• by Steve McClellan  @mp_mcclellan, August 26, 2011

Judging from some of the headlines earlier this week, Facebook was phasing out its mobile "Places" check-in feature and conceding the location-based marketing battle to sites like Foursquare and Gowalla.

But Facebook and a number of ad executives who have quizzed the social network about its plans say it's just not the case.

In fact, agencies say that what Facebook is actually doing in the space may scale their location-based marketing capability in a way that could motivate a majority of their 500 million global members to add location data when using the site. That would exponentially boost the amount of spending marketers do in the location-based marketing sector.

No doubt there was a lot of confusion in the first couple of days after reports that Facebook was killing off its "Places" feature. Marketers and the agencies were scrambling frantically to find out what impact -- if any -- the changes would have on current campaigns.

"There was a lot of concern about the short-term impact because of the investments and marketing objectives now in place," said Jordan Bitterman, senior vice president, media marketing and content for Publicis Groupe's Digitas. For now, "we're told nothing changes," and that current campaigns can proceed apace without alterations.

Essentially, what's changing is that location functionality is being integrated throughout the Facebook offering -- so that members can, for example, tag their location when they update their status, whether they're on a laptop, phone or any other portable device. And regardless of where they are -- a store, Central Park or the Golden Gate Bridge.

"This is not a retreat in any way," said Michael Nicholas, chief strategy officer at Aegis Group's Isobar. Rather, the move is essentially an "embedded tag strategy that's about getting more people to put more location data into Facebook." Instead of a single mobile feature where users have to manually check-in, he added, "they're putting location into everything."

If successful, the new strategy could dramatically elevate the investments that marketers make in location-based services, he said.

"If this thing scales, it will be enormously valuable to marketers," he said. "It superpowers the kind of localized Facebook search," especially when combined with incentive deals, coupons and other approaches.

From a marketing perspective, the change in strategy is overdue, given Facebook's lack of location data, added Nicholas. "Right now, Facebook has a global location platform where it doesn't really know where anyone is."

Chris Wallace, associate media director at Resolution, agreed that the changes should be a big plus for marketers. "My prediction is that consumers will respond well to it," he said. "The check-in piece of it was a reaction from Facebook to Foursquare and Gowalla, and now Facebook is going a step further and adding Places to every piece of functionality. So you won't have to go to a different app or a different section of the Facebook application. You can have your location anywhere you want and do it all in one place."

Also, marketers will get more data and a clearer picture of what consumers are thinking about them, Wallace added. "And not just in-store interaction, but what they're saying after a visit or who might be planning to go to your store tomorrow. What they're doing in many ways is moving toward the Google model," he said.

A Facebook rep added that while the mobile-only "Places" feature is being phased out, "the way we think about location will continue to evolve. People will be able to continue to tell their friends where they are. Now a "Place" becomes another descriptor to add to any post. It can be a place you are, have been, want to go, or just want to talk about. It was already possible to talk about location in this way on Facebook by tagging Place Pages from the Web. We've expanded this functionality."

In effect, adds Bitterman, "Facebook is playing a game of leapfrog where they're skipping over the manual check-in in favor of an automatic check-in," -- albeit one where members opt in.

"Checking in is kind of laborious, and why would I do that if I could just have my phone do it for me?" he said. The more user-friendly the functionality is, the greater likelihood more people will use it, he added. "Ease of use equals scaled participation."

Bitterman believes the Facebook move is just the latest move in an escalating battle among platforms looking to improve their competitive position in the space. "In the next 18 months, we'll probably see a rapid expansion of location-based marketing," as competitors like Foursquare respond quickly with innovations of their own, he said.