Location Marketing after Facebook Places Checks In

A week ago Facebook launched Places, the social network’s entry into location-based marketing. Partners Foursquare, Gowalla, Yelp and Booyah appeared onstage and talked up their cooperation with the giant.

Now that the Places service has been live for a week in the US, how is it changing our checkin behaviors? And what does the announcement mean for location-based marketing generally?

At the Places announcement, Foursquare and the other partners were quick to point out that Facebook was bringing checkins into the mainstream.

photo of a crocodile

Anecdotally, that seems to be the case. The hotel near our offices now sports 19 checkins on Places – not bad for the first week of a service that’s only available on iPhones. That already leads Gowalla’s 14 lifetime checkins. Foursquare, by contrast, shows 156 checkins, from 80 different people.

The folks at Spredfast have noticed a change in their checkin habits. For them, the advent of Places has encouraged fewer checkins to Foursquare and Gowalla – in part because the thrill of the game mechanics has faded.

The main reason I check-in now is to let my peeps know where I am and what I am up to. The days when being the mayor, getting badges, or finding items was an enticement have passed me by. – via blog.spredfast.com

Curiously, the Spredfast folks find Places have made them a bit more selective about checking in. No use clogging up the newsfeed with three coffeeshop checkins a day.

But is Facebook really out to kill the location services, or merely to create a platform for location that others can innovate on? The initial release’s minimal features – basic search, checkin count, and a map – may mean that Places was designed to be a commodity platform. Yishan Wong, who formerly worked on Places, says that was the project’s aim – at least while he was involved.

Companies like Foursquare find the “venue management” business to be quite tedious and not the real source of differentiating value (i.e. Foursquare isn’t more successful than Gowalla due to a more complete listing of locations), so commoditizing this aspect of their business doesn’t threaten their core value proposition.

– via quora.com

Or does it? Surely Facebook didn’t enter the location marketplace to solve Foursquare and Gowalla’s database problems.

No, I believe that Facebook sees future revenue here, a way of increasing the value of its ads. Seen this way, Places is a defense of Facebook’s targeted advertising.

This could work two ways: in one scenario, checkin data improves the targeting (and the value) of its existing in-platform ads. This scenario may not directly sap the value of Foursquare and competitors’ proposition to advertisers – not immediately, anyway.

In the second, Facebook targets businesses who claim their Place pages, perhaps charging for the checkin data, or for analysis of it. Or – more likely – they sell ads directly to local firms. This approach challenges Yelp and Google Places directly. It also competes with Foursquare, who has been working to provide businesses with just this sort of information (while encouraging them to list specials to further the popularity of the platform).

Still, the value proposition behind checkins – their promise as the backbone of local business’ frequent buyer programs – remains. Any marketing that aims to take advantage of this should still consider a location-based campaign.

From a technical standpoint, the Facebook Places API is now read-only, so Foursquare is still the popular bet. But after Facebook opens its API for checkins, that may change.

You can be sure we’ll post about that here.