SBJ/November 28-December 4, 2011/In Depth

Checking out check-in platforms

As location-based apps catch on with consumers, marketers map out ways to use the technology to find new business

There is, of course, the ubiquitous tweet. The ever-popular Facebook post. YouTube videos are everywhere. Even the business-focused LinkedIn update has a degree of universal cachet.

Now, pushing hard to stand along side Twitter, Facebook, YouTube and LinkedIn as an equal, and perhaps superior, player in the social media space are a wide array of location-based, or “check-in” platforms.

Location-based platforms are used to unlock marketing offers, help drive ticket sales, and deepen fan connections.
Photo by: Foursquare
Operating thus far with only a fraction of the prominence or scale of any of those other social media portals, the mobile-focused realm of location-based services this year has experienced an exponential wave of growth seeking to connect users with the physical world around them.

In part using the global positioning systems embedded in many wireless devices, the location-based platforms are then used in a variety of ways to unlock marketing offers, help drive ticket sales, and deepen fan connections.

Many teams and leagues, for example, have encouraged fans to “check in” at a game, then they use that fan placement at the stadium or arena to send highly targeted, real-time merchandise, food or ticketing offers. Other entities, such as sports TV networks, have awarded a similar series of either digital or real-world rewards for watching an event on TV at home or at a bar, and checking in to declare their status.

The concept of checking in thus far has shown itself to be highly flexible, and also disproportionately popular among younger consumers that every sports property covets. New York-based service GetGlue, for example, recorded more than 16.2 million user check-ins during October, the vast majority of which came from the 18-34 age demographic.

“It’s still early days for this, to be certain, and we’re all still experimenting. But we’re very encouraged thus far,” said Bob Bowman, MLB Advanced Media president and chief executive.

Baseball’s digital arm embeds check-in functionality within its popular MLB.com At Bat mobile application. The check-in elements were built using a combination of internally developed technology and elements from New York-based Foursquare, and are now being primed for expansion within the 2012 version of the app.

“You combine the concept of checking in through your [mobile] phone with more traditional consumer loyalty programs, and blend that with digital ticketing, which is coming on fast, and you have a Gordian Knot of fan affinity,” Bowman said. “And for people under 25, particularly, connectivity and checking in are like air. So we obviously need to be there.”

How it all works

Location-based social media services are essentially the younger cousins of established portals such as Facebook and  Twitter. Similar to how users post what they’re doing, either with their friends or in real-time to a community of strangers opting in to a feed, fans use a mobile app to check in and post where they are in the world, such as at a game or at a restaurant.

Discovery is also a central component as users can find out recommended sites and services near them, who in their social circles is nearby, and what media their friends are consuming.

Originally, users on the check-in services would earn digital badges, a form of virtual goods, for consistent activity. Users on Foursquare, one of several popular platforms, who check in the most to a particular spot within a 60-day span, such as their favorite ballpark or coffee shop, can earn bragging rights and become “mayor” of that location.
Unlike some other forms of social media, there is also a distinct interconnectedness between most check-in services and other portals. Foursquare check-ins, for example, can also be tweeted out and posted on Facebook, and shared with that same user’s audiences in those areas.

But since those original incarnations, uses of location-based services have been far more varied and elaborate. Among the more prominent examples:

■ ESPN this year struck a partnership with Foursquare to embed game preview content, analysis, and facility data and
ESPN struck a partnership with Foursquare.
links to other branded material for specific events within the virtual check-in areas for stadiums and arenas. The alliance represented yet another emerging distribution platform for ESPN mobile content.

■ DirecTV, somewhat similarly, uses Foursquare to alert users to nearby bars showing games on NFL Sunday Ticket.

■ The Washington Redskins, among the most active individual teams in the location-based services space, have signed deals with both Foursquare and GetGlue aimed at boosting team-related business both inside and outside of FedEx Field. Promotions include exclusive drawings for seat upgrades and access to tailgate parties, merchandise coupons, and food and beverage discounts.

■ And the NBA, among the most aggressive leagues in this area to date, has formed partnerships with several major check-in services, including Foursquare and Texas-based Gowalla, to drive fan activity in both arenas and TV tune-in. The league and Turner Sports, through partner entity NBA Digital, last year also created NBA Turnstile with the aid of the now-defunct San Francisco technology outfit Fanvibe.

“We’ve discovered the digital badges work for narrow audiences, but you have to offer real-world physical offers, a discount, a coupon, what have you, to really drive scale in this space,” said Melissa Rosenthal Brenner, NBA vice president of marketing. “But this is a space where we intend to be very aggressive. We think there’s a big opportunity to offer a cool experience where fans are congregating around the notion of location and being at or watching an NBA game.”

Brenner, not surprisingly, declined to go into any detail regarding further operational plans in the space whenever NBA play begins again, given the sport’s fractious labor situation.

