IN-DEPTH: Assessing the maturity level of location-based-applications that allow users to 'check-in' at a location at this stage

Published: 27 Jul 2011

IN-DEPTH: Assessing the maturity level of location-based-applications that allow users to 'check-in' at a location at this stage

By Ritesh Gupta

Location-based technologies are changing the way consumers engage with travel brands. And marketers are trying to make the most of the data that is being generated through location-based service apps. The travel industry is also increasingly looking at sustaining customer relationships through avenues such as Foursquare, Facebook Places and Gowalla.

The underlying trend driving location-based services (LBS) is smartphone adoption, says Rob Reed, founder and chief executive officer, MomentFeed, a location-based analytics and campaign management service specialist. Reed says, “They are quickly becoming our primary source for communications, information and entertainment in general but more specifically when we are traveling. This can be small trips locally as well as international destinations.”

Reeds added, “Of course, the smartphone is the hardware component. The application layer is where consumers are focusing all of their attention, and that’s the key. Our attention is increasingly being consumed by smartphone applications, which means it is not being directed elsewhere.”

“For travellers, this can mean Yelp, Foursquare, Google Maps, Facebook, Twitter, Gowalla, and others with location and/or social features. If the travel industry wants to meet consumers where they are, it has to participate and maintain a strong presence in these platforms because it's growing fast. We’re at roughly 38 percent smartphone adoption in the US today, on our way to more than 50 percent by year end and global ubiquity by 2015,” explained Reed.

The MomentFeed beta, which launched earlier this year, integrates Gowalla, Facebook Places, Foursquare, and Twitter as a unified dashboard. MomentFeed is a location-based analytics and campaign management service (SaaS) for companies with 20+ locations to manage. The company secured $1.2 million in Series AA financing earlier this month.

Reed spoke to EyeforTravel’s Ritesh Gupta about the latest trends and developments. Excerpts:

How do you assess the maturity level of location-based-applications that allow users to 'check-in' at a location at this stage?

Rob Reed:

It is still dominated by early tech adopters. But that also represents a fairly big market unto itself. Foursquare is largest of the pure-play check-in apps. It has more than 10 million users, and it’s growing by one million users per month. What’s so compelling about these early adopters is that they tend to have high levels of influence. Which is to say they are highly networked to other influential people. This is word-of-mouth marketing on steroids. Every check-in to a brand represents some form of earned media because it is being shared with a social graph. It could be Foursquare, Facebook, Twitter, or all of the above. If you're a location-based brand, you want to encourage and incentivize people to check-in. This doesn't necessarily have to have a monetary component, but brands should certainly test if discounts perform and deliver some measure of ROI.

When it comes to location-based marketing, what should travel companies be wary of for both analytics and campaign management? Why should they embrace such services?

Rob Reed:

It's going to vary from brand to brand and company to company. If you own or manage actual locations that receive frequent consumer traffic, there is a very clear case to start participating and engaging. First, you need to register your "venues" on each of the services. This enables you to update the basic brand and address information, and it unlocks much of the data about who, when, and how consumers are engaging. This can provide tremendous insights about your customers. From here, it's matter of leveraging the tools that each platform makes available, such as Foursquare Specials or Facebook Deals. Our solution streamlines all of these processes and makes it much easier to manage the data and campaigns for multiple locations.

The apps related to check-in services continue to get refined. How do you assess such enhancements related to social location broadcasting and sharing?

Rob Reed:

I look at LBS apps in two primary categories: horizontal and vertical. The big platforms like Facebook, Twitter, Google, and Foursquare are horizontal. These are largely general-purpose apps. They provide the basic check-in utility with certain value-adds like offers. Vertical apps are specific to a category, such as gaming, food, fashion, or photography. Often they are built on top of the horizontal platforms, such as Instagram, which is a photo app that uses the Foursquare place database to tag photos accordingly. Gowalla started out as a horizontal app and is evolving into a vertically oriented travel app. It enables you to push check-ins to Facebook, Twitter, and Foursquare and features a virtual passport. It's the app I use when traveling because it's a better diary with photos and passport stamps.

It is highlighted that the LBS market is highly fragmented. Can you elaborate on challenges associated with monitoring location-based engagements across multiple locations and conducting ongoing competitive analysis for traffic and engagement?

Rob Reed:

It is highly fragmented, and it will continue to fragment as the space evolves. We'll see many more vertically oriented apps that serve specific purposes or niche markets. It's a lot like the publishing industry in this way. For every New York Times there are thousands of regional or niche publications. One of the universal features of LBS apps, though, is what we term Location-Based Engagement (LBE). And these engagements are quite valuable...magnitudes more valuable than the online equivalent because the consumer is present at the point of sale in most cases. This fragmentation issue is the central problem that MomentFeed solves. Whether it's the broad horizontal platforms or niche applications, we'll provide clients with a comprehensive and holistic view of how consumers are engaging with their locations as well as various mechanisms to reciprocate and maximize the value of those engagements.

One of the challenges associated with LBS is to gather enough data and insight to make sense of it from a marketer’s perspective. A company like Momentfeed points out that the LBS space is broad in terms of the types of applications companies offer, how consumers are using them, and the value propositions available to consumers and businesses alike. What’s more, the data exists in so many silos with limited access. What is the industry doing to overcome such hurdles?

Rob Reed:

The industry itself is doing very little to overcome these hurdles. Each company...Google, Facebook, Foursquare, Groupon...wants to own its piece of the LBS pie. So they're doing very little to work together. But a brand like McDonald's doesn't necessarily care which apps people are using to engage; they just want to make the connections. So MomentFeed approaches the market from the McDonald's perspective: what does a company with 30,000 global locations need to manage and maximize all of this activity as efficiently and effectively as possible? That's our solution.

Can you elaborate on the qualitative (level of engagement) and quantitative (traffic) analytics as far as location analysis is concerned? How has such analytics evolved over the past six months or so?

Rob Reed

Location-Based Engagement has basic quantitative metrics i.e. how many people checked-in on a given day. It also has a qualitative component, whereby we measure how deeply people engaged when they were there. We measure this through all of the additional engagements beyond the check-in e.g. tips, photos, reviews, redeeming offers, and sharing to other networks like Facebook and Twitter. In Web analytics, this would be akin to the "Pages Viewed" and "Time Spent" metrics we know so well. Because a check-in could be an incidental engagement, whereby a person was simply letting their friends know where they were. The additional engagements take it to a deeper level and have corresponding value.

How do you expect the whole LBS arena to shape up in the next 12 months or so?

Rob Reed:

It's anyone's guess at this point. The space is evolving so fast, and there is a lot of capital available to develop new apps and approaches to this market. It seems very clear that Google will gain a significant foothold when it marries Google+, Latitude, and Places, while opening it up to brands. Groupon and Living Social will also start to capture marketshare. The travel industry should watch Gowalla closely and explore some custom programs like what they've done with Disney theme parks. I hear Gowalla has some great new features in development, and I'm confident they'll be suited to avid travelers. Finally, I think that location-based gaming is ideally suited to travel, as it enables consumers to better explore and engage the places they go. This is best done, in my opinion, through some measure of augmented reality.