-based mobile marketing.

“ Foursquare, the leading independent location-based social network, cannot survive because it lacks scale, context, committed constituents and a compelling customer experience.  The purchase of Gowalla by Facebook, signals the beginning of the end for one-trick ponies like Foursquare.

Foursquare is a case study in rapid growth but unrealized potential. In spite of growing from 2 to 15 million total users since July 2010, recent research from Forrester indicates that only 30 percent of Internet users are aware of the category called location-based services.  A mere 6 percent actually have used them. And just two percent are active weekly users.

Three-quarters of Foursquare members are 23-45 year old early adopters, 73 percent men and 37 percent women, who are twice as likely to share product information, promotion codes, coupons, discounts, offers and their results from online games. And while sharing might be caring, the numbers are very low and the ability to track and measure this marketing potential are very fuzzy.

As a proud member of the active 2 percent, who connects his Foursquare account with Facebook, Twitter and LinkedIn, I can tell you that the customer experience is bewildering. You check in. Each time you check in, you get a different number of points benchmarked against different set of friends. Points are awarded with each check-in but they never seem to accumulate. Nobody knows what the points mean or what to do with them. Similarly I’ve earned a bunch of badges, whose names are forgettable and purpose indiscernible.

Reaction to my frequent check-ins, from my social networks, range from validation or criticism of my restaurant selections, to occasional tips about out of town destinations to mild irritation about why my friends might care where I am and what I’m doing.

From a marketing standpoint Foursquare could be empowering local merchants, pushing out timely geo-based offers, rewarding frequent store visits, enhancing the in-store experience and connecting or cueing friends in nearby vicinities. But they haven’t really got traction on these prospects from either merchants or customers. There has been some big brand experimentation but no significant campaigns on a regional or national scale.

Location-based marketing will not go away. But pure play LBS providers like Foursquare will disappear as the geo-social functionality gets wrapped into larger contexts and subsumed in e-commerce, m-commerce and f-commerce functionalities.”

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