How Snapchat’s, Facebook’s Location Capabilities Change the Game for Small Businesses

The decline of the retail industry has been discussed almost to death in the news lately. The consensus seems to be that the rise of Amazon and other e-commerce businesses has made it nearly impossible for large retailers to compete in today’s marketplace. But what about small businesses? As more and more people see Amazon as a one-stop shop for all of their needs, from toilet paper to flat-screen televisions, what tools are available for small businesses to help them fight back? Luckily for those small businesses, social media platforms like Snapchat and Facebook are providing some relief. Snapchat has been in the news lately as it continues to beef up its advertising tools and location capabilities. Besides Snapchat’s decision to monetize its location capabilities by introducing Snap to Store—a set of data tools that allows marketers to measure how many users are going to stores, restaurants or other locations as a direct result of seeing their ads on Snapchat—it also made some strategic location-focused acquisitions. By purchasing Placed, a company that tracks foot traffic to stores, as well as social map application Zenly, Snap Inc. is rebranding itself as the company that will help resolve the woes of retailers. But Snap is not the only social media platform getting into the location space. Facebook has also introduced tools meant to help retailers track offline conversions and bring people into stores. The amount of location data that apps like Snapchat and Facebook collect, as well as the growing competition between the two social media platforms (amplified by the introduction of Stories on Instagram), has proven to be exactly what small businesses needed to stay in the game. Scale is one of the biggest pain points for small businesses. Getting in front of a large audience with a small or nonexistent budget was out of reach before social media platforms came along. Now small businesses have access to organic or targeted audiences at their own discretion. The game continues to level-up as the social platforms themselves work to expand their scale through strategic partnerships that elevate their user engagement strategy with users willing to opt-in to participate in data collection for something they perceive as added value, similarly to enormously popular augmented reality game Pokemon Go. This allows smaller companies like mom-and-pop stores to embrace Snapchat and Facebook as more than just social media channels, but as valuable marketing strategies in much the same ways that big brands can. This has never been the case before: Previously, television ads were out of reach for most companies, and print ads were affordable but less effective when targeting consumers. The benefit of using Snapchat’s and Facebook’s location services is that they can be tailored to whatever the company needs, whether it’s targeting a group of individuals or trying to encourage people to visit a specific store location. I can’t state enough how important the user engagement focus is here. Snapchat’s geofilters, for example, are a great way for any company to get into the location game, partly because they’re relatively affordable (as little as $15 per day) and because they encourage consumers to engage with the brand. Geofilters allow small companies to take advantage of location services in much the same ways as bigger brands do. If you’re a small company, you know that the people who end up using your geofilter are spreading the message to their friends and family and increasing awareness of your brand. In order for these methods to be effective, the data being provided by Snapchat and Facebook must be reliable enough to target consumers effectively. The walled garden nature of Facebook, in particular, has come under scrutiny, as it has had significant problems recently regarding the accuracy and efficacy of its advertising methods, with several big brands opting to reduce their ad spend on the social network until more accurate metrics are released. Snap’s Snap to Store and Snap Map are still relatively new, so it remains to be seen how effective they are in comparison to Facebook’s advertising tools. Either way, it’s clear that brands have started holding social media metrics to much higher standards than before, and that transparency is more important than ever. What Snapchat and Facebook are doing with location data confirms that companies understand how important it is to build a relationship with a consumer depending on where they are and how they’re feeling, as well as determining the best way to reach these users. In essence, they provide a new way of building relationships with consumers by playing on the private link between consumer and brand. Every time a person shares a post using a geofilter with a brand’s name, they share a little bit about their personality while also contributing to people’s perceptions of that brand. Right now, the main advantage of using these tools is that they allow any company, regardless of size, to use location data in order to raise awareness and attract more customers into its stores. Facebook’s and Snapchat’s location capabilities have been successful in that they have level the playing field for the underdogs. Small and midsized businesses are no longer operating in a vacuum or reliant on direct mail to reach their audience. Facebook and Snapchat have a unique advantage as they collect large amounts of location data and can serve SMBs. The interesting question now is, since they can’t access the data in these walled gardens, what are other marketing and advertising platforms doing so that they don’t lose out on opportunities in this hungry market? Thomas Walle is co-founder and CEO of global proximity platform Unacast. Image courtesy of scanrail/iStock.