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Locat ion, locat ion, locat ion

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Locat ion, locat ion, locat ion: A pr imer on locat ion-based socia l network market ingEveryone likes “free.” We like it even more if the free product or service offered is

a seriously good deal.

Knowing this simple fact, international clothing retailer, Gap®, gave away 10,000

free pairs of jeans to its U.S. customers on Nov. 5, 2010. The catch? No catch,

really: All one had to do was visit a local Gap store, log in to Facebook’s™ Places

application on a mobile phone, and virtually “check in” to the store’s location.

“Checking in” with a smartphone sends the customer’s

physical location to the Facebook Places application. If the

location matches that of a Gap store, the check in is valid and

a free pair of jeans rewarded. In our opinion, a free pair of

jeans is a pretty worthwhile prize for doing little more than

walking into a Gap location!

On top of the free jean promotion, the company also offered

a 40 percent off coupon via Facebook Places to customers

who checked in to a Gap location after Nov. 5. Additionally,

in August 2010, Gap ran a similar promotion on another

location-based social network (LBSN), Foursquare™, giving a 25 percent discount

to all shoppers who checked in during a given timeframe.1

Gap’s LBSN promotions are a great example of how businesses can harness the

power of geolocation technology to ultimately build awareness, develop a

customer base, boost sales and foster positive word-of-mouth among consumers

and the media.

In this Blue Paper®, we’ll cover the basics of LBSN marketing, including key

statistics, getting started, tying in promotions, measuring results and plenty of

inspirational case studies—just like this one from Gap. LBSNs are a quick-evolving

medium, so let’s get started … and, fast!

How it worksUnderstanding the basic mechanics behind geolocation technology and LBSNs

is critical to brainstorming effective ways to utilize the medium for marketing

purposes. From promotions to rewards, and research to recognition, opportunities

1 Indvik, Lauren. “Checking In to Gap on Facebook Could Get You Free Jeans.” Mashable – The Social Media Guide. 05 Nov. 2010. Web. 14 Dec. 2010. <http://mashable.com/2010/11/05/gap-facebook-places/>.


abound when it comes to putting your customers in the spotlight and boosting

your business’ buzz in the community.

Let’s start with the basics: As touched on in the Gap example above, geolocation

applications operate on the exact location of the user. First, an individual must

create an account on the desired LBSN site. Popular LBSNs you may be familiar

with include:

• BrightKite

• Facebook Places

• Foursquare™

• Gowalla

• Loopt®

• Whrrl

• Yelp!®

(We’ll go into the specifics choosing a network later, don’t worry.)

Once signed up, users can post to their LBSN account when they are physically

present at a company, organization, place, venue, etc. This post is often referred

to as “checking in.” The validity of a check-in is determined by comparing

the exact latitude and longitude of a user’s computer or mobile phone when

the update is made (often referred to as a “geotag”), with a pre-determined

location on an online mapping service. Applications are programmed to do this

automatically. If the user’s geotag matches the location he or she claims to be at,

the check-in is valid.

After users check in, an update is posted to their account profile on the chosen

LBSN. This allows other LBSN contacts to see where their friends are and where

they’ve been. If users so choose, they can also link their LBSN profile to other

social accounts, such as Twitter™, Facebook or LinkedInSM, to share location

updates with multiple online social networks. Twitter itself also supports

geolocation technology within its micro-blogging platform, automatically

attaching a user’s physical location to each tweet—if he or she opts in, of course.

There are oodles of Web-based and mobile LBSNs and related applications out

there that utilize geolocation technology to perform various activities. According

to the New York Times’ Small-Business Guide to Geolocation Services, LBSNs can

play many roles for consumers and businesses alike:

“They offer customer-relationship tools, rewards programs, social

networks, games, business directories, city guidebooks and review

sites. They help businesses present coupons, reward loyal clientele


and gather valuable data about customers.2”

With potential uses aplenty, let’s keep it simple. From here on out, we’ll focus on

the most popular use of geolocation technology: LBSN marketing and promotions

that relate specifically to individual check-in behavior.

