• by Brian Wool , May 12, 2010

Although I can't say that I am a mayor yet at any local Chicago establishments, visiting my favorite merchants has never been more rewarding. That is -- since location-based social networks like Foursquare, Gowalla and SimpleGeo have popped up allowing me to check in, provide reviews and be rewarded with badges and discounts.

As mobile phone and social network adoption continues, these applications have a substantial opportunity to capture more users and advertisers with a solid strategy and monetize their products. Like other local search platforms, content is king for these companies. In order to be successful, it is imperative networks like Foursquare and Twitter, who also gives users the ability to turn on/off latitude and longitude, start with accurate local business listings for consumers whenever, wherever.

Accurate listings information is crucial

Checking in and notifying "friends" where you are on social sites isn't very interesting if you are sitting at home watching television, however, if you are trying a new restaurant in the neighborhood, local, user-generated content becomes more compelling. Friends and followers want to know how is the food, ambiance, should I try it out?

In order for location-based applications to succeed with monetization, they should make correct local business listings a #1 priority, ensuring that duplicate listings do not exist and that information is up-to-date and correct. Otherwise, these applications will lose appeal.

A critical issue for all location-based networks is verification of the venue information as a way to prevent duplicate and/or wrong listings information. Read through the posts on getsatisfaction.com for merging and deleting listings and tips for fixing spelling or other errors on Foursquare and you will see the problems cropping up related to local listings venue information.

Monetization ability

So far, local businesses are showing interest in location-based sites because it adds another layer of social interaction with frequent and prospective customers. This engagement will present many monetization opportunities if these sites can get control of the local user demographic info provided via check-ins. To handle this, many speculate that location-based sites will soon offer a dashboard with sentiment analysis where businesses can identify what consumers are saying on sites regarding their products/services ultimately giving more opportunity to create targeted campaigns. This information can be very powerful as ads can be tailored to specific audiences and sent through email, SMS and/or display ads -- very similar to Facebook's ad targeting. Here is a chance to really get to know the likes/dislikes of consumers at a granular level.

For example, if a location-based site knows I am in Chicago, specifically near the Magnificent Mile, and knows my latitude and longitude it will make a huge difference in recognizing whether I am outside of FAO Schwartz getting ready to shop for toys or approaching Tiffany & Co. to buy jewelry for my wife. If I am about to enter Tiffany & Co., this would be a great opportunity for Cartier to serve up an ad or another high-end store. Location-based networks give advertisers an incredible level of granularity and opportunity to really hone in on potential buyers.

Great opportunity for local and national businesses

Beyond targeting capabilities, location-based services provide local and national businesses many SEO benefits. Google and Bing maps are showcasing Foursquare venues when people search locally. Also, for national advertisers, targeting potential at the hyper-local level is now a reality. There might be a day where a company like Nissan for example will not need a mass advertising campaign because they can target online ads to local shoppers with families, environment-focused consumers or those interested in luxury cars.

As with all local searchable content, business listing identity management is key for advertisers. Businesses need to take control of the data that is out there on various search platforms and the user-generated content that is available through social sites and applications. We anticipate many partnerships will take place in this space to merge already popular platforms (Facebook, Twitter) with those that are successfully deploying the local-social gaming experience (Foursquare, Gowalla). In the end, what will really tie everything together is access to accurate and verified local search business listings.