Aug 15, 2010

Geolocation social tools like Foursquare are beginning to show their weaknesses

Marketing platforms built on geolocation social media services are one of the hottest trends with investors and advertisers. Starbucks launched several offers using these techniques, with great fanfare. Now that the service has begun to get beyond the early excitement, several weaknesses are beginning to appear.

One major issue is that anybody can checkin to a business, without necessarily being a paying customer. According to Forrester,
"complaints are surfacing that customers checking in at Starbucks are finding their barista is the mayor, effectively blocking them from earning the discount." Forrester recently provided an analysis of the Starbucks offer on Foursquare.

The number of users is also an issue for marketers. Foursquare has 2 million users, a highly respectable number for a geolocation game, but a minuscule fraction of potential shoppers.

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