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Facebook Places Makes Now the Time to Invest in Location-Based Services

Posted on Thursday, August 19th, 2010 by Print This Post Print This Post

Categories - Featured, Mobile, Social Media

Location-based services have been the hottest topic in online marketing.  Yelp, Foursquare, and Gowalla have all had huge growth in their user base, and businesses of all sizes are jumping on board to find new customers and reward their loyal evangelists. If you’re not familiar with how these sites work and their value to marketers, I highly recommend downloading the Comprehensive Guide to Location-Based Social Media.

Despite their growing popularity, though, location-based services and advertising have been considered more blog hype than corporate success story.  That may be about to change following Facebook’s announcement that they are entering the world of location via their new service, Facebook Places.

This comes on the heels of a Forrester Research report released in late July that suggested advertisers stay away from location-based marketing and location-based social networks because not enough people currently utilize those types of services.  Wired did an excellent job highlighting a few key points of the report, such as the fact that only 4% of online adults use location-based services and only an additional 3% are aware of friends that use them. Perhaps the most intriguing notation, though, was an excerpt from the report that said only a few million consumers use geo-location apps monthly.

I don’t know about you but “only” isn’t the word I’d use to describe a few million consumers.

To be fair, the report does have some pertinent data and recommendations. For instance, it states that people who use location-based services tend to be well-educated, young males from households that make over $100,000 a year. It also points out that people who use these services tend to influence their social graph, making them prime targets for hyper-focused advertising.

Sadly, each insightful piece of information in the report leads to an incredibly shortsighted conclusion – marketers not looking to reach a specific segment of the male audience should sit back and wait on location-based marketing and advertising until it has a higher rate of consumer penetration.

While I am not suggesting that every marketing, advertising and internet agency begin unscrupulously throwing cash at this burgeoning platform, I do think it would be foolish to cast it aside completely. As an industry, we should be fully engaging with location-based services so that we will be ready to capitalize on them if and when they cross into the mainstream. Facebook’s entrance into this space only further convinces me that location-based services and marketing are worthwhile investments.

With that in mind, here are 5 reasons why you and your company should absolutely embrace location-based marketing today:

1) Forester Research pointed out the relatively few users of location-based services, but what it failed to highlight was the explosive recent growth of such services. Foursquare alone has over 2.5 million users and has experienced 28% growth in just the last month, according to RJ Metrics. More and more people are beginning to utilize location-based services, and as smartphone adoption increases in the U.S. and around the world, the numbers will only continue to increase.

2) Many location-based services have a similar structure – users open an app and check into a location to receive various types of points or rewards. However, this is but one type of functionality that is possible. Services such as Google Latitude allow people to constantly broadcast their location and newer services like GroupTabs combine check-ins with the power of group buying services like Groupon. The possibilities, both from a consumer and marketing standpoint, are endless.

3) As alluded to in the last point, one of the knocks of using location-based services is that checking in to a location is not the most seamless of processes. Enter geo-fencing. Geo-fencing allows users to place virtual “fences” around specific areas and broadcast their entering or exiting of the “fence” to others. For example, let’s say I place a fence around a local restaurant I like to eat at. When I enter the fence, the restaurant will be notified and a location-based marketing ad could offer me special coupons or discounts.

4) Although “only a few million consumers” use location-based services now, let us not forget that even the aforementioned Facebook did not reach 500 million users overnight. In fact, there is a segment of the population who are already interested in receiving mobile alerts. According to a study done by Harris Interactive, nearly a third of parents with children between the ages of 6 and 12 would opt-in to mobile marketing. In addition, 25% of non-parents would be interested in the same services.

5) Did I mention Facebook?  The social networking giant’s new service is the biggest X-factor of all. Facebook Places instantly exposes 500 million users from around the globe to the world of location-based services, and this should be enough to get would-be location-based marketers excited. The fact that Facebook is also partnering with 3rd party services – and not going for outright domination of the space as some pundits had speculated – gives Facebook Places an even greater chance to gain widespread acceptance.

What It All Means

As with any type of marketing campaign, there is no one size fits all strategy. Certain products will lend themselves better to location-based marketing than others, but a limited amount of consumer penetration should not scare you away from investing in the platform.

Do you want to be late to the location-based party as many companies were and continue to be with Facebook and Twitter? Do you want to lag behind the competition as many companies did and continue to do so in regards to search engine optimization and search engine marketing?

Or would you rather get ahead of the curve and become an expert in location-based marketing before your competition does? Not only will you become better informed about mobile marketing strategies, but you will also be putting your company in a position to capitalize on the industry when it begins to really take off.

In short, with location-based services just beginning to unlock their potential and Facebook Places about to bring this budding industry to the masses, now is the time for you and your company to invest resources into the platform.

Just like in real estate, it’s all about location, location, location.

About David Carrillo

David Carrillo is an Earned Media Manager at The Search Agency where he assists clients executing holistic SEO and Inbound Marketing strategies that include audits and recommendations spanning content, promotions, architecture, social and analytics. Outside of the wonderful world of Inbound Marketing, David’s interests include technology, gadgets, gaming, sports, naps and general debauchery.

Follow David Carrillo on Twitter

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7 Responses to “Facebook Places Makes Now the Time to Invest in Location-Based Services”

  1. Alec Green says:

    Great article David. And I agree that the launch of Facebook Places has the potential to make “check ins” a mainstream activity. I could see it going the same way as TiVo and the growth of Digital Video Recorders. For a long time, the tech geeks and hardcore TV junkies couldn’t imagine life without TiVo, but the whole category of DVRs never gained widespread acceptance until the technology was integrated into satellite receivers and cable boxes. Now that LBS is “integrated” into Facebook, the late adopters will be more likely to give it a shot.

  2. Barbara says:

    This is a great post – well thought out and presented and very informative. Thanks for your first contribution Search Agent.

  3. Rick in SoCal says:

    Curiously, the same day this appeared CNN put up a poll asking it’s viewers (website) if they would be using Facebook Places. There was no maybe about it, “NO” posted 91% and the “YES” only 8%. Nearly 100,000 people responded, however CNN always adds the caveat, “This is not a scientific poll.”

    Before everyone jumps onto the LBS bandwagon, isn’t there a very real possibility Facebook Places will eventually lose it’s cache and fizzle out?

    • Hey Rick,

      Thanks for taking the time to read and comment on my post.

      To answer your question, it is definitely possible that LBS fails to meet expectations, but I see no reason that it will fizzle out completely.

      Even if CNN’s numbers hold true in the long run(which I think they won’t), 8% user engagement would still mean that 40 million people would be using Facebook Places.

      The industry is just starting to gain mind-share with the general public and as more people become aware of its presence, I see great potential for advertising/marketing.

      • Rick in SoCal says:


        Thoughtful and interesting response. Thanks.

        I’m a baby boomer, as I would guess are many of the CNN respondents. Those of us who have embraced the digital age still have serious reservations about the access we may be giving to unknown parties. We have “No Solicitors” signs on our front doors but can’t figure out how to accomplish the same on out computers.

        The great potential you mention may have to achieve success without the boomer demographic.

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  1. The Week We Searched For- Facebook Places- August 19, 2010 - Web Design Greece – WEBTEC

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