Still, scale for each of the major location-based services is growing this year at aggressive levels. Foursquare, not yet three years old, has more than 15 million registered users, and more than 500,000 participating businesses, establishing an early lead among location-based services. Gowalla, which now has much more of a travel-oriented focus, boasts more than 2 million registered users. GetGlue’s 16.2 million check-ins during October was up more than 38 percent from August, and more than 1,000 percent from a year ago.

GetGlue had 16.2 million check-ins during October, 38 percent more than August.
“Every month is accelerating even more,” said Fraser Kelton, chief operating officer for GetGlue. The company’s sports-related partners have included Turner Sports, the NHL, NFL Network and Fox Sports, among others. “And within sports, particularly, we definitely see a quick ramp-up since that live component to watching sports and not time-shifting is so important.”

The revenue models for each of the mobile check-in services also vary a bit, and in some cases are still very formative, but generally center on the concept of merchant services. The platforms generate revenue from advertising from merchants wanting exposure, and from generating location-based data that helps retailers monitor and predict future consumer behavior, in turn generating even more relevant targeted offers.

That combination of fast-driving traffic and the prospect of generating and delivering highly targeted marketing to drive sales has attracted the eye of many venture capital firms. Most recently, Foursquare in June garnered a $50 million round of funding, led by venture capital firm and prior investor Andreessen Horowitz, bring its total funding to more than $70 million.

“We’re very excited about what we’re doing right now with sports, particularly in terms of creating an experience where teams can engage with fans not only in-stadium but also outside,” said Jonathan Crowley, Foursquare director of business development. “We’re providing the tools for teams to come in and create that experience, making it more social, making it more fun, and also providing rewards.”

Cautionary tales

Location-based services, however, are still not a simple straight line to sharply improved sales and fan affinity. Though Foursquare by many accounts holds an early lead among its rivals, its user base remains a mere fraction of the more than 100 million global registered users for Twitter, and more than 800 million for Facebook.

Even with continued sharp growth, it remains unlikely that Foursquare or any other potential victor in the space can achieve the same kind of dominant scale.

Check-in portals are also pinched on the other side, as the discount and targeted digital marketing they primarily trade in also face competition from dozens of daily deal sites such as Groupon and Living Social. While not quite as geolocation-specific as a check-in service, those daily deals purveyors do work on a market-specific basis that often can be granular enough for many businesses.

There are also highly disparate operational models of the various players in the space. Foursquare has more of an event and outside-world focus. GetGlue, conversely, has honed much of its efforts getting people to congregate around television, seeing greater opportunity there to achieve mass scale. Gowalla has that travel orientation. SCVNGR, yet another location-based startup whose clients include the New England Patriots, has more of a gaming-based focus. Dozens of others still entering the space have sought to combine elements of each of those primary orientations.

“One of the biggest issues out there in this area is certainly fragmentation,” said Chris Golier, NHL vice president of mobile marketing and strategy. The NHL, like many properties, has taken a measured approach thus far on location-based services, making somewhat smaller entries with several players, including Foursquare and GetGlue, to experiment and learn.

“For us, check-in is really the beginning of a conversation with a fan, as opposed to a siloed thing unto itself. We’re trying to get more people to watch the games, either in person on or TV, buy a jersey, develop a sponsorship, what have you. So what we’re still trying to figure out in these various areas is how to deliver the best experience,” Golier said.

And since location-based services are seeking to connect fans around events they generally don’t control, they have all
the same vulnerabilities as other third parties with regard to labor strife, scandal or other issues.

“Given the uncertainty [with the NBA] out there, it didn’t look like we were necessarily going to get the distribution we wanted, and it didn’t make sense to keep investing in those services,” said Vishwas Prabhakara, chief executive of BeRecruited.com, after the company shut down the Fanvibe hub, which in addition to NBA Digital also worked extensively with Comcast SportsNet Bay Area and the Golden State Warriors.

MLBAM’s Bowman, meanwhile, said that much of the future of check-ins perhaps lies in greater automation. The hotel and airline industries, whose original work in consumer loyalty has helped inform much of the check-in services, in many instances feature programs that automatically track consumer progress. Board a plane, upgrade a seat, check in to a hotel — all of those activities are automatically logged and recorded on a user’s profile.

A promising future for baseball, Bowman said, will include a situation where fans automatically are checked into a ballpark when they go through a turnstile, and then are delivered highly targeted offers to their phones during the course of the game. And not only will those offers use typical information such as consumer data and preferences, but statistical data from the games themselves.

“It’d be a rather powerful thing that when somebody neared a particular milestone during a game, we’d be able to immediately shoot something to people in the ballpark to buy a ticket to the next game to see that milestone get reached,” Bowman said. “That’s the kind of customization we’re working towards.”
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