Demographic ins ightNow that we’ve established a foundational understanding of how geolocation

technology, LBSNs and related applications work, let’s view the data to get a

clearer picture of who is using these applications and for what purpose(s).

Although geolocation technology and LBSN marketing may be garnering a lot

of buzz in the tech sphere and attracting large corporations, the data doesn’t

lie: They are not yet widely used in the general population. According to leading

independent research organization Forrester®, as of July 2010, only 4 percent

of U.S. online adults surveyed had ever used a LBSN application on their mobile

phones. Of those that do use them, only 1 percent do so more than once per

week.3

Other interesting demographic findings from Forrester’s study, Location-based

Social Networks: A Hint of Mobile Engagement Emerges, include:

• Users are young, male and well-educated—traits typically

associated with the early-adopter demographic.

• Users are 38 percent more likely than online adults to say

friends and family ask their opinion before making a

purchase decision.

• Roughly 14-20 percent of users are more likely to check their

cell phones before making big purchases.4

So, what about intent? According to a July 2010 study by Webroot, an online

security solutions provider, the primary motivations for using geolocation

applications include:5

• To get informed about an individual, business, product or service

2 Pattison, Kermit. “Geolocation Services: Find a Smartphone, Find a Customer.” The New York Times Online. 06 Oct. 2010. Web. 14 Dec. 2010. <http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html>.

3 “Forrester: Location-Based Social Network Users Influential, Few” MarketingProfs. 29 July 2010. Web. 14 Dec. 2010. <http://www.marketingprofs.com/charts/2010/3808/forrester-location-based-social-network-users-influential-few>.

4 “Forrester: Location-Based Social Network Users Influential, Few” MarketingProfs. 29 July 2010. Web. 14 Dec. 2010. <http://www.marketingprofs.com/charts/2010/3808/forrester-location-based-social-network-users-influential-few>.

5 “Webroot Survey Finds Geolocation Apps Prevalent Amongst Mobile Device Users, But 55% Concerned About Loss of Privacy” Webroot. 13 July 2010. Web. 14 Dec. 2010. <http://pr.webroot.com/threat-research/cons/social-networks-mobile-security-071310.html>.


(67 percent)

• To meet up with friends (43 percent)

• To meet new people (13.9 percent)

• To play related competitive games (8.7 percent)

Knowing these key demographic insights, it is wise to perform a detailed analysis

of your current target audience(s) prior to undertaking any LBSN marketing

effort. After all, we want it to work for you! Many other organizations have

found success with geolocation-based marketing tactics, putting in the due

diligence research to determine feasible strategies and objectives. We’ll talk more

about getting started in LBSN marketing next.

Gett ing startedLBSNs, like other online social networks, offer many marketing opportunities at

a relatively low cost, as compared to more traditional marketing efforts. It’s all

about how you utilize the medium that determines ultimate success.

That being said, don’t assume that geolocation marketing is just for large

corporations—it works for nonprofit organizations and small businesses, too!

There may be less resources available at smaller shops, but there are also less

decision makers. This shortens the lead time between ideas to strategy to

implementation, which is an important benefit in the ever-changing, fast-paced

world of social media.

New York-based design and marketing agency HyQuality media identifies an easy-

to-follow framework to get started in LBSN marketing—for both small businesses

and larger companies. Using their foundation, we’ve outlined the first steps

to building a solid campaign.

Step 1: Choose a LBSN, and get registered.

Choosing the right LBSN should begin with an analysis of your target

audience’s online media preferences. Ask the questions: Where are my

customers online? What social networks are they most active on? Do they

use location-based social networking sites? The answers will determine which

LBSN you should build your campaign around.

We mentioned a few of the most popular networks previously, which is a great

list to start with. If you are low on time or resources to perform a full research

analysis, consider going with one of the most widely used networks: Foursquare.

Currently, Foursquare adds 25,000 new users per day, topping out at more than


5 million total users across multiple platforms.6 Additionally, it boasts 1.4 million

business listings, which means you’ll be in good company with other savvy

professionals who can serve as marketing inspiration.

