Location-Based Social Networks: Amadeus Consulting This Week in Technology

Computers & TechnologyNetworking

  • Author Todd Mcmurtrey
  • Published June 15, 2010
  • Word count 1,197

In last week’s edition of This Week in Technology, we briefly discussed location-based technologies such as Foursquare and Gowalla as a "foregone conclusion," meaning that everyone had already accepted it and that there really was not a reason to discuss it further.

However, last week I also met with the director of one of the area’s leading public relations firms, who stated that he "doesn’t get why anyone would want to use these." This leads me to believe that while it may be old news to some people; it is entirely alien and unfamiliar to others.

So for this week’s edition, we’ll take a look at location based technologies, integration, and the potential value it has for businesses that choose to embrace them.

What are Location-Based Social Networks?

Most smartphones are GPS enabled, meaning that you can pinpoint your location fairly precisely. Even phones that don’t use GPS can find their location within a location by using cell towers to triangulate their position. The miniaturization of GPS and integration into standard mobile devices provides users with the ability use their location to quickly gather pertinent and relevant information about the area. This information can be valuable to you as a consumer in many ways, and it opens up the door for interesting social media and information opportunities.

This information is often integrated into custom applications (apps) which enhance the features of the phone to provide additional value. For example, some let you track the location of your pets (should your dog ever get lost), whereas others let you monitor real-time traffic on the road ahead so that you can plan alternate routes to your destination. This has been implemented hundreds of different ways and includes everything from weather forecasts, finding the nearest Chinese food, or helping you find where you parked your car.

Location-based social networks allow people to keep in touch with each other based on their location. Many of the services allow users to "check-in" to locations as they visit them, and then can broadcast this information to friends or networks, depending on the user’s preferences. These networks also function to help people find out "what’s hot" in the area, or to get involved with local events or businesses.

Why do people use it? Aren’t there privacy concerns?

Privacy is a concern, but not as much as you might think. Location-based services have a default privacy setting that require people to opt in to public sharing options, meaning that you everything is private until you change it, and you can still benefit from all of these services without sharing your location with the world.

These services are becoming increasingly popular as illustrated by one service, Foursquare. Foursquare is only about a year old, but already has more than 600,000 users and is expanding rapidly. For example, last week it added almost 10,000 new people to the service every day, and registered more than 347,000 "check-ins" in one day alone.

However, there are many other location networks besides Foursquare, and many more are soon coming. Specifically, Facebook is expected to announce its own location-based service in the coming months, which brings location-based services to more than 400 million users. In other words, location-based networks are only going to get bigger.

The reason people use these services vary depending on the individual. However, in most cases, it is for people who want to let others know where they are or what they are doing. If you prefer yourself to remain hidden, you just don’t check-in. Otherwise, it’s an easy way to let people know what you are doing, where you are, or what is going on.

Many of these services also (optionally) can update directly to Facebook or Twitter, to better broadcast what you are doing. For example, some major attendees at last week’s SXSW Conference used it to broadcast which events, presentations and speakers they were attending at any specific time, so that their fans, readers or blog followers could keep up.

This week, a service called Check.in just launched a beta version of its site which even allows people to check into multiple applications with one simple click, rather than having to go through each one individually. Sort of a TweetDeck for location networks.

How Can Businesses Benefit?

Businesses have a unique ability to become a part of the craze. Just like other social media applications have specific options for business identities (Facebook and Twitter specifically), location-based social networks leave the door open for businesses to participate.

In fact, businesses are a key link in location-based social networks and people expect them to participate. Or perhaps "expect" is too strong of a word, but people are definitely interested when businesses play along.

Since location-based networks are inherently public, and people know exactly what they are sharing, they do not feel intruded upon when businesses use the same services to engage them. Many businesses have also reported huge successes when offering discounts or other benefits to those that use location-based social networks to check into businesses.

Another benefit is the data that businesses can gather from these networks. For example, Foursquare recently launched an analytics service that lets businesses monitor demographic data on who checks in.

In an interview with The New York Times last week, the director of business development at Foursquare, Tristan Walker, said that the new service was intended to help local merchants run their stores by giving them more information about their customers.

"We’re trying to give businesses more retention with current customers and the ability to add new customers with specials," Walker said.

This lets businesses see a range of real-time data about their users, including male-to-female customer ratios, popular times of day and other information. This, and similar services, let merchants monitor and engage customers on an individual level.

For example, it lets business offer custom and extremely targeted coupons or sales, as well as offering other services. It can also help track the effectiveness of advertising campaigns by tracking where people come from.

In other words, as more people use it, and more businesses support it, location-based social networks become an analysis of human behavior that customers and merchants can use to meet each other’s needs.

Another benefit is the snowball effect of social advertising. As people check in to your business, they are essentially advertising and promoting your business to their friends. Engaging these people and providing a positive experience to them can further expand the recommendation to their friends and distant networks.

According to Quantcast, a majority of users of also fall into the 17-36 year old age category, have a good mix of males and females (trending slightly male), and appeals to people with college or grad school educations. Or in other words, it is hitting a very mainstream audience of well educated people who tend to be influential among their peers.

Of course, this all depends on the willingness of people to use and share these services. However, as Google, Facebook, Twitter and many others are planning (or rumored to be planning) to launch similar services, businesses will have more opportunities to get involved.

About Todd McMurtrey

The marketing team at Amadeus Consulting considers it part of their daily tasks to stay on top of what is going on in the technology marketplace. It is important to our company culture to be technology thought leaders, but we also want to share our knowledge and insights with readers excited about the latest and greatest tech news in the Tech Market Watch blog.

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