Twitter and Foursquare fanatics have been happily broadcasting their whereabouts for years, but how can brands act on that information?
Certainly not easily, perhaps until now. Adman-turned-serial-entrepreneur Nihal Mehta is launching a company, LocalResponse, to allow marketers to message consumers via Twitter based on where they say they are or what they're saying in social media. So far, 10 marketers have signed on to use the platform, including Coca-Cola for energy-drink Powerade Zero.
A major telecom will be using the tool to automatically message consumers about its TV service (hint), but only after they've turned to Twitter to complain about a competitor's outages or bad service, said Mr. Mehta. Coca-Cola declined to provide specifics on its program just yet.
"We're seeing a lot of brands want to look at sentiment from the Twitter firehose," Mr. Mehta said, referring to the entire file of data some buy from Twitter on a monthly basis. "So we're listening for negative sentiment about a competitor and targeting a message to convert them." Other brands are using the tool to cross-sell and up-sell customers that tweet about them or to reward loyaltywhen users' check-in to certain types of stores.
Outside of just isolating tweets about competitors, Local Response has built algorithms to listen to Twitter, Foursquare, Instagram, Flickr and other social-media services with public data feeds for location cues. The tool can pick out both explicit check-ins from apps like Foursquare and implicit ones, where language signals location without a formal check-in, like tweeting "leaving" "working at," or "near," Mr. Mehta said.
LocalResponse has found that 80% of all "check-ins" on Twitter are from natural language, while 5% are from Foursquare. From all the services combined, LocalResponse can analyze posts from 200 million users globally. For one ad buyer, that scale is the startup's biggest asset.
"Did you know that on Black Friday last year Target got fewer than 20,000 Foursquare check-ins?" said Jeff Flemings, senior-VP of social Starcom MediaVest North America, via email. He is working with Powerade on its campaign. "It's symbolic of the niche quality that has dogged location-based services to date, despite all the hoopla."
LocalResponse is generating revenue from day one, says Mr. Mehta, who sold the mobile agency he founded, Ipsh, to Omnicom Group in 2005. Brands are charged costs-per-click, while local-businesses can use the basic tool to talk to their customers for free, but will eventually have to pay a monthly subscription. LocalResponse launched last month as a customer-relationship management tool for local businesses.
So far, Local Response has $5.5 million in funding; $4 million from Mr. Mehta's previous startup Buzzd, the location-based app and city guide that set the stage for LocalResponse. He's since raised an additional $1.5 million for LocalResponse from investors including Verizon Ventures and Charles River Ventures.
Once an advertiser selects the filters to isolate the people it wants to message, LocalResponse sends out a brand-approved reply automatically -- say, 10% off your first six months of cable.
While LocalResponse listens to a number of social media services, it can only message consumers back on Twitter for now. Once other services like Foursquare or Flickr have standard ways to insert a brand message, LocalResponse is looking to bring advertisers into those venues, too.
As it's so reliant on the platform, Mr. Mehta said he has Twitter's blessing for the project. In the past, Twitter has shut down some third-party apps or services that make money off its platform.
"People inside Twitter are saying we're monetizing Twitter better than they are," Mr. Mehta said. Twitter may soon resell the tool to its own advertisers, since a partnership is in the works.
For consumers, though, unannounced tweets may drag brands inton tricky territory. Who's to say it's not creepy to get a link to a coupon directly after you tweeed about that soda?
"We've all received at-message spam before, the difference here is that it's coming from a business or brand you've already expressed interest in," said Mr. Mehta.