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Is Foursquare a Waste of Time? – Plus Infographic

Social media networks sometimes seem a bit schizophrenic.

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They are both a place to play and socialize and increasingly they are also where you can market your business.Is Foursquare a Waste of Time - Plus Infographic

Facebook was never meant to be a social network to create a brand page and collect tens millions of fans that is now common place with the global brands such as Coca Cola.

Twitter started off as a private messaging technology that was not designed to be a social network.

Some social networks such as LinkedIn were purpose built from day one to provide a networking portal for business people.

Games have a significant presence on social networks and are a significant revenue driver. It is reported that social games on Facebook such as Farmville and Mafia Wars generate up to 30% of Facebook’s revenue.

The Rise of Location Based Social Apps

The development and rapid growth of the GPS enabled smartphone technology has enabled location based social apps such as Foursquare to become a force in social networking.

Foursquare is a location based social networking app and website for mobile devices. Users can check-in with their mobile phones. Each check-in awards the user points

The current numbers for location based apps are significant and at the end of 2011 Foursquare revealed  the following

  • 15 million registered users
  • 1 billion checkins
  • Announced US nationwide partnerships with American Express
  • 600,000 merchants
  • 170 million API calls per day

These numbers do indicate that it is obtaining some critical mass (mainly in the USA). This is vital for Foursquare as it requires significant numbers and scale to be meaningful  for major brands.

The Competitors

The competitors in this space include Loopt with 5 million users (which is more a journaling app rather than a game), MyTown with 4.5 million users (which utilizes the Google Maps API) and initially Facebook places.

Facebook “Places” that was initially offered as a separate feature in 2010, has since been integrated into Facebook as an “Add to Map” button. This is in line with Facebook’s strategy of making location a core part of its product, not a separate check-in feature as it initially debuted.

This will assist Facebook in providing more finite accurate data over time for its database that it will use in geo-targeting down to a postcode level for its Facebook self serve advertising feature.

Facebook paid marketing will then become useful for local businesses who need to target their local area and suburb not just an entire city.

Is it a Waste of Time?

Turning a game into a meaningful commerce platform that benefits retailers and B2C store fronts is what will make it a success in the future. It will also need a large participating community that connects consumers and retailers

Foursquare has been trialed by McDonald’s which saw it drive a significant increase in check-ins (33%) on the day it offered 100 gift cards to Foursquare users who checked into one of McDonald’s 14,000 stores. It must be noted that this was not necessarily foot traffic.

Smaller retailers have run some pilots with mixed success. Some case studies as mentioned on the Clickz.con blog are a sample of maybe what works and doesn’t.

These included

1. Two Golden Corral Restaurants which had tepid results that didn’t encourage them to take an initial trial any further.

2. A Foursquare campaign by the AJ Bombers Burger joint increased sales by 110% on a normally quiet Sunday.

3. Green Cape wine shop offered a 10% discount on high end wines to those who checked-in

According to research from Applied Predictive Technologies (a software company that provides data and analytics to some of the biggest retailers and restaurants in the world, including Starbucks, Staples and Subway), so far have had a minimal impact on businesses. The senior VP, Jonathon Marek puts the revenue bump from a successful campaign on Foursquare and other location based services at the 2% mark.

Maybe the American Express partnership will prove to be a hit over time as they partner with Foursquare to increase use of its credit cards.

Is Foursquare a waste of time

Source: Foursquare

What About You

Would you rather use other social networks and marketing to promote your company or organisation.

Do you think it would be a better use of resources, time and money to use Facebook and Google Adwords to assist your business with geo-targeted marketing.

Have you found Foursquare useful for your business or heard of any successful case studies?

Looking forward to hearing your stories.

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