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Wednesday, August 11, 2010

Is Location-Based Social Networking The Next Big Thing . . . or a Bust?

Since the launches of Friendster and the explosion of MySpace and Facebook in the early part of the century, online social networking has become a part of mainstream life.  What once was thought to be just a place for teenagers, has become services used by every generation.  They have enhanced and changed the way we communicate.  They have become significant components for businesses to advertise and engage their customer base.  And with the ever growing mobile devices, the services have been evolving at paces that are often difficult to keep up with.  The most recent evolution is what is called 'location-based' social networking.  The most notable here is Foursquare that opened about a year ago.  The concept is that users share their location with others (a business or local site) and can post comments about it.  The more a user 'checks-in' at a location, the more points they earn and have the opportunity to attain the ever-coveted 'Mayor' designation of a location.  Users can also set the service to update their friends on Twitter and Facebook with each 'Check-In'.  Obviously there are debates and concerns over sharing one's location and the personal security of that, but more important is whether this type of social networking can capture enough of an audience to truly be the 'next big thing' in social networking or is it just a 'fad'?  Then again, how many people laughed at Twitter and are now practically begging others to 'Follow me'.  One thing stands certain, mobile social networking is in growing in leaps and bounds. 

Because the Foursquare service is relatively new and has captured almost 10,000 users (according to in such a short period of time, location-based social networking may be something that is attractive and can become very popular long-term.  One thing is true about online social networking and that is that it is evolving as users grow in the use of the services.  Another emerging trend is also becoming a truth and that is that the attraction can fade quickly and long-term success comes from a more mature generation of users. has a primary user base of 13-34 years old which comprises 71% of it's users and 24% being 35-50+.  They have seen a huge decline in membership from over 80 million in 2007 to 46 million this year.  At the same time, has a primary user base of 13-34 years old which comprises 64% of it's users and 32% being 35-50+. has grown from about 9 million users in 2007 to over 130 million in 2010! has roughly 39 million users with 81% being over the age of 18.  One other notable quality is the 'group setting' for the user.  MySpace is primarily focused on individual profile pages and the appearance of them.  Facebook and Twitter are more focused on the streams of updates from friends and followers.  is different than other social networking services in that it is more about the promotion of the location than the user themselves. Some businesses have already begun to embrace the service with open arms.  Pizza Hut began testing 'freebie' promotions to 'Mayors' of their locations (see the article from PRNewsWire).  Starbucks has also began testing discounts to those who are frequent 'Check-ins' and 'Mayors'.  (see the article from  Like these, the early business embracers of the service seems to be primarily restaurants.  The question then becomes can this industry be enough to sustain the service long-term?  Couple that with the 'creepiness' of actively and consistently announcing to large groups of people exactly where you are numerous times each day and you may see barriers to the growth of users.

Does that mean 'location-based' networking will peak and fall?  I don't think so.  What I personally see happening are viable and powerful evolutions of the service.  Take for example the use of location-based community notifications of issues that get sent directly to local governments being applied more and more throughout the country.  One very interesting online service is from  This online and mobile app-based service allows users of smartphones like the iPhone, Android, and Blackberry to take a photo of an issue and the location and photo is sent directly to a designated local administrator via email notification.  The issues are then automatically mapped for other residents to view and track online.  New York City has launched its own mobile app cwith similar features to empower residents.

Another adaptation of the 'check-in' model is from   Rather than the user 'check-in' to a location, they are 'checking-in' to  type of media (i.e. books, movies, TV Shows, events, etc.) that is shared with others.  In turn, users can build networks around similar likes and share thoughts.  This one is very new and will be very interesting to see how it performs over time especially since it has grown to over 38,000 users since it's launch in July of this year.  This particular model has a very solid foundation in my opinion since it once again puts the focus on the user while empowering the user to promote the product in a social setting.  Oh, and you get to earn 'stickers'!  I just started using the service and have 2.  Not a lot I know, but I think they are cool stickers. 

For wide-scale adoption for location-based social networking for businesses, marketers will need to get more creative in my opinion.  The current model from seeks to obviously gain wide-scale recognition of a location and business but focuses on rewarding just a few for their repeat business.  Likewise, the 'badge' and 'mayoral' rewards may not sustain long-term motivation for users.  Businesses may want to test promotions which reward many with 'exclusive' discounts for even one time 'check-ins'.  For example, say you have a store promotion of 20% off various items in your store and the store then offers an additional 10% off for Foursquare users that show they have checked in when arriving at the store.  In those cases you then broaden your advertising reach significantly with real tangible rewards to users.  Would that work?  Not sure, but it would be an interesting test to see tried. 

Right now, it is too early to tell the long-term adoption and possible success of location-based social networking.  Are there some trying this service locally?  Absolutely.  Ky Ekinci of Office Divvy is a very active user of the service.  Mark Woods (aka @TikiTender) of Golden Lion Cafe is another pretty active user and the 'Mayor' of Golden Lion Cafe

What are your thoughts on location-based social networking?  How are you using it for business?  What are your thoughts on publicizing your location to others?
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