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Eric Miltsch

Eric Miltsch Co-founder

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Location-based Media: The Hottest Segment in Social Media


Welcome to the world of Location-based Services. These applications are changing the way people experience everyday activities like shopping, eating, traveling, watching a movie or taking a picture.

Location-based service strategies include any application which have the ability to share an individual’s physical location, in real-time, with their online social networks. Users are rewarded with badges, stickers or points - satisfying the need for self-accomplishment. Users can also be rewarded for their activity by companies and brands leveraging these services as another element of their marketing strategy. Among the most popular location-based services are Foursquare, Gowalla and Yelp. Add Facebook Places to the location buffet as well.

Why has this become a significant factor for brands to consider? A perfect storm of circumstances is creating a unique set of opportunities:

Technological & GPS capabilities of our mobile handsets is advancing - quicker than ever

Consumer acceptance & usage of social messages - as consumers & influencers

A continuous need for brands to create unique consumer experiences & lower acquisition costs

What if you want to create a hyper-local, targeted campaign? One with the ability to draw attention to your current promotions and target qualified prospects within a specific location? Historically, a traditional ad agency or a direct mail campaign may be able to help. For a hefty fee. Let’s also say you want the agency to create a few slick features. Features that can really help your business by:

Improving online interaction

Increasing foot traffic

Creating sticky word of mouth interaction

Enhancing customer segmentation & analytics tracking

Building new-school forms of loyalty program rewards (Online & Offline)

Location-based marketing strategies already provide these features, for free. I’ll repeat that so it sinks in: the services are free. Now is the time to use it. Didn’t you learn your lesson when you waited to launch your blog and optimize your website?

Is Location Right For My Business?

As usual, most companies will wait before they participate. Forrester Research bluntly stated: “Unless you’re targeting affluent men between 19 & 35, you don’t belong on Foursquare.” Seems like a prime demographic group for both automotive manufacturers and retailers to target.

Even if you don’t recognize it, your customer base already participates in some form of location-based marketing activity. This segment is positioned nicely for explosive growth. 42% of in-store retail sales were influenced by mobile and Internet research in 2009. This number is expected to grow to 53% by 2014. Consumers enjoy being able to locate points of interest, shops and services via their mobile phones. Also helping drive consumer acceptance: increased willingness to share their location in exchange for perks and rewards. And the awareness factor is going to explode with Facebook’s presence. They have the potential to make location-based status updates a mainstream concept by presenting it to 500 million users.

63% of iPhone owners use location-based services once a week.

25-34 year olds are already labeled as frequent users of location-based services

And yet, companies are reluctant to play within the location segment because of the lack of understanding. The biggest problems are not with the location based services themselves. (Other than maybe their ability to market their own services) Initial perceptions of platforms such as Foursquare, Gowalla and Facebook may lead decision makers to believe these are simply game platforms for geeks.

Few people actually understand the full scope of these applications; they’re missing the opportunity to create a profitable element within their marketing strategy. The platforms themselves have already proven to be a success among the early adopter crowd. The next level of success now falls on the creative marketing types to develop winning strategies. Wait until the real benefits and value of checking in are realized by the brands and the individuals - consumer experiences will really change then.

Within the past few months, the location-based services segment has experienced another significant shift. Specific activity updates combined with location-based check-ins now pack a punch even more valuable to marketers and more engaging for users.

New applications targeting food fans (Foodies) such as FoodSpotting and FiddMe let users share images of their meals while including location specific check-ins. TV and movie fans have embraced Miso and Philo to share their guilty pleasures. Want to share more of your activities? What about what you’re listening to, reading, thinking about or even attending? GetGlue helps you share those activities with your friends while rewarding your participation. I wouldn’t be shocked if Amazon swallowed GetGlue - seems like a perfect match. I’ll be watching that closely.

I know what you’re thinking. Where’s the automotive location app? Keep your eye on CarZar - the first social automotive app. with location-based functionality. This application was created to change the way people share pictures of cars with their friends and networks. Instead of posting a picture of a cool car on Flickr, Twitpic or Facebook and sharing the link via email or twitter - pictures are shared with your networks to create instant interaction. Images can be commented on, liked and tagged. Location-based check-ins are an option as well. Sharing images unlocks badges and creates the potential for consumer rewards while creating several new marketing solutions for car enthusiasts, private sellers, car dealerships and manufacturers.

What To Expect Next?

Location-based services will improve how users share their personalized activities, increase business intelligence and provide companies an easier method of rewarding consumer loyalty. Participation will be controlled by automatic GPS triggers, linked to pre-selected social networks, eliminating the need for manual check-ins.  Privacy and spam will be key topics, however improved disclosure and education will lessen the confusion. Greater usability and control with regards to silencing entire networks or single users will help participants control noise levels.

Facebook will raise the mass acceptance and create a general brand awareness within the location segment. The Foursquares and Gowallas of the world have the ability to become the boutique solutions - each creating something with their various depths of status updates and rewards.

Search-style location services and augmented reality browsers will create greater breadth of user experiences. Search application solutions catching the earliest adopters eyes are Goby and Center’d while Layar and AcrossAir are among the augmented reality standouts. Current location apps let users interact once the activity has already been chosen; the next generation of apps may help users choose their activity based on their specific interests. Who knows, besides longitude and latitude, altitude may become an option as well.

Social media was born out of our desire to share something. Sharing what’s important will never change. How we share the important stuff will change.
Eric Miltsch is the IT/Internet Director for Auction Direct USA Used Vehicle Superstores; recently awarded as the 2010 #1 Independent Retailer of the Year. Disclosure: Eric advises on various online strategies and is also a co-creator of CarZar, along with Jared Hamilton.

Stacy Mueller
Great writeup, Eric! Location-based Media definitely has the potential to be a game changer as it continues to evolve.
Eric Miltsch
Thanks Missy! I'm thinking the evolution will be a quick one too...
Allan Cooper
Another great article that addresses the fear of jumping in and participating with a new technology. I remember all the people that thought I was absolutely insane to think we could sell cars on the internet in the 1995... 15 years later some of those same people are singing the same tune about LBS.....they all have a web presence now, much later than than everyone else. It will be the usual story that the forward thinking dealerships engage, experiment, adapt and influence. The rest will be left trying to catch the train as it leaves the station.
Scott Golembiewski
Great post Eric! I would love to see some Foursquare and Gowalla data on businesses that offer more of an impulse type product and/or service. If I saw that someone I know just checked in at a car wash I could see that being influencial because its low cost and isn't something that requires scheduling. But I'd be willing to bet the real win is when companies partner to refer business like a website might do. A car dealer partners with a local car wash, that gives a free oil change if you come in the next 3 days, the car dealer then partners with a local restaurant for a free dinner if you come in the next 3 days, and so on....
Eric Miltsch
Thanks Scott, Agreed - those type of ideas could work nicely; similar to the type of ideas I envision for the CarZar app...

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