According to many pundits in the social arena, 2010 was the year of Location-Based Services (LBS). Companies like Foursquare, GoWalla, Whrrl, SCVNGR, Yelp, Loopt, Stickybits, Mytown and many more startups took over the space. And of course, Facebook launched their Places and Deals platforms. But as the act of checking in to LBS services via your mobile phone becomes commonplace for more consumers, what marketers are able to do with that data will really drive the revolution and determine the true value of LBS.
Enter MomentFeed. I recently caught up with founder Rob Reed, who has started a company that is looking to simplify and aggregate the activity on this channel (it is in beta mode presently, but launching soon). He shared some great thoughts on what his service does but moreover on LBS and checkin activity in general.
What is MomentFeed and why does a service like this matter?
We started MomentFeed because we saw that smartphones were basically going to
change everything. This really can't be overstated, and it boils down to the fact that
people have Internet-enabled, location-aware devices with them at all times. As a result,
this creates some incredible opportunities and just as many problems. In particular,
consumers are using a broad range of applications to engage with their favorite places,
products, media, and brands. All of the data being generated from these apps is highly
structured and valuable; however, it's incredibly fragmented and siloed. That's the
fundamental problem we want to solve, and we're starting with the location space.
Our Location Engagement Analytics (LEA) solution aggregates data from Foursquare,
Facebook Places, Gowalla, and Twitter. We make it easy for companies with 20 or more
locations to measure and manage all of this activity in one place.
2010 was the year of LBS. What kind of growth should we expect there in 2011?
If you come back to the smartphone as the fundamental driver of LBS, we saw adoption
in the US go from 19% in Q3 '09 to 25% in Q3 '10. That's healthy growth. In 2011,
though, it's projected to double to more than 50% according to comScore and Nielsen.
To put this into context, think about how different things were when we had 25%
Internet penetration in the US. It's safe to say that with these numbers, LBS will go
mainstream in 2011.
How does MomentFeed make these services simpler to quantify for businesses of any kind?
The simple answer is by putting all of the data in one place. And while that's valuable
for a company with one location, the value increases as you add both locations and data
sources. So if you're McDonald's with 30,000 locations and the potential of 20 different
LBS sources, that's 600,000 streams of data. A company like McDonald's will want to
segment that data in many different ways to gain critical insights about their customers,
to measure campaign performance, and ultimately inform major business decisions.
What type of analytics do you provide that will make it different from other offerings?
During our beta, we provide two basic metrics: traffic and level of engagement. The
former is quantitative-how many people checked-in to this location on this day-while
the latter is qualitative. Which is to say we measure all of the post-check-in activity, such
as taking photos or leaving tips, to determine an Engagement Score. This shows how
deeply people are engaging independent of traffic volume. It's a proprietary metric.
We've also designed the platform for competitive analysis and benchmarking. Our
clients can monitor competitor locations and compare based on the same metrics.
A recent post on The Next Web called MomentFeed the Google Analytics for the real world. Is that
fair? Why?
It's an easy way to understand the concept of LEA. And the interfaces are quite similar.
With the Web, though, you're looking at one website with multiple sources of traffic.
LEA is a multi-location, multi-source platform where every location functions like a
website. So McDonald's now has 30,000 websites to monitor. That said, I'm confident
a solution like LEA for a brick-and-mortar businesses will become every bit as common
and essential as Google Analytics for websites.
How can businesses maximize ROI in LBS services?
In order to maximize ROI, first you have to be able to measure it. You need to be
able to experiment with different types of offers-loyalty rewards, group discounts,
sweepstakes-across multiple networks with different promotional tactics. Plus, you
need control groups. Then you can compare sales data, together with other metrics, and
determine the results. This is what our platform enables companies to do for the first
time. In fact, we're working on a case study with a national chain of more than 1,000
locations. The goal is to show what works in location-based marketing and what doesn't.
It all comes down to ROI.
A service like Momentfeed seems reliant upon all of these different services. So I
assume you don't expect one to emerge and take the majority of the check-ins?
On the contrary, I think you'll see more fragmentation not less. It's just the nature of
geography and our diversity of interests. Much like the media industry, I think you'll
have a handful of big players, hundreds of mid-sized players, and thousands of small
ones. Foursquare, Twitter, Facebook, and Gowalla are largely horizontal with a global
footprint. Then you'll have the vertical-interest apps like Foodspotting and ESPN
Passport as well as region-specific apps that will likely be spun out from newspapers.
Remember, only 25% or so of the US even has access to LBS today.
How have Facebook Places and Deals changed this space? How will they continue to?
The growth and success of LBS comes down to three things: hardware, software, and
behavior. Given smartphones and location-aware applications, Facebook is able to introduce hundreds of millions of people to the third thing-the social gesture or
behavior of checking-in. So I think Facebook Places is having a rising-tide effect for the
entire space. I also think that checking-in on Facebook is different than other apps.
There are different motivations, a different social graph. In terms of Deals, we've yet to
see its true potential. Facebook needs to add a few more features and release a Deals
API. Then it will become a powerful force in LBS.
If Facebook or Foursquare offered a similar tool, would that undermine the value of
MomentFeed?
I don't think so. If a company is serious about leveraging this new channel-what we call
location-based engagement or LBE-then every check-in, every photo, every review,
every tweet, and every barcode scan counts. The only way to efficiently manage all
of this activity is through an aggregated solution. Otherwise, it's like a Web analytics
tool that only shows you traffic from Twitter or Google search. Why would you ignore
traffic from Facebook, Bing, and various other inbound links? And why would you want
a different tool to measure each of those?
Thanks to Rob for his time and terrific insights. What are your thoughts on a service like MomentFeed? As a business, you need to quantify your spend in this space. How else can you do that?