Location-based technology is trendy, competitive, and mostly used by tech-savvy early adopters. Yesterday afternoon, 200 people attended a half-day summit at Microsoft NERD that brought together the major thought leaders in the industry, including Dennis Crowley, founder of Foursquare and Seth Priebatsch, founder of SCVNGR. Advertising agency Allen & Gerritsen (a & g) hosted the event along with The Ad Club.
Panelist Jeff Holden, founder and CEO of Pelago, makers of Whrrl, said, “what this conference is trying to figure out is how do marketers utilize all these newfangled, white-hot location-based tools. It’s a very nascent space that needs a lot of education and guidance.” The summit helped kick off the first day of FutureM, a weeklong series of events in the Boston area about the future of marketing. “We have our head down building product most of the time. We know there are lots of agencies and lots of brands that want to use FourSquare. To get in front of a room like this is a good opportunity for us to find out what they’re interested in. It helps them use FourSquare, and it helps us build better products,” said Crowley.
Mike Schneider, Vice President, Director Digital Incubator for Allen & Gerritsen, orchestrated the event. “a & g is about what’s next, and we’re always pushing the conversation forward. We wanted people to leave with some takeaways — we didn’t want it to be a run-of-the-mill event,” said Schneider. They accomplished this by bringing in speakers who they knew would push the envelope.
The first panel discussed how to make money from location-based services (LBS). According to Wayne Sutton, business development/marketing strategist for Triout, a location-based service for people living in the Triangle region of North Carolina (which will be expanding globally soon), there are over 200 location-based applications that currently exist. Because the industry is very fragmented, it is common to see the same data on multiple platforms. Joshua Karpf, Senior Manager, Digital Media Communications at PepsiCo, said the future of check-in based applications will shift to checking into a product instead of a place, which will provide more interaction between the brand and the consumer since there is currently no way for a business to communicate with users who check in. Sutton was concerned that most businesses only offer one-off check-in rewards, and by the time consumers get used to a promotion, it’s over. According to David Chang, vice president of WHERE, “there is a disconnect between what users are using to check in and companies that are willing to pay for this data.”
The second panel discussed privacy issues surrounding data collection, as well as customer loyalty and how to keep customers engaged. According to Sean Corcoran, senior analyst at Forrester Research, only 4% of Americans currently use location-based services, and most of them are early adopter males with big incomes. A whopping 84% of Americans have never heard of LBS! Anne Mai Bertelsen, founder at MAi Strategies, LLC, wants to see online behavior be more connected to the offline world, which she believes will provide a richer data set of consumer behavior and also drive profitability. Although privacy is still a concern among consumers, the average household belongs to 14 loyalty programs and actively participates in six. “People are giving away data everyday,” said Bertelsen. Matt Galligan, CEO and co-founder of SimpleGeo, believes the responsibility for consumer data lies in the hands of three people: yourself, your data or service provider, and marketers.
Consumers don’t seem to mind sharing personal data with companies in exchange for the opportunity to receive a special deal. One of Bertelsen’s biggest frustrations with location-based services is that they don’t bring in the best practices of customer loyalty programs. “I want there to be a mix of aspirational and achievable since not everyone is going to be mayor or go to the same retail location every time,” said Bertelsen. She noted that an effective use case is the SCVNGR game to win season tickets to the Celtics, since it offers both achievable rewards and the potential to win the big prize. Aaron Strout, CMO at Powered, Inc., believes that intangible rewards, such as an immediate connection to the brand, might be enough for consumers to engage with location-based technology.
The third panel brought together Crowley, Priebatsch, and Holden to discuss the future of LBS. According to Crowley, “everything we do starts with a check-in. We want to build products on top of it.” Crowley wants consumers to use FourSquare as a tool to help them go out and do things they wouldn’t normally do. FourSquare’s main focus right now, according to Crowley, is to try to get as many venues online as possible. “The best sales people are smartass FourSquare users,” said Crowley.
Priebatsch, who built a special SCVNGR campaign for audience members to unlock a free candy bar during the panel, wants to focus on making games more fun. “I don’t think the world has reached its maximum fun quotient yet,” said Priebatsch, who turns 21 in 6 months and 7 days (apparently, he’s counting). SCVNGR recently started measuring the ‘social coefficient,’ or the percentage of people who visit a location with friends, which he predicted could become a powerful metric for venues and brands alike.
While the location-based technology space is currently crowded and competitive, it seems that consumers will be the ones to benefit from the developments in the end.
Check out the other FutureM events happening this week.
Special thanks to Jim Storer for the photos!
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