Location Based Services

Location Based Services (LBS) or Check-In Services like foursquare or Gowalla gained fans rapidly in line with the huge increase in mobile internet usage.

For many smartphone owners, location based services are already unthinkable to live without. They check into their current location to inform their friends where they are. They play GPS-games, or they use LB-services to exchange information and experiences about shops, clubs or sights and to get special deals.

Very important for businesses: they can present targeted location based advertising to these busy users!

How do you advertise virtually and location-based?

Just sending SMS to people who happen to be walking past does not work. Location Based Advertising needs a medium, just like an ad in the paper.

A large part of LBS are check-in services, which those potential customers are already using. The unbeatable advantage as opposed to advertising papers: the company doesn’t pay anything for publishing its ad! Only when customers pay money for certain deals will they need to pay a commission. For promotions as in Foursquare there is currently no cost at all.

Great reasons especially for smaller shops to become familiar with this new medium!

Symbiotic effects with foursquare

Foursquare makes it absolutely plain: „Whether you’re a national chain, a mom-and-pop shop, or anywhere in between, you can attract new customers or reward your most loyal ones by offering foursquare Specials – mobile coupons, prizes or discounts – which are presented to users when they check in at or near your venue.”

The tools provided are (as of yet) free. This is because the users are drawn in by the deals offered by businesses, which in turn increases foursquare’s range – a win-win situation.

The great advantage of advertising this way is that with very simple things – e.g. a piece of cake for every tenth checked-in visit at the café at the corner – you don’t just win a single customer, but also his friends and acquaintances who are members of foursquare! To get this piece of cake as a patronage reward, the user must check in every time, which is automatically communicated to his friends. The user who checks in the most at one place will become its virtual mayor and can get even more special deals.

This causes a much greater promotional effect for the participating business than the standard tactics of trading stamps and the like. The user numbers of foursquare reached 10 million worldwide in June 2011 and keep rising.

The development goes on, foursquare specials push onto phone screens proactively now: users who are walking past a gym or a shop can now be offered a discount if they decide right then at that moment. Besides this, they can also find special deals from home, too.

Gowalla evaluates and advertises

Gowalla works similar to foursquare, but states to be „much more than checking in“ . It is a kind of social travel guide or city magazine. Users collect digital souvenirs and stamps which can be exchanged for “awards” from real businesses. Additionally, users can write reviews of places they visit.

If you want to advertise here, you can buy an individual, virtual travel stamp for visitors. You should definitely edit your business details and add a greeting or promotion.  Making an effort can pay out, because the best reviewed places get extra advertising by Gowalla. You can also have your events promoted here.

Groupon goes location based

The discount-service Groupon has been offering deals on national and local level for quite a while. With Groupon Now (so far only available in the US) it has stepped into mobile LBS. The difference to the other services: a user doesn’t need to check in. By pressing either of the two buttons “I’m hungry” or “I’m bored“ , he’ll be shown deals nearby. These are only offered for a short time like an hour instead of days and so are predicted to lead to a high rate of impulse buying. For this service, Groupon teams up with Foursquare.

Facebook Places is into sales

So far, only businesses within the USA can sign up, but with Places Facebook plans to take its share in the field of check-in services. It works less game oriented but instead totally focused on special deals and the social element.

Users also check into locations and post their special  check-in-deals directly to their Facebook wall. To get these deals, they are forced to tag friends in these posts and will through this have much larger ranges than is  currently possible within the comparatively small foursquare circle. There is not much information regarding the cost which participating businesses will face, but it is to be expected that Facebook will keep a percentage of the deal proceeds, similar to their social games.

An exact overview useful to businesses about the mentioned and other services and their functions can be found at socialfresh.com.  Attention: the data used in this post refers mainly to the US-American market!

Even if some services are so far only available in the US, they are worth to keep an eye on. Because sooner or later they are going to start in Germany and Europe, and then you should be part of them to have the edge over competition.

Why Location Based Advertising works

„If you grab the opportunity right here and now, you’ll get something really great for very cheap!” This is the gist of all Location Based Deals. The customer is already or almost in the shop and doesn’t sit at home, leafing through ad papers. This impulse buying done by new customers boosts turnover.

Add to that the game element within foursquare and Gowalla. Collecting medals or becoming mayor of a location and getting something for free this way is more than enough for many people to check in at your place.

The advertising effect goes even further, since the user doesn’t just talk about these deals and freebies by chance and word of mouth, but systematically publishes them in his entire circle of friends or fellow players. Your business’s level of familiarity rapidly increases through this kind of range. No ad paper will ever cause this effect!

For which businesses is Location Based Advertising worth pursuing?

Taking part in check-in services is free of charge, a fee needs to be paid only when special deals are actually sold.

This is why this advertising channel can be recommended to pretty much all retail shops and locations. Fashion outlets, gyms, restaurants and cafés are predestined for these kinds of service. Deals should be priced as advantageously as possible, but always with the commission in mind or planned so that customers will purchase additional items.

Even if you don’t intend to promote yourself actively, you should get involved with these services and at least keep your business profile up to date. Solely by doing this you can do a lot of promotion – for absolutely free!

Location Based Services are definitely a trend that should not be missed!