The timing is ironic. Last week, I told a friend who's nominally on Foursquare, "These will be the only five days you'll find Foursquare useful." It's an event where people shift where they're going based on what's buzzing on Foursquare and where their friends are checking in. I knew Friday night I was at the best party in Austin solely because every other Foursquare friend was checking in there.
And yet Foursquare chose this event, of all times and places, to launch a program with American Express that offers users $5 discounts at dozens of merchants in downtown Austin. Days earlier, Foursquare allowed merchants to create new kinds of special offers. Points are also now more prominent, offering a form of social currency or bragging rights. It's not hard to imagine Foursquare later converting the social currency to hard currency, offering better deals to its point-leading power users.
At SXSW, most apps are resorting to bribery to get people to use them. Foursquare, ubiquitous as it is here, randomly rewards people who use the app with a Golden Ticket badge redeemable for tickets to its Big Boi concert. Gowalla randomly drops VIP passes to its own party. Whrrl and Loopt, two apps I've barely seen anyone use here, offer drawings and contests for all kinds of prizes. SCVNGR's one of the only notable check-in apps not offering exclusive rewards for SXSW attendees, but founder Seth Priebatsch gave a keynote speech and plugged LevelUp, his company's new local deals service. The only such service to stay quiet here is Facebook Places. Note that when Facebook Places launched last year, the biggest news was Gap giving away a free pair of jeans.
The "dealification" is a sacrifice these services make as they strive for maturity. Foursquare should hit the 10 million user milestone in the coming months. Facebook has issued vague reports that its service has far more users. SCVNGR and others are clearly bullish on their own growth potential, even if some should die quietly by the end of the year. Where will this growth come from?
Deals, special offers, and personalized recommendations seem to be the ticket for more mainstream adoption. Foursquare reportedly rejected a $100 million offer last year, while Groupon reportedly rejected a $6 billion offer more recently. All indicators point to a small, dedicated, growing base of early adopters who enjoy sharing their locations via check-in apps and finding out where their friends are, while just about everyone loves a great deal. It depends how that deal is delivered though, as reward-based apps like Shopkick, Checkpoints, and others are just starting to find their footing. Social check-in apps will have the added challenge of trying to please a wide range of people, from their core social media savvy power users to those who will need to constantly find relevant offers wherever they go to keep them engaged.
The purely social check-in concept has proven so far to be a novelty. It has to be something else -- a deal, a personalized tip, a game, or perhaps all of the above. Finding your friends in its own right hasn't been enough, and if it not enough for SXSW attendees, that marks the death of the idea.
|ABOUT THE AUTHOR|
David Berkowitz is senior director of emerging media and innovation, 360i.