Location-Based Marketing: The Convergence of Social and Mobile

For so many years now, we’ve been hearing that this year is the “Year of Mobile.” Without giving away my age too much, I use to sell cellular phones back when they were big Motorola bag phones. Even back then, the hype around those years being the “Year of Mobile” was heard. Needless to say, we’ve come a long way since bag phones and the once popular flip phone models of old. Back then, the thought of accessing the Internet directly from a mobile phone was something of Star Trek wonderment. Now, I’ve got a Star Trek tricorder app for my phone.

Smartphones are becoming a way of life. For many of us, if we lose our phones, it’s like a lifeline has been cut. How do we communicate with our social world? How do we let our friends know what’s going on with our lives? How do we find out vital information? The thought of booting up the laptop or running to a desktop by this point seems archaic.

While we still have a long way to go for adoption rates to pick up in the United States, in our now ever-present global society, other parts of the world use their smartphones as second nature. Seventy-five percent of mobile subscribers in Japan are connected media users, and adoption rates in the U.K., Spain, and Italy have all surpassed the U.S. in adoption, according to comScore’s “The 2010 Mobile Year in Review” report.


This presents some significant opportunities for social engagement between companies and community members. While most location-based marketing services that interact with mobile devices such as Facebook Places and Foursquare aren’t exactly mainstream, they are seeing tremendous growth. For marketers wanting to be where the market is trending, mobile and social is definitely a place to keep a keen eye on. Yet, there are some hurdles that marketers need to keep in mind when planning strategies that engage consumers in this converged area of marketing.

According to a report from The Location Based Marketing Association and Social-Loco Conference, there’s an apparent disconnect between early adopters, what people are talking about online in regards to smartphone apps, and how the rest of the U.S. population perceives these types of services.

People are talking about Groupon online; over 50 percent of the conversation revolves around this “couponing” phenom, followed by 29 percent of the conversation around Foursquare, and only 2 percent about Facebook Places. Early adopters not only discuss these apps but embrace them: 30 percent use Groupon, 22 percent use Foursquare, and a whopping 90 percent use Facebook Places. In contrast, only 6 percent of mass consumers who aren’t using the apps would consider using Foursquare, 40 percent would consider using Groupon, and 55 percent would use Facebook Places.

People love to talk about these new “shiny objects,” but there are reasons why they haven’t appealed to the mass public yet, and there are lessons to be learned from those reasons for marketers wanting to engage their audience in this social-mobile marketing environment. Eighty-three percent of those surveyed were non-users of social location apps, and here are their reasons for not embracing these technologies like early adopters do:

  • 50 percent don’t own a smartphone
  • 49 percent had no motivation to use the app (“There’s nothing in it for me!”)
  • 48 percent had privacy concerns (these apps tell your network where you’re at)

Experts have surmised that the reason Facebook Places has such a high adoption rate isn’t because early adopters want to check in, but because they are already using Facebook through the app and it’s not “another download” that has to take place. However, this doesn’t address the fact that the system itself doesn’t “reward” its users like Foursquare does with mayorships and badges.

When people get something in return for engaging with an entity, they talk about it. With Groupon, you’re getting a “great deal” and you want to share that with your network, and when Foursquare merchants reward check-ins with coupons (on top of the badges and mayorships), there’s a definite answer to the “What’s in it for me?” question.

While location-based marketing isn’t hitting the mainstream audiences this year, it’s likely that in the next two years, you’ll see this type of consumer engagement become part of everyday marketing efforts. Especially when people are already interacting with national brands (63 percent) and users are sharing what they do online with small businesses (63 percent) via their smartphone apps. While 2011 won’t be the year of mobile, it’s certainly wise for any marketer to keep an eye on ways to engage their consumers in this new platform.

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