That being said, a word to the wise when choosing your LBSN: We believe that,

in the near future, it won’t matter a ton which one you select. Why? Because

as of December 2010, some LBSNs are already allowing users to share check-in

information with other networks. So, say a user checks in to your business using

Gowalla, but also has a Foursquare account. He or she can link the two, so that

only one check-in is needed, but both networks populate with the check-in

information.7 This is a win-win for businesses who may be concentrating their

efforts on only one network; they’ll get a bigger bang for their buck,

putting in less effort by maintaining a singular account.

Once you’ve chosen your network, navigate to the site and register

your company or organization as a place that users can check in to. For

example, if you’ve chosen Foursquare as your location-based network of

choice, you can register your business and learn more about features at

www.Foursquare.com/Businesses.

Step 2: Set goals.

The goals for your campaign will determine the entire scope of your efforts.

What do you want to achieve by marketing to individuals via a LBSN? Asking

this question, in addition to those outlined below, will serve as a springboard for

flushing out your concrete goals and objectives.

• Do you want to attract new customers?

• Is customer retention important?

• Do you want to gather better data about your customers?8

• Do you want to boost awareness of your organization, products

or services?

• Do you want to foster and reward brand loyalty?

• Do you want to supplement current marketing efforts?

Establishing your goals and objectives is critical to ensuring your tactical

implementation is worthwhile. For example, if your goal is new customer

acquisition, you may end up following the lead of Pacific Catch, a San Francisco,

Calif.-based seafood restaurant chain. When Foursquare users come within three

6 Ankeny, Jason. “Foursquare Adding 25,000 New Users Daily” FierceMobileContent. 09 Dec. 2010. Web. 14 Dec. 2010. <http://www.fiercemobilecontent.com/story/foursquare-adding-25000-new-users-daily/2010-12-09>.

7 Johnson, James. “Gowalla’s Newest Update Is Foursquare.” The Blog Herald. 02 Dec. 2010. Web. 14 Dec. 2010. <http://www.blogherald.com/2010/12/02/gowallas-newest-update-foursquare/>.



blocks of Pacific Catch, a special offer appears on their smartphone for a free

menu item, rewarded after five check-ins. According to Pacific Catch, such offers

have boosted the chain’s traffic, inciting more than 1,400 people to check in to its

three locations, more than 2,800 times.9

Step 3: Identify Incentives and/or promotions.

One of the most successful marketing tactics to use in conjunction with LBSNs is

offering incentives or a special promotion for certain check-in behavior.

In Step 3, identify what you will offer and what behavior(s) it will depend on.

How will your promotion generate appreciation, awareness, sales or other goals?

In a recent blog post, Communications Strategist Cheryl Harrison briefly outlines

eight nifty ways to use geolocation applications in conjunction with promotions.

You may have come across some before, whereas others may serve as marketing

inspiration. You can check out the full post here (complete with examples). We’ve

outlined and expanded on her tips below:10

1. Use it as a loyalty card—A discount or promotion is given for every

“x” number of check-ins, similar to the paper version of a punch

card. This is how Pacific Catch used it with new customers—a free

appetizer after five check-ins.

2. Use it as an upgrade mechanism—Give a free add-on to a current

service or product purchase, simply for checking in.

3. Use it to boost traffic on slow days or special days—Business Insider

elaborates on this promotion idea, sharing an example from Butter

Lane, a cupcake shop that boosted morning sales by offering a free

cupcake to the first 10 people to check in each day. This promotion

has paid off, as they’ve seen a significant sales increase since starting

such deals. 11 If you’re launching a new product or service, holding

a special event or offering a slam-bang sale, take Butter Lane’s lead

and consider rewarding those who check in during the specified

time or date.

4. Use it as an incentive for first-timers—Operating a LBSN mobile

application to check in to a place for the first time can be a bit

daunting. Who will see my update, and will anyone care? Ease the

trepidation by offering a great first-timer perk. Brainstorm rewards

that are low-risk to you but have high impact to your customers.

