Facebook expands its Places product by opening its API and adding a Deals feature. What does this mean for LBS?
Originally posted on the MomentFeed Location Blog.
Facebook debuted Places back in August. This added the social gesture of “checking in” to its iPhone and mobile Web apps. It was huge news for LBS, but it was mere foreshadowing to last week’s announcement. What started as a product feature has now become the Facebook Places platform. By extension, Facebook is now the de facto platform for LBS.
The impact of this on the nacent LBS space cannot be overstated. The question is whether it will be positive or negative and for whom. In the following, we highlight the three major announcements—Single sign-on, Open API, and Deals—and what they mean for the LBS ecosystem.
1. Facebook announced a single sign-on for mobile apps. Much like its Web counterpart, being logged-in to the Facebook iPhone app means you can be logged in on any app that uses this new authentication standard. This is huge for mobile in general and for LBS in particular. Consumers can now take their Facebook social graph into any LBS application. Which means that if you’re logged-in to Facebook and open Loopt, MyTown, Gowalla, SCVNGR, Whrrl, Foursquare, and others, you’d already be logged-in on those (assuming each enables it). This lowers the barrier for trying these apps and, therefore, opens them to many more users.
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The one simple feature all location-based services should have in common: a business thank-you message
The location-based services (LBS) space is remarkably fragmented, and the forces at work here are many.
The geographic nature of these services creates hot spots, most notably in urban areas but also in the regions where the companies were founded. Foursquare is hottest in New York, while it should come as no surprise that Gowalla, Whrrl, and SCVNGR are favorites in Austin, Seattle, and Boston respectively. Next, you have niche applications like Foodspotting and JustSpotted, which are both location- and subject-specific. There are vertical-interest checkin applications like those from ESPN, the NBA, and Apple. There are location-based gaming applications like MyTown. And finally there are the catch-all LBS applications from Facebook and Twitter.
Regardless of fragmentation for any reason, each app shares the checkin feature (or some variation) in common. We’d like to suggest another universal feature: “Thank you for checking in.”
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A cautionary note to advertisers about text messaging as a marketing channel
Have you ever registered a phone number with the national Do Not Call list? If so, then you’re more likely to agree that SMS is not a preferred channel for marketing messages.
I use SMS as a communications channel between friends, family, and people I know. I use it the same way I previously used a home telephone. When my mobile phone alerts me to a text message, I expect to look down and find a message from someone I know, just as I had always expected to pick up the phone and actually know the person who was calling.
Except when a telemarketer got ahold of my number and interrupted whatever I was doing to sell me something that I wouldn’t buy precisely because of how it was being sold. Interrupting me with a sales pitch through what I consider an exclusive communications channel will always result in failure and negative sentiment toward whatever brand is being represented.
Does this mean SMS marketing is not effective? Hardly. In fact, it’s every bit as “effective” as telemarketing. It’s a numbers game. As long as the direct ROI is sufficient, it doesn’t matter how many people you offend in the process. Right? If you agree, then we can agree to disagree. Because this approach isn’t sustainable. Not in a hyper-connected world and not if you value brand equity.
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Today’s social media and digital natives are in their 20s. The next generation will be location and smartphone native, and the impact will be even more profound.
The disruptive effect of smartphones on media, communications, and commerce cannot be overstated. It is truly a revolution that will be felt in every corner of society.
Smartphones represent the greatest technological and social disruption since the Internet itself. And just as we referred to those who grew up with the Internet—who don’t know a world without it—as digital natives, we need to consider what it will mean to never have been without a smartphone. To be a smartphone native.
First, a bit of semantic clarification. The term “smartphone” refers to a mobile, handheld computer such as the iPhone. The term is more convenient than accurate. It’s practically an anachronism because the phone feature (voice calling) represents a small percentage of how we actually use them. They have broadband connections, web browsers, e-book readers, maps of the world, motion sensors, and HD video cameras. Indeed, our children will have a radically different idea of what a phone is than we do. Which brings me to a couple anecdotes.
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Embracing location-based services (LBS) could be the last best hope for local and regional publishers
It goes without saying that newspaper publishers are suffering. The steady decline in relevance and revenue began in the ’90s with the rise of the Web. This accelerated with Web 2.0 and the Great Recession. The final nail in the coffin could be the rise of mobile and LBS. Alternatively, it could be their savior.
Back in August, Dave Morgan asserted that Location-Based Web Services Will Devastate the Local Media Scene:
“If local newspaper, yellow pages, radio or local TV companies thought that Google, Yahoo, eBay and craigslist were disruptive, they are now going to face down a competitor that will have an even bigger impact on their businesses than any one of those companies did.
I believe that location-based Web services will take 20% to 25% of the annual revenue out of local media’s current advertising base within four years. Yes, 20% to-25% of their revenue base will be lost by 2014. That spend will be displaced by promotion and marketing fees paid to these new location-based services or applications that run on top of them. To the incumbent companies, these new services will be like craigslist on steroids.”
More recently, TheNextWeb stated bluntly that Local Newspapers Are Dead Men Walking:
“The recessions is over and many forms of media are seeing a rebirth of their advertising demand. Things are on the mend for national newspapers, network television, and even radio here in the US.
While those mediums are seeing large gains, inducing cries of joy it must be assumed, local papers are notrecovering. Year over year (YOY) advertising growth for the first 6 months of 2010 versus the first six months of 2009 was a paltry 0.2% for local newspapers, leaving them nearly unchanged after exiting a recession.”
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