Dominant geo-location app Foursquare announced recently the launch of its new magnetic marketing, promoted updates feature. With 20 pilot partners including the ubiquitous service chains of Hilton Hotels, Walgreens, Lowes and Best Buy, Foursquare hopes to use a detailed algorithm assessing your interests to suggest special services, deals and products within easy walking or driving distance. The new feature is important for two reasons: 1. It’s an execution of “magnetic marketing” in an iteration we haven’t really seen before and, 2. It’s Foursquare’s first step towards monetizing its product.
Inventorspot offers us the following definition of magnetic marketing:
Magnetic marketing is when the consumer and brand are drawn together at the right time and the right place, without the need for either side to take an aggressive action. Like a magnet, the customer and brand come together naturally because the mutual attraction is that strong.
Although Groupon’s mobile app features “Now!” Deals with distance to your location factored in, Foursquare is taking the recommendations a step further by evaluating the types of places you frequently check in and letting you know if one of your promoted updates is a place or service your fans have visited or recommend. This capitalizes on two major things consumers look for when making a purchasing decision: convenience (location, in this instance) and endorsements from those in their social circle.
Retailers pay for this customer engagement tactic in cents per action asMarketingPilgrim reports. Other magnetic marketing tools such as Flip.to have produced as much as a 66-times ROI for their clients so hopes are high for the effectiveness of Foursquare’s new tool. Reports on the 20 pilot partners are certain to be in soon and Foursquare hopes to expand the feature to all one-million businesses on their platform. The biggest question yet to be answered is how Foursquare’s users will respond to the information farming and advertising now blatant on the once un-monetized app.
As a consumer, this shift is one that seems inevitable, but I’m most curious to see if Foursquare will succeed in knowing their users well enough to make this new feature seem like a service instead of a nuisance.
Filed under: Location Based Marketing