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Friday, April 9, 2010

Is Foursquare Relevant for B2B Marketers?

Recently, I’ve been playing around with foursquare to get a better understanding of it, and think about how it might have a significant impact on B2B marketers. Whereas I’m far from a power user, I have unlocked a few badges (sadly, one of my first was the “Jetsetter” badge that is given for checking in at 5 airports), and I’m in strong contention for the Mayorship of Eloqua.

With South by Southwest happening recently, the number of foursquare announcements on Twitter, of people “checking in” made #SXSW a top Trending Topic. Considering that foursquare only launched a year ago at SXSW 2009, this is clearly a phenomenon worth looking at.

Lots of businesses, especially those selling to consumers, are experimenting with special offers via foursquare in order to motivate those in the area to drop in, make a purchase, or accept an offer. However, it’s not clear that there is any relevant parallel of this in the business to business environment. Business buyers for any given organization are much fewer in numbers, do not generally make purchases based on their current location, and are unlikely to be motivated by the style of offers (come in now, save $10) that are viable using location-based advertising.

Certainly, at tradeshows and events, many B2B organizations are experimenting with foursquare, setting up transient “locations” at their booth and offering prizes to people who check in. I suspect, however, that this way of using foursquare in a B2B marketing environment is temporary at best, and will quickly pass.

I was tempted to conclude that foursquare might, therefore, have limited relevance to B2B marketers, but as I looked into what businesses had been tagged in places as disparate as Toronto, Zurich, Brussels, Antwerp, and London, I began to realize that, very quickly, vast numbers of business venues are being tagged. Almost every venue I visited had already been entered into the foursquare database.

The motivation to do this is startlingly small. Users are able to unlock “badges” with colorful icons and creative names like “Far, Far, Away” and “Playa Please”. Whereas it may seem too small of a motivator to incite behavior, the badges are displayed to the world, and it clearly is driving 100s of Millions of venues around the world to be tagged. I will even admit, it’s a bit addictive, and I found myself looking into the meaning of the badges to see how I might “unlock” the next one.

And that’s where the true opportunity of foursquare gets revealed.

The badges are unlocked for all sorts of very specific behaviours, such as checking in at 25 pizza restaurants. In order to be seen as having done these specific behaviours, of course, the venues you visit must be tagged as such. Because of this, there is a motivation on the part of every user to correctly (and with great detail) tag each venue with its correct type. Foursquare uses up to three levels of increasing detail to tag each venue – a very detailed categorization.

As a B2B marketer, especially one selling to very small businesses that are owner-run and not adopters of technology, this (theoretically) makes available a highly targeted data set. Want to know how many ship’s chandlers are in the port of Zanzibar? (an example that came up in a recent conversation I had with ShipServ’s John Watton). Foursquare may soon have the best data set. Currently, they don’t collect contact information for those businesses, but it doesn’t seem unreasonable to apply the same model to acquire that data.

This proves a challenging problem for the classic providers of data who employ research teams to keep their data up to date. The more remote and small the businesses are, the worse the economics are in keeping this data accurate and current. Obviously, Google has been working on this problem too, from a different angle, by allowing business owners to update their own information on Google Maps. However, the dynamic is very different. In foursquare’s model, high-tech enthusiasts with iPhones and Blackberries update the data on multiple locations based on the motivations of a game, while in Google’s model, individual small business owners update their own information on Google based on their own business motivations.

Looked at side-by-side, the data provider models are very different:

Classic: Data provider employs researchers to update data on businesses

Google: Data provider allows business owners to update their own data

Foursquare: Data provider motivates population of enthusiasts to update data on local businesses

It’s not clear which one of these models will be able to collect the most up to date, accurate, and deep data on smaller businesses. It’s equally unclear whether foursquare will be able to leverage this data set to enable B2B marketers who target these micro-segments. However, as I think about what effect foursquare will have on B2B marketing, it is this effect that seems most promising.

Models that leverage the network effects of millions of people can be immensely powerful, and it appears that foursquare has hit on one of these models for gathering deep, location-based information on businesses around the world, that may be extremely valuable to B2B marketers who need this data set.

I would love to hear comments from other data providers, or anyone familiar with the data space, on how they see this model evolving.

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