5. Use it as an incentive for repeat visitors—Many businesses reward


10 Harrison, Cheryl. “Good Idea: 8 Foursquare Promotion Ideas for Businesses.” Being Cheryl. 15 Apr. 2010. Web. 14 Dec. 2010. <http://beingcheryl.com/social-media/8-foursquare-promotion-ideas-for-businesses/>.

11 Male, Bianca. “How To Use Foursquare To Boost Sales At Your Retail Business.” Business Insider. 26 Mar. 2010. Web. 14 Dec. 2010. <http://www.businessinsider.com/how-to-use-foursquare-to-boost-business-2010-3#>.


their most “loyal” customer (the individual with the most check-ins)

during a given period of time. This super-user is often referred to in

LBSN language as the location’s “mayor,” and is many times entitled

to special promotions such as unique freebies, deep discounts or

public recognition. Whether it’s your top customer or a group of

frequent visitors, rewarding these connected individuals will spread

positive word of mouth to other potential and current customers, as

well as stir up a little friendly competition to reach the coveted top

spots!

6. Use it as an incentive for bringing friends—Consider giving perks

when a user checks in with more than one person. This is the

idea behind Foursquare’s current “swarm badge”—a game-piece

graphic, shaped as a badge, awarded to users who check in to a

place with 50 or more other users at the same time. Consider scaling

the idea down for your business to make the promotion more

attainable when starting out.

7. Use it as a vehicle to access exclusive goods—Entice people to check

in to your organization by offering something exclusive, such as a

special entrée, special seats, new product sample, etc.

8. Use it as an added-value to partners—Let’ say you’re holding a

conference with sponsors. Harrison recommends offering attendees

a percentage off their admission fee if they check in to all sponsor

booths at the conference. We’ll go into a great case study from

Cisco™ a bit later, where they used LBSN marketing to boost live

conference attendance.

Step 4: Set up the deal.

Once you know what promotion you’d like to offer and what behavior it’s

based on, it’s time to set up the deal within the LBSN.

Each network operates a bit differently, but generally, most LBSNs offer a set

of promotion options similar to Foursquare’s, as outlined below. Choose the

one that best fits what you’re trying to offer, then tweak your promotion as

necessary to fit network specifications. Deals, promotions and specials can be

set up via the administrator function of your business account.

Foursquare special types:

• Mayor Specials: unlocked only by the Mayor of your venue.

• Check-in Specials: unlocked when a user checks in to your venue “x”

amount of total times.

• Frequency-based Specials: unlocked every “x” amount of check-ins.

• Wildcard Specials: always unlocked, but your staff has to verify some


extra conditions before awarding the Special.12

Step 5: Cross-pollinate.

You’ve completed all necessary set-up steps. Kudos! Now, it’s time to get the

word out.

If you’ve decided to tackle LBSN marketing, you’re already marketing your

business in other media—both online and off. Weave your LBSN presence into

other media to spread the word and build buzz about your promotion(s). Remind

users to check in on direct mailers, print ads, your website, other social networks

and beyond. As geolocation technology and LBSN use are still in their

infancy, the more awareness you can bring to your efforts, the better.13

Another great tactic, as instructed by HyQuality Media, is to establish

hefty “signage” at your physical location and within other online

locations. If you’re on Foursquare, free window clings are offered to all

business, simply for registering. Additionally, you may want to create

a graphic call-out image to use on your website, blog and other social

networks that links to your LBSN place profile and/or the promotion

description.

Danny Brown, social strategist at Bonsai Interactive, offers another idea for

tying online platforms together in a more relevant way. He advises to keep the

connection path going after a user checks in and receives a deal:

“When you set up a reward for your Foursquare users, why not show the

message, ‘Thanks for checking in! Why not friend us on Facebook too, and

download your exclusive code for Facebook-only offers?’ Not only does this

strengthen the relationship with you, [but] you’re [also] offering a great

call-to-action to grow your Facebook page while giving your customer

even easier ways to make a purchase with you.”14

Cross-promoting your geolocation marketing campaign efforts with other

organizational endeavors will only increase the amount of awareness and, in turn,

ultimate customer participation.

