Location-based marketing: Those are the industry’s latest buzzwords. Now Facebook, with 500 million users, has launched its Places application, the popularity of location-based services could spread like wildfire. Other social networks, such as Foursquare and Gowalla, have garnered a few million users worldwide, and have already started to harness the power of location-based marketing, in a move that Yousef Tuqan Tuqan, CEO of Flip Media, says is “amazing and scary.”
“There’s a real revolution that has taken place in the past two years with the concept of location-based marketing,” says Tuqan. “We carry smartphones that always know where we are, and are always connected to the Internet. So from a marketer’s point of view, marketing messages are much more instant and personal, and much less expensive.”
In the US, Coke Zero has created a Foursquare account to promote their sampling tour and street-team events on university campuses and at sporting events by sharing updates with their Twitter followers. Starbucks, the History Channel, and New York Magazine, have also invested in location-based social networks early, by using them to reward loyalty and provide insider information. Starbucks in the US reward loyal customers with a “Barista badge” and went nationwide with their promotion, offering whoever unlocks the Mayor Offer a $1 discount on a Frappucino.
Closer to home, Dubai-based restaurant Wild Peeta was one of the first companies to venture into location-based marketing, when it used Foursquare to promote itself. Co-founder Mohamed Parham says he set a challenge: Foursquare users had to check in to the restaurant enough times to become its “mayor,” the user with the most check-ins. The mayor would then get a free drink on every visit. Wild Peeta has 82 followers on Foursquare, and Parham admits that the application’s following in the region has a long way to go, but that the promotion generated interest in Wild Peeta. “Whereas the sales may not be tremendous from having this sort of promotion, the PR is,” he says. “It’s valuable to any business, particularly small businesses.”
Baher Al Hakim, “master chief” at Cloud Appers, a Dubai-based app development company, predicts it will take the region a couple of years to catch on to this trend, and that while early adopters have a great advantage, most companies can be excused for not experimenting with location-based marketing yet. “Most businesses are justified in not using it heavily. There are an estimated 6,000 to 7,000 location-based social network users in the UAE, of which about 2,000 are active,” he says.
Lina Vasiloudis, director of marketing and communications at the Beach Rotana Hotel & Resort in Abu Dhabi, has also used Foursquare to promote one of the hotel’s restaurants using a similar mayorship challenge to Wild Peeta’s, but says that the region is still very inexperienced with the trend. “Companies have realized that they need to do something to communicate with their customers on that level, but it is still quite an undiscovered territory, and only few know what to expect if that border is crossed,” says Vasiloudis. “I think not having definite measurement tools makes it harder for marketers to convince senior management to venture into this new land. But maybe in a year or two location-based marketing will actually form a very large part of one’s communication and interaction plan – it certainly looks that way.”
