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If 2009 was the year when “geo” became a buzzword and gathered momentum, then 2010 will be the year when location-based functionality becomes commonplace.  “Where are you right now?” might end up being the question of the year 2010 among marketers as location- specific services such as Foursquare become more popular.

Foursquare has about 600,000 users – still a niche. But the company says its user base is growing by 60 to 70 per cent per month.  I saw these numbers and reached out to one of my peers, veteran media planning and placement expert Ira Bass.  A former marketing VP at Tandy Corporation, Ira’s bought Super Bowl ads.  He’s headed media practices at highly-respected Southeast agencies Rockett, Burkhead & Winslow and Trone Advertising.  A couple of years ago, he went out on his own, founding boutique shop IB Media.  Ira fully embraced social media strategy for himself and his clients and has become one of the go-to experts in the Southeast.  Anyone can open a Twitter or LinkedIn account, but Ira really understands how to build brands with these tools. 

In your words, what is Foursquare?

Ira Bass (IB):  Foursquare is a social media platform that combines status updates with a gaming element.  Local establishments can use Foursquare to reach out to prospective customers.  Foursquare can help them better understand who their customers are, encourage loyalty and build stronger, more efficient promotional efforts.  Friends like you and me can stay connected, share status updates and our experiences at a micro, local level.  We can use the gaming element to ”check in” to establishments, collect “badges” and elevate our status to levels like “Mayor”.

Give me 3 reasons why marketers should care about Foursquare.

• Free Promotion:  Can’t beat the price, but you have to be creative, timely and relevant.
• Building a database :  A great opportunity to do this quickly, cheaply and with more granular data
• Know your customers better:  Gather data, fine-tune customer experiences based on real feedback

Is Foursquare a B2B or B2C marketing tool?

It’s a hybrid of both, plus a little C2C- consumer to consumer.  There’s lots of B2C opportunity for promotion, tons of choices.  The C2C play happens when people like you or me recommend an establishment to our network. 

Big brands are going B2C with Foursquare already.  Starbucks launched a Foursquare campaign where customers earn the “barista badge” after checking in to five separate shops.  Their plan is to use Foursquare data less for business intelligence and more for getting feedback about what customers like and do not like, to take “the pulse of the experience” in physical stores in real time.

Coffee shops have been the classic example for mobile coupons — when someone walks by a shop, they get a coupon for a free coffee, for instance.  Starbucks may do that, but they could use Foursquare to provide even more meaningful prizes, like invitations to special events, photo sharing or online reputation scores.  The Marsh Café in San Francisco is running a pretty creative one right now- not only does the “Mayor” of the venue get free drinks, but everyone who checks into the venue on Foursquare and shows proof (on your iPhone or other mobile device) gets $2 off a ticket to any performance that night.

Businesses can certainly market to each other, but any real B2B reach is limited since Foursquare is local.  Not sure if there’s a whole lot of value there- a phone call would still be better.  Now if two like-minded businesses are located in the same physical building, they can launch co-branded campaigns or individually market directly to consumers to draw people in. 

Let’s talk about how to use Foursquare for more than just simple promotions or status updates.  The first thing that comes to my mind is using it for competitive analysis or for building geography-based databases for marketing and sales.

That’s just the tip of the iceberg if you want to be creative.  Think about how you could use this at a restaurant or other retail establishment.  Employee meetings could feature Foursquare feedback and reviews to drive home the importance of good service.  Maybe someone got a cold steak over lunch, didn’t tell the waiter, but posted his experience on Foursquare.  Now 200 people know and maybe 50 of them decided not to have dinner there.  This is important information, it’s happening in real time.  

Another business use for Foursquare could involve scouting for a new store location.  Knowing where your audience is physically is one thing, but Foursquare can help you extend your demographics.  The Showmars franchise here in Charlotte is a great example- no two of their locations are alike, they range from utilitarian to family-friendly.  However, each looks perfectly cut out for the clientele in that location.  You’ve got to do better than the cookie-cutter approach to stand out.  A tool like Foursquare gives you insight beyond just a zip code and can help businesses build an experience that resonates.

These services were at the forefront of talk just last week at South by South West (SxSW), an annual gathering of folks from technology, music and movie worlds.  Dennis Crowley, co-founder of Foursquare, said that during the five days of SxSW, his company signed up approximately 75,000 new subscribers.   This growth is great, but what about overload?  Are all of these social networks and update platforms getting to be a bit much?  What is your opinion on consolidation and/or integration of these platforms?

I may be dating myself a little here, but a long time ago, there were 3 stations on your TV.  People were concerned about overload when that number increased to 7.  Then cable came along and now you can pretty much watch anything you want, anytime.  This is headed in that direction- the best tools that are tailored to your particular interests will be the ones that you use.  As far as integration vs. consolidation goes, I’m an integration guy.  I use a single tool that integrates my Facebook and Foursquare profiles along with Twitter and LinkedIn.

Final Thoughts from TMM

First of all, thanks to Ira Bass for spending the time and helping me get up to speed on Foursquare. 

Structured datasets such as those being collected by Foursquare are going to become highly effective resources for cost-per-action advertising or even e-commerce revenue models.  A smart hyper-local advertising platform, coupons or even sponsored badges are possible ways that Foursquare could make money.  Foursquare has already announced plans to introduce free tools for businesses, like statistics about customer behavior and the ability for employees to interact with customers on social networks. 

So “where are we” right now when it comes to geo-marketing trends?  I believe 2010 will see the emergence of two major trends that are going to gain traction in years to come:

• Location-based ads will become mainstream as advertising and the mobile web become location-aware.
• Brands will start to use location-based apps to drive sales and marketing efforts.

Plenty of others (including Google) are working on similar ideas surrounding location-based coupons, but the Foursquare idea has different potential because it’s a more proactive use of location-based services.  On one level, Foursquare is more of a game, and some people use it to obtain a high score and get badges (for checking in certain places). That’s different from being in a place like a grocery store because you’re shopping as you normally would, and seeing a coupon pop up.

And the badge aspect contains more possibility for the service.  I’ve had a number of conversations with people in the advertising space who think that sponsored badges which center around events (like SxSW) has real potential.

Like Twitter and Facebook, Foursquare taps into our inner exhibitionist self.  It allows everyone to be an arbiter of taste, so it’s only a matter of time before it’s discovered by everyone from dithering fashion editors to pro athletes and pop stars.  And when that happens, yet another tech pop phenomenon will be born.