Measure, analyze and tweakOne of the final, and ongoing, phases of managing your LBSN marketing

12 “Foursquare + Your Business.” Foursquare. Web. 14 Dec. 2010. <http://foursquare.com/businesses/>.13 “Get Started With Geolocation Marketing.” HyQuality Media. 05 Aug. 2010. Web. 14 Dec. 2010.

<http://hyquality.com/get-started-with-geolocation-marketing>.14 Brown, Danny. “Geo-Location Marketing.” Spin Sucks. Bonsai Interactive, 22 July 2010. Web. 14 Dec. 2010.

<http://www.spinsucks.com/social-media/geo-location-marketing/>.


campaign is measurement. Thankfully, most geolocation networks have a built-

in measurement dashboard for business accounts that shares plenty of helpful

insights that can assist in assessing the current success of a campaign, or how it

should be tweaked to further achieve objectives.

For example, take LBSN giant, Foursquare. When a business sets up its account

on the site, it immediately gains access to the following information about

individuals who are checking in to the organization’s location(s):

• Most recent visitors

• Most frequent visitors

• The time of day people check in

• Total number of unique visitors

• Histogram of check-ins per day

• Gender breakdown of customers

• Portion of foursquare check-ins broadcast to Twitter and Facebook15

Such information can help organizations analyze specific elements of their

marketing campaign. Take The New York-based destination for example. Bar

partner Dan Maccarone realized, based on his company account’s Foursquare

data, that bar check-ins declined after 2 a.m. on Saturdays. To battle this

downward trend, Maccarone and his team implemented a “late night happy

hour,” and spread the word through various social channels.

According to Maccarone, as told to the New York Times, a rise in check-ins

followed. Speaking of the importance of analytics, he states, “I look at the

Foursquare check-ins as a representation, like Nielsen ratings. You can tell a lot

about your audience based on the breakdown of the people who are checking in

because they are a good sample set of your regular customer base.”16

Case in point: Geolocat ion market ing + eventsYou may be thinking that, sure, this all sounds interesting and peachy-

keen for B2C business models. But, what about B2B? Is there any use for

geolocation marketing in our realm of the business world?

The answer, in one word: Absolutely. One great place to start, where the path

is already a bit trodden, is with using LBSN applications in conjunction with an

event. Take the lead from the Cisco Live 2010 event planning team. They wanted

to find new ways to drive traffic to the live event, increase participation and

15 “Foursquare + Your Business.” Foursquare. Web. 14 Dec. 2010. <http://foursquare.com/businesses/>.16 Pattison, Kermit. “Geolocation Services: Find a Smartphone, Find a Customer.” The New York Times Online. 06

Oct. 2010. Web. 14 Dec. 2010. <http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html>.


attract a new audience segment that was not their typical market.17 Ultimately, the

team decided that harnessing the power of geolocation technology with the help

of LBSN Foursquare could contribute to achieving these goals. According to its

blog post recapping the event, here’s what they did:18

“Cisco Live Las Vegas 2010 leveraged Foursquare for a physical attendee

scavenger hunt. Each day, a clue was provided through a social media

channel for the Foursquare check-in location of that day. The first 75

people to check-in to the Foursquare location and show the designated

representative that they had checked-in and completed any associated

social media task, received a colored Cisco Live button unique for that

game day”.

Then, attendees who received buttons—or, “badges,” as Foursquare calls them—

could redeem them for prizes at the end of each day. In addition to benefitting

attendees by delivering prizes for participating, Cisco Live’s Foursquare game

boosted the company’s social media traffic as well, triggering 802 check-ins during

the conference!

Using a similar model as Cisco Live, spend some time brainstorming how can you

push the envelope on marketing and executing your next big event. Or, how can

you creatively apply the same model to a whole different arena? For example,

think of taking Cisco’s lead and applying it to the world of post-secondary

education. Students and faculty can unlock special badges for visiting certain

areas of the campus, be rewarded for uncovering secret places or given incentives

for group studying. All it takes is a little ingenuity and brainstorming to see the

LBSN possibilities.

