As South by Southwest bears down, we're seeing accelerated promotion of products that fuse social, local and mobile media (SoLoMo). This follows the success that Foursquare had at SXSW '09, before quickly expanding to its current 7.5 million users.
This also falls in line with the mobile discovery trend long-espoused in this column. It's now taking on new forms with growing smartphone penetration, and a Groupon-fueled hunger for the deals infused with apps carrying the SoLoMo banner.
Mobile discovery, to recap, utilizes the device's portability and location awareness to push content. This evolves from desktop search in combining pull with a new form of push that targets behavior, location, social info, and pre-set preferences.
Over the past few months we've seen various flavors of this develop from the likes of WHERE, Poynt, Loopt, and Google. But Foursquare continues to lead the way as this social local discovery framework underlies almost everything it develops.
"The core utility is simply getting friends to find each other," Foursquare GM Evan Cohen told me. "Building on that, it's the notion of discovering what you should be doing next, or tonight, or tomorrow, based on your tastes, proclivities and what your friends have done."
Foursquare most recently took these principles to heart in version 3.0 of its app. Launched this week, it features enhanced local recommendations, a revamped leaderboard, and a more structured set of specials for merchants to offer.
The recommendations stand out first. Compared to the previous method of pushing tips based on a single check-in, a broader set of relevance triggers are used, including search terms, patterns of past check-ins, and friend activity.
The leaderboard enhancements are also interesting and long-overdue. These should breathe new life into the game mechanics at the heart of Foursquare. Though these first put Foursquare on the map two years ago, the challenge is keeping them fresh.
But perhaps most interesting are the advertiser-facing aspects. Here, a clearer value proposition results from seven categories of specials: swarm, friends, flash, newbie, check-in, loyalty and mayor (each explained here).
It could be argued that without this structure and delineation, SMBs can get confused about how to "use" Foursquare for local marketing or customer loyalty. Simplicity is paramount for SMB advertising and this better accomplishes it.
Merchants can also now run more than one special at a time, and more easily manage specials across many locations (a la Google Extensions). This and other new aspects indicate a clear interest in going after national, regional and local advertisers.
It has already signed up 250,000 businesses in a self serve manner. This will continue to grow based on an easier process for claiming and verifying a business. The total will also grow if Foursquare stays true to its claims to scale further with reseller partners.
This will all remain free for merchants, though I believe Foursquare will flip the monetization switch when it's confident the toolset is fully evolved. This is a huge potential revenue source for Foursquare and it wants to get it right.
The new specials should meanwhile boost Foursquare's appeal to users. Previous specials -- limited to mayorships and loyalty -- have gotten harder and harder to achieve as Foursquare rounds the corner on 8 million users.
Walk the Line
Within an already claustrophobic SoLoMo market, SXSW will be a stampede. But sometime after that, a shakeout is inevitable. Even considering the rapid growth of the mobile web, there are simply more companies entering the space than demand levels will withstand.
So who will survive? Foursquare has the momentum, talent and strategic road map. Facebook Places has sheer scale. And Google is well positioned with deep Places/Maps integration with Android. Yelp also has considerable brand equity in local.
There will be some room within a secondary tier but those left standing will have to considerably differentiate rather than just being Foursquare clones. Look out for Eightbit, for example, which injects a fun retro-gaming appeal to a check-in model.
Others that have potential include SCVNGR, based on proven brand engagement; and Gowalla, based on innovation and solid design. The remaining big question mark will be the Facebook effect; will Facebook Places squash everyone else in the space?
Though "killer" claims make good link bait, that won't be the case with Facebook Places. It will instead mainstream the act of checking-in (beyond 20-something urban foodies), while helping smaller players scale and gain exposure via social sharing.
Another success factor will be how well these services devise the right formula of local discovery. That translates to walking the right line between push and pull. Foursquare, for one, takes a page from other sectors.
"We do some of that now in showing what's around you, what's trending and friend check-ins," said Cohen. "We can do so much more. We see ourselves in some ways as the Netflix or the Amazon for the real world."
Learn to engage customers and increase ROI by distributing your online marketing efforts across paid, owned & earned media. Join the leaders of today's digital marketing & advertising industry at SES London. Find out more ››
*Saver Rates expire this Friday, Dec 13.