The Next Bonanza: Location, Location, Location

Posted by Sheila Shayon on August 25, 2010 03:00 PM

Now that Facebook has entered the location-based services market, "places" – and the information generated by users about those places – is the next digital bonanza.

What to do with all that geo-data? Comedian Stephen Colbert has his ideas. Brand marketers, meanwhile, are eager to reward users for recommendations.

According to Gigaom's Mathew Ingram, the next digital leap forward is for first-generation services like Foursquare "to effectively make social decisions easier." As for which service to go with? Decisions, decisions...

Two services are already making decisions a little easier and a lot more crowdsourced: The Hotlist and

Launched in March with $800,000 from angel investors, The Hotlist has already logged 3 million events that their users plan to attend at over one million worldwide locations. Targeting college students, it aggregates information from users’ social networks through Facebook’s Places API, pulling in data from social graphs, location-based tweets and Yelp reviews and enabling users to share future plans.

Flickr cofounder Caterina Fake's offers Hunch Local, polling users’ social data on Facebook or Twitter, but layiering on a series of questions to add ‘hunches’ about locations you might like based on your answers.

The advertising opportunities inherent in this next generation of LBS services are exponential, and offering daily rewards to consumers is an integral component.

Yipit cofounder Vinicius Vacanti shared his thoughts with Business Insider on how brands can get in on Groupon place-based deals:

1. Daily Deals are a reward to your audience, *not* an advertisement.
Creating a daily deal for your audience isn’t just a monetization strategy, it truly is an awesome service you’re doing on their behalf. It’s imperative that you position it this way to your audience and think of it this way internally.
2. How to introduce the Daily Deal to Your Audience: Provide substantial data about your community: how many people; top purchase choices; negotiated discount; time-sensitive offer.
3. Use Your Authority: Make it clear to your community why ‘this is a good deal,’ and vet your offerings via your team and your users’ choices.
4. Give Your Audience a Sense of Exclusivity
5. Daily Deals Can Be More than Revenue: Promote longer-term relationships through additional discounts to frequent users, offer deal-sharing, encourage/incent visitors to create accounts.
6. Partnering is Tricky: This offers good and bad options. Bad includes: embedding services like Groupon and co-branded daily deal services. Good includes: white-labeled daily deal services with hosted technology solutions and sell-in capability; or figure out the technology and sales yourself; acquire an existing daily deal site – there are 120-plus to choose from.

Media brands are perfectly poised, he argues, to jump on the LBS and Daily Deal bandwagon. According to Vacanti, media players already experimenting with this include the Washington Post, SF Gate, BuzzFeed, Zagat, Open Table, Yelp, and Gilt Groupe.

The race is on for the next digital frontier in LBS, and the territorial imperative is clear: worthwhile rewards, recommendations with integrity, and germane marketing.


Jon United States says:

I couldn't agree more.  Location has been talked about for 15 years, but it's finally here.  Brands are going to have a field day as they figure out how to improve their merchandise over the top of the brick and mortar distribution (retailer).  The mobile device is the perfect channel for this.  People have an intimate if not co-dependent relationship with their phone and there's an implied trust factor there.  The challenge will be getting the messaging and the timing right so that the trust can be leveraged and not destroyed.

August 26, 2010 09:31 AM #

Jon United States says:

meant to say "...improve their merchandising..."  The phone will allow the brands to bring their products out of the dark corners -- the places that shoppers don't see or discover easily as they browse through stores.

August 26, 2010 09:35 AM #

S. Shayon says:

Any further thoughts on how brands can 'get the message and timing right'?
S. Shayon

August 26, 2010 10:26 AM #

Jon United States says:

Both are interesting challenges.  Brands spend billions to create awareness and educate consumers on why to pick them over the competitor.  Unfortunately little can be done to affect this decision at the point of decision.  It often comes down to name recognition, packaging, premium positioning on the shelf and the cost per unit.  Tide is a great example of a brand where education is paramount.  Go to their website to see how they educate the consumer on the "volume of water" in their product versus the competition and why that affects the product performance. At the end of the day how many people see this message versus pick the brand that sells for $0.25 less per ounce?  What's the consumers appetite for content at the point of decision?  What's the best way to provide meaningful differentiation at the point of decision?  This is a new horizon.  

The other challenge will be pricing.  Brands don't want to get into a discounting battle with themselves.  This brings up the question of personalization, understanding personal buying history, and weighing that against privacy concerns.  I am a big proponent of convenience.  Making it easy for me to re-order the same products (e.g., AmazonFresh, is powerful eCommerce feature.  How do we emulate and empower the brands and the retailers to do the same?

These next few years are going to be very exciting as both brands and retailers trial new techniques.  

August 26, 2010 03:01 PM #

S. Shayon says:

With virtually 'untethered' digital reach to consumers, seems this is indeed the crux: "how to provide meaningful differentiation at the point of decision?" - when often impulse takes over and all warm-up to POS is irrelevant!
Thanks for your answers.

August 26, 2010 05:14 PM #

David United States says:

Its happening ! The only spot on the landscape is user fatigue if they sign up to too many of these services. Of course the winners will be the companies that deliver the best deals to their user base with consistency and integrity.
Game on !

August 26, 2010 03:04 PM #

S. Shayon says:

...and pacing. You're right - too much influx 24/7 could be a problem - although most deals have to be 'opted in...' We'll have to find a new mobile LBS metric of when enough is enough in this new game.
Thanks, David.

August 26, 2010 05:30 PM #

Comments are closed

elsewhere on brandchannel

1 2 3 4 5 6 7 8 9
brandcameo2014 Product Placement Awards
Apple loses its crown to a new #1
Coca-ColaIt's the Journey That Matters:
Coca-Cola Opens Up With Story-Based Web Refresh
debateJoin the Debate
Is product placement a waste of money?
Arthur Chinski and Joshua Mizrahi
Model Behavior? Brands Beware
U.S. Legal Changes Impact Use of Brand Ambassadors
paperCorporate Citizenship in Canada
Fresh thinking from Interbrand
Sheryl Connelly
Sheryl Connelly

Meet Ford's Resident Futurist
Highlighting the Present—and Future—of Branding in Latin America and Iberia