Marketers Stay Put With Smaller Location-Based Apps

As Facebook Tries to Ramp Up Its Own Entry, Brands Show No Signs of Abandoning Foursquare, Gowalla and the Gang

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NEW YORK ( -- Those who call Facebook's new location feature a "Foursquare killer" might not want to speak so soon. Instead, a check in with advertisers reveals the brands that have embraced the space are sticking with location-based apps that made check-ins chic in the first place.

At least three brands -- Ford Motor, General Motors and PepsiCo -- all maintain they are no less likely to consider them for location programs, despite existing and "significant" relationships with Facebook. "I don't think there's anyone 'more attractive'; we're not looking at it that way," said Bonin Bough, PepsiCo's global director of digital and social media.


Focuses on travel. National Geographic and Washington Post are joining with Gowalla to offer unique content.

Continues to roll out content programs with publishers and brands. Has a substantial base of local businesses.

Founded in 2005, Brightkite launched its first big brand program this month for Starbucks with branded badges.

This Monopoly-like game lets users buy real estate by checking in to real-life locations. Has so far only inked small sponsorship deals with brands such as Pinkberry.

Loopt will be launching a service for retailers who can use the app for loyalty-reward programs.

Facebook has the size advantage, at 450 million users to Foursquare's 1.2 million and Gowalla's 250,000. But these existing players have an attraction due to their lean influencer communities, game play and standing experience with brands -- not to mention their first-mover advantage that might give the little guys a chance against social networking's 800-pound gorilla.

Moreover, Facebook's privacy problem could be a stumbling block for some like Ford. "People will first have to take a hard look at Facebook's approach to privacy, which may make this new geo-location irrelevant," said Scott Monty, Ford Motor Co.'s global digital and multimedia communications manager.

"It's not exactly the right time for Facebook to ask users to share any more data on their network," said Augie Ray, social-computing analyst at Forrester.

Three groups
To date, location-based startups fall into three loose buckets: social apps such as Foursquare, Gowalla and Buzzd that are tied to discovering restaurants, bars and other meeting places; gaming apps such as MyTown; and shopping apps such as Shopkick and Loopt that will release mobile check-in programs for retailers in coming weeks. Even Twitter and Google Latitude have launched geo-tagged tweets and a location-based social network, respectively.

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Marketers are salivating over location-based mobile apps thanks to their potential to connect brands with offline sales. Mostly recently, Brightkite teamed up with Starbucks; Gowalla with National Geographic; and, thanks to the buzz generated by companies like Foursquare, Facebook was able to sign a global big spender like McDonald's to a program before the feature even went live. Last week, it inked a deal with NBC's "Today Show" giving it exposure beyond its early-adopter base. Users who check in at Rockefeller Plaza or the show's Toyota Concert Series will receive rewards like custom badges.

Facebook's plans for location are not yet clear, but the new feature does appear to include geo-tagged status messages and an API where developers -- including the location-based apps -- could build geo-services on top of its platform. TechCrunch reports the service will be called "Places," though Facebook would not confirm or provide further detail.

For Mr. Bough, the Foursquare experience is enough to keep Pepsi with the startup, for now. "They are the early pioneers and they have a unique knowledge base that is not going to be replicated by new entrants, at least not anytime soon," he said. Plus, with Pepsi's massive scale and global distribution, the platform's size is less of an issue. "We can help these platforms scale," he said. "If the content is good enough, we can help make it big. Location is so new; we need nothing but smart folks working with us."

Then there are the users. Though the startups' millions-strong audience can't stack up to Facebook's users, they are a desirable demographic. "If you are a brand that hasn't been considered leading edge or hip, it's a great way to become relevant to an extremely attractive audience," said Christopher Barger, General Motors Co.'s director-social media, who tested the automaker's first mobile social program with Gowalla in March.

Where it counts
But some remain skeptical about how these programs -- beyond their PR value -- will affect a marketer's bottom line. "We have to prove we can be more than cool and sexy; we have to prove we can move product on the same scale as Google or traditional media," said Justin Siegel, CEO-cofounder of the mobile social network MocoSpace.

"For truly mass-market products like McDonald's, I don't think there's any question on which platform you should advertise on," said Gabe Zichermann, CEO of mobile social startup BeamMe and author of "Game-based Marketing." "If you're looking for an influencer crowd, Foursquare is still an attractive platform."

So far, that value proposition differs by app for both users and advertisers. Next week, Loopt is expected to launch a loyalty-card app, where users can redeem check-ins for rewards with its brand partners. Gowalla has positioned itself as a travel app (its badges are called "stamps" and they aggregate in a "passport") and launched trip itineraries for brands such as National Geographic. Meanwhile, Foursquare has launched programs with Bravo and the History Channel where users can unlock branded content. "It's going to be about differentiated value," said Sam Altman, CEO of Loopt. "I doubt [Facebook] will have the most sophisticated offer for marketers."

"No one knows what Facebook will do, but the argument is the same: Checking in by itself is not that interesting," said Tristan Walker, Foursquare's head of business development. "It's about the value on top of that check-in."

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