Marketing Experiments Emerge Using Facebook Places

A little over a month after Facebook made its long-awaited entrance into the location space with Places, experiments from advertisers and local businesses looking to market via check-ins are starting to emerge.

In one of the more creative takes on Places, Nike recently gave “Destroyer Burritos,” or fake burritos stuffed with branded athletic jackets, to fans who checked into a Portland-based Korean taco truck.

Other examples of Places marketing have been a bit more conventional, involving discounts for check-ins. A Silicon Valley shopping mall offered a 15 percent discount on clothing from Betsey Johnson or a chance to win a pair of Jonas Brothers concert tickets to customers who checked into the mall’s Facebook Places page.

But there are many more possibilities, as location-sharing could fundamentally change accountability for advertising.

Basic use cases:

1) Deals in exchange for a single check-in to virally market a business to new customers. This is fairly standard and was pioneered by earlier location-based social networks like Foursquare and Gowalla. In exchange for a single check-in, a local business offers a free good or discount. In turn, the check-ins enable local businesses to experience the same kind of viral marketing that helped fuel the growth of less tangible services like social games and apps on the Facebook platform.

2) Deals for multiple check-ins to earn customer loyalty. Foursquare’s mayorships were a pioneer for this. If a user checked in enough times, they’d win mayorship of a local business and were sometimes entitled to free goods or discounts like free drinks. With Places, a business could turn a “Buy 10 Get One Free” card into a “Check in 10 times, get one free” offer.

3) Timed check-in deals to help make store traffic more stable. A store could incentivize customers to check in during hours of the day when foot traffic is weak.

4) Group check-in deals to fill a business with a crowd. We haven’t seen one with Facebook Places yet. But using Foursquare, a tea shop in Brighton, England, awarded a deal if enough customers appeared to trigger the swarm badge, which you get if you and 50 people check-in simultaneously. One could imagine hyperlocal variants of this — a happy hour deal triggered at a nearby bar if more than a certain number people check in on Facebook.

More complicated, but intriguing:

1) Using Facebook’s public friend lists and check-ins to track referrals in a social circle. If a friend gets, say, three of their friends to subsequently check in, a business could offer a discount.

2) Sending local deals from nearby businesses when a Facebook user checks in. Yelp already has a version of this in their mobile app where users can see “Nearby Offers” when you search for places to go. But we could imagine richer variations of this provided the market is saturated enough with local advertisers. You could imagine that Facebook — knowing your tastes and the friends you’re with — might be able to push local deals that match your interests the instant you check in.

3) Cost-per-check-in advertising: A local businesses could pay for advertising based not only on impressions or clicks but on actual visits or a certain number of visits. A local coffee shop could buy an ad that reaches out to nearby residents and users of Facebook and pay only if those users turn into customers who “check in” at least once.

It could also get more sophisticated, tracking whether a customer ultimately become a loyal one. Some cost-per-install advertising networks for social games and apps already track conversions to a greater extent — e.g. does a user who clicks through on an ad eventually become an avid player of a game or level up to a certain point?

The same idea could be applied to local advertising so that businesses only pay for an ad when a customer becomes a loyal one with multiple visits.

4) Changing the emerging social buying market.

In the span of a year and a half, a cohort of social buying companies have emerged, allowing people to find local deals if enough people sign up. One of them, Chicago-based Groupon, has even snagged a valuation of more than $1 billion.

“Places is going to open up a whole new different types of daily deal,” said Jim Moran of Yipit, a startup that aggregates deals from more than 130 providers. “Businesses want transparency around whether a deal brings in repeat customers.”

Right now, customers of these social buying startups use either printed vouchers or codes displayed on their phone screens to redeem their coupons. The local businesses and the social buying startup usually split proceeds.

Some social buying startups are beginning to incorporate check-ins into the redemption and payment process. One startup called ScoutMob offers deals free to consumers (unlike Groupon and LivingSocial, which charge users upfront), and then charges the local businesses only when a user checks into the restaurant on its app to redeem the deal. Another location startup, SCVNGR, partnered with social buying startup BuyWithMe to reward extra behaviors like taking a photo or sharing an update about the place after checking in.

5) Integration with virtual goods. Again, we haven’t seen anything yet involving both Places and virtual goods but other startups in the space have experimented lightly. San Francisco-based Booyah offered branded H&M virtual sweaters in exchange for check ins, for example.