Foursquare, Gowalla and Brightkite are highly hyped but have yet to reach their potential for Web marketers. Though just a few million users are consuming such applications each month, the ceiling is high, especially for Facebook and Twitter.
Location-based social networks such as Foursquare, Gowalla and Brightkite
are buoyed by a lot of hype that has yet to reach its potential for Web
marketers, but some 84 percent of users surveyed are not familiar with these
applications at all.
That's the gist of a market research report from Forrester Research analyst
Melissa Parrish, who polled almost 43,000 people in the United
States and Canada
and found that most location-based service users are tech-savvy males who
access the aforementioned applications from smartphones.
Location-based social networks are typically apps that are downloaded on a
smartphone that offers social profiles, status updates and other tools to help
people connect and share information. Most of these apps keep user engagement
high by offering competitive games.
Foursquare and Gowalla let users check into certain locations from their
handheld to win virtual points and badges or even real-world discounts on
products and services. Popular businesses such as Starbucks give free coffee to
Foursquare users who check in enough
That keeps users coming back and provides great exposure for Foursquare,
which can advertise on its existing service. That also creates sales
opportunities for other Web marketers, said Parrish.
Unfortunately, the market is super young. Foursquare, with more than 2
million users, is the only service of its kind with a foot planted firmly
between the digital elite and the average mobile Web user.
Parrish said only 4 percent of U.S. online adults surveyed have ever used
location-based social networks on their mobile phones, with only 1 percent
using them more than once a week.
"The biggest vendors in the space may boast fast growth numbers, but
registered users are still a drop in the bucket compared with the number of
consumers reached with tactics like SMS, mobile search or display media on WAP
sites," Parrish noted.
So who is using Foursquare, Gowalla, Brightkite and other services of their
Nearly 80 percent of location-based social network users are males, and 70 percent
are between the ages of 19 and 35.
Most have gone to college or graduate school or higher learning. These men
tend to be heavy mobile researchers who check their cell phones before making
big purchase decisions.
Parrish also noted the potential impact Facebook and Twitter (with Twitter Places
) can have on this market and advised not to count
out the big technology guns such as Google and Yahoo.
Google offers its Google Latitude
friend-finding service, while Google Buzz for mobile
lets users post status
updates from their mobile phones. Google just hasn't found a way to cultivate
any sort of social network around these services.
Yahoo launched its Fire Eagle
service two years ago and recently acquired
Indian check-in service Koprol.
Location-based services promise to be a big draw at the Web 2.0 Expo in New
York in September.
Attending is Foursquare CEO Dennis
Crowley, who left behind Google and the Dodgeball mobile social network the
search giant bought from him years ago to form Foursquare.
Foursquare in June banked
$20 million in funding to grow its operations and user base.