A recent Forrester Research study said that the number of consumers using geolocation apps such as foursquare, which rewards shoppers with points or offers when they check in at a location, is only a few million monthly and it recommended marketers wait to advertise on such apps until more consumers use them.
Many more consumers may soon be using the technology. Social network behemoth Facebook is hoping to crack the location market with its new offering called Places, a geolocation feature that enables Facebook’s 150 million mobile users to broadcast their location through their Facebook status windows via a smartphone’s integrated GPS technology to friends as well as other Places users nearby. Not only is 150 million a big number, Facebook mobile users are twice more active on the social network than non-mobile users, Facebook says.
Facebook aims to protect the privacy of its members and to head off more of the kind of criticism it’s faced over privacy questions in the past by requiring members to opt in to participate in Places, thus agreeing to disclose where they are. Places users also are prompted with permission requests when other users seeks to utilize their location information. The location of Facebook members not using Places is not broadcast, nor can it be obtained without enrolling in Places.
The goal for users is to let friends know what they’re up to, such as shopping at a local store, and possibly meet up if a friend is nearby. The goal for Facebook is to sell mobile ads to merchants that would drive foot traffic into stores, which would be the goal for any retailer with bricks-and-mortar shops.
“The success or failure of these services depends on what the real benefit to users ultimately is,” says Brad Wolansky, CEO of multichannel retailer The Golf Warehouse, which is active in the mobile space with an iPhone app. “I’ve used foursquare and haven’t yet seen much benefit that’s meaningful to me. But with a larger group of friends using Places, that might change. And as far as advertising, we’ve dabbled in Facebook, but frankly, our experience hasn’t been real enticing for a retailer yet. When their advertising model, overall, becomes more usable and productive, I’m sure more and more features like Places will help the productivity of such advertising.”