Case in point: Check- in reward partnershipsAlthough LBSN rewards primarily coincide with physical location check-ins at this

point in time, change is on the way. In mid-November 2010, Fousquare announced

a pilot program that will reward users for behavior, rather than a physical

location. The program, launched in partnership with international beverage

company, PepsiCo™, and Los Angeles-based grocery chain, Vons, is based on

Vons’ existing loyalty card program, linking users’ Vons loyalty cards with their

Foursquare accounts.

Now, here’s how the reward part is different than the usual model: Once PepsiCo

17 Neiger, Petra. “Never Stop Experimenting: Pushing the B2B Event Envelope with Geo-Location.” A Digital Marketer’s Guide. 14 Oct. 2010. Web. 14 Dec. 2010. <http://petra1400.blogspot.com/2010/10/never-stop-experimenting-pushing-b2b.html>.

18 Veal, Dannette. “Expand Your Virtual Horizon.” Cisco Blog. 22 July 2010. Web. 14 Dec. 2010. <http://blogs.cisco.com/virtualworlds/expand_your_virtual_horizon/>.


has access to a consumer’s Vons rewards-card information, the company can

then offer beverage reward coupons based on behavior. For example, when a

consumer checks in to the gym enough times and earns a “Gymrat” game-piece

badge on Foursquare, he or she may be rewarded by PepsiCo with a Vons coupon

redeemable toward a six-pack of nutritional supplement drinks.

The beauty of it all is that such a rewards program allows PepsiCo, a B2B

manufacturer of consumer goods, to participate in the geolocation check-in game

and provide rewards, without having a physical location. Not to mention, it drives

Vons’ business, and gives both companies access to customer data never before

obtained or correlated in this manner.

“Our goal is to learn how location will ultimately drive human behavior,” says

Bonin Bough, director of PepsiCo Digital and Social Media. “We know the

opportunity is massive, so this is about digital R&D: What’s working? How do you

turn consumer insight into more engagement? How will these behavior triggers

ultimately tie into a bigger strategy?”19

LBSN Evolut ionPepsico and Vons’ partnership is a great example of where the future of location-

based social network marketing is headed. But, it doesn’t stop there. Bonsai

Interactive’s Brown predicts even further cross-promotion and partnership to

occur between various social platforms as time goes on.

Why? He believes that, by their very nature, people like to mix-and-match items

to make the complete package, as long as they save money in the long run. We

may go to one store for a pair of pants, another for a shirt and yet another for

the shoes. Brown recommends taking this logic and applying it to the future of

geolocation marketing, using the following example:

• John Doe goes to the movie theatre to see the new Batman movie.

Once there, he checks in, and writes an accompanying note to state

that he’s there to see the new Batman movie.

• The movie theatre is partnering with a local comic book store. After

the movie is through, there’s a Foursquare update alert from the

comic book store on John’s phone, offering a special promotion for

10 percent off all Batman purchases for a set period of time.

• The movie theatre is also partnering with a local chicken wings

restaurant. After the movie is through, there’s also an alert from

19 Carr, Austin. “Exclusive: Foursquare’s New Partnership With PepsiCo Takes Focus Off of Places.” Fast Company. 18 Nov. 2010. Web. 14 Dec. 2010. <http://www.fastcompany.com/1703807/exclusive-foursquare-partners-with-

pepsi-unveils-linked-loyalty-rewards-accounts-facebook-pl>.


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the restaurant on John’s phone, offering a two-for-one deal on “bat

wings,” for the remainder of the week.20

Based on Brown’s logic, possibilities are indeed endless when it comes to using

geolocation technology as a foundation to effectively market relevant products,

services, specials and promotions to very targeted audiences on LBSNs. Hopefully,

this Blue Paper has managed to break the ice for your organization’s geolocation

marketing efforts and showcase that the sky truly is the limit when it comes

to LBSN marketing. Now, if your head isn’t spinning too much, it’s time to stop

reading and get to doing … your future mayor awaits!

20 Brown, Danny. “Geo-Location Marketing.” Spin Sucks. Bonsai Interactive, 22 July 2010. Web. 14 Dec. 2010. <http://www.spinsucks.com/social-media/geo-location-marketing/>.

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