Getting Beyond The Badge: Making Check-Ins Pay
I have to admit, check-ins never made a lot of sense to me. I understand how there is a slice of people out there who can't wait to share where they are and what they are doing with that ersatz friend network we call social media. But this model always seemed to me an effort at changing people's behavior more for the sake of media and marketing companies than for one another. Granted, I am the guy who chuckled at cheerleaders, snorted at school presidents and generally disdained joiners and boosters of every flavor in high school. As my wife and daughter are quick to point out, Dad is a cave dweller with the loner psychological characteristics of the Unabomber. I am just a bit more lovable. So, when it comes to a lot of social media, I get that I don't get it.
But even with my predispositions aside, rewarding check-in behaviors with "badges" and virtual stickers, always felt like such an empty and silly Pavlovian-style Scoobie Snack model, it seemed to mock people engaging in it. I kept waiting for check-ins and other declarations of presence to pay off with some more meaningful value exchange. That is part of the appeal of LocalResponse, an ad network that aggregates both explicit and implicit public check-ins from across 30 of the usual suspects: Facebook, foursquare, Gowalla, Twitter, etc. The company works with brands and local venues to deliver to users a direct and immediately relevant offer in real time when they check in explicitly or make some kind of public reference to a location. For now it works mainly through Twitter to communicate with users. In a partnership with a national chain of gyms, for instance, checking in to one of the gyms will return to users via their Twitter feed an offer from Coke brand Powerade Zero inviting them to enter a contest. In another effort with Kraft, checking into a grocery store triggered a coupon.
The ideal here is to put the brand into a rea- time conversation with the user at their point of need. They try to get beyond the creepy factor (why is this brand tweeting me?) by having the venue itself address the consumer with the offer. "The message is coming from 24 Hour Fitness, not Coke," says Kathy Leake, the company's president and founding partner. "That is really important for context. We pull in the original check-in as well as the brand's response to that check-in so that creates that level of context and conversational elements." Advertisers have the option of targeting only those who explicitly check into a location (and elect to share that check-in publicly) or those who implicitly check-in by mentioning a location or a brand in in a Twitter post. Increasingly LocalRepsonse is also targeting sentiments about brands or products that people post.
The problem with the local check-in apps so far has been building some kind of scale at the local level and having to rely on that small slice of people who actively engage in the kind of check-in activity that actively repels people like me. According to Nihal Mehta, CEO, the network achieves scale mainly by aggregating "inferred" check-ins. "Foursquare is only 3% of the data," he says. "The vast majority, 85%, is not from check-ins but from using natural language [analysis]. Last month we aggregated over a billion inferred check-ins." The company sells on a CPC basis and a marketer might pay between $1 and $5 per click. The initial test budgets (about ten campaigns -- most launching this month) have been between $10,000 and $100,000, but clients like Coca-Cola are coming back for more.
As a business model, the CPC approach is scalable for the company because of the large available inventory and the response rates from contacting people in real time and in response to their own postings. "The average across campaigns to date has been 25% to 40% click-through rates," says Leake. Of those who click through, 30% to 50% have been redeeming the offer. Even better perhaps, at least so far, the mode of approaching and addressing consumers is not pissing them off. Leake reports an opt-out rate of .008%.
Of course even with the expanded reach of engaging inferred check-ins, an ad network like this is still limited to that share of people engaged in social media expression. Speaking for the legions of socially repressed, for all of its hype and reach, social media remains at best a spectator sport for most of us. My daughter continues to creep me out by insisting on having one-to-one conversations with me on her Facebook wall -- which feels to me like we are shouting personal family exchanges across a shopping mall -- or having a loud conversation about matters that are irrelevant to anyone but us on cell phones in store aisles. Of course if my last visit to Target is any indication, we are all privy to one another's conversations now.
"You gotta get out more, Dad."
Having a personal, one-sided conversation into mid-air and broadcasting personal sentiments on a public street to all used to be associated with a range of emotional disorders. Now it is just another walk down the street in Bluetooth Nation.