Four Location-Based Marketing Rules for Gowalla

The practice of geolocation services, or the ability to locate a potential customer using GPS-enabled technology, is all the rage in the tech and marketing world right now. However, there are very few written rules for marketers as to what to do. Thankfully some brave marketers are testing and learning with the various location-based platforms. VaynerMedia, the marketing company co-owned by @garyvee released a case study this weekend showcasing their work with the NBA’s New Jersey Nets and Gowalla. The case study concludes that there are real opportunities for brands to move consumers as evidenced by the 15% of Gowalla users that showed up for a recent NJ Nets game. The 15% redemption was called a success. I’m calling bullshit.

I’m going to preface this by saying that test and learn cases are great: they help marketers understand a new medium and set realistic expectations around what budgets to spend to see a return on their investment. They should also solve a business problem, such as “Increase awareness by 5% in the New York market” or “Boost sales by 5% this quarter”, in the process. Test and learns are often not something agencies tout as success because the results may be lower than what the marketers would find via other mediums; in this case “success” is relative.

All of that being said, this could have been a great case study to help get brands over the hurdle of location based marketing but there were some fundamental issues and mistakes that, if corrected, would have yielded better results. According to VaynerMedia’s AJ Vaynerchuk, the clients were happy with the campaign. From that perspective, it’s a win. As a marketer I’m going to outline improvements that could’ve been made to get a higher result for this campaign because 15% redemption, given numbers like 50%+ in mobile redemption, is low.

Rule #1: Set A Realistic Distance

In the Nets case study, it was said that seventy five (75) miles was the proximity from the IZOD Center in New Jersey that was estimated people would travel to watch an end-of-season basketball game. As someone who grew up in the Motor City, I can tell you that even the Pistons would have trouble convincing car-loving fans to drive 75 miles to a basketball game unless it was the NBA Finals. The metro New York area is difficult to navigate as it stands (tolls, traffic, etc), and I couldn’t see anyone from Connecticut or Long Island driving that many miles to the Meadowlands to watch the Nets, even if the tickets were free.

Solution: Create a partnership with NJ Transit’s bus system or use a smaller geographic range. The promise of geolocation marketing is that you can have an immediate impact on a consumer based on where they are, and in this case the net, without pun, was cast too wide.

Rule #2: Have a good product

It’s pointless for a marketer to put a gold bow on a turd, which, as @ajv points out, is pretty much what was being asked in the Gowalla case. (Side note: pointing the finger at a client is never best practice.). The Nets were on pace to set the record as the losingest team in NBA history, and a “reward” is supposed to be just that – something you would find value in. Going to watch a team get blown out by 30 points or struggle to squeak out a win over another bad team in a half-empty stadium isn’t anything a fan would really want to experience.

Solution: I’m not a fan of throwing a client under the bus just because a campaign had challenges, so this goes for both the agency and client: Stand behind the product you’re offering. In this instance, the tickets would have been better used as a reward for existing fans or a donation to charity. If you’re dead set on using location-based services to drive people to a bad product you can try future offers, e.g. a discounted offer for fans who go to see next year’s team. Bottom line is that a bad product is a bad product.

Rule #3: Have context

I happen to have both Foursquare and Gowalla on my iPhone. Foursquare is more popular, creating a larger audience to work with, and is game-like due to points earned and Mayorships. Gowalla also has a game-like element that revolves around potentially picking up virtual free goods in real life. I get this concept, which is why certain promotions (Adobe comes to mind) work: they have the right criteria. An interested party, at a relevant location, a good product and intent. In the case of Adobe it’s: (1) Developers at a (2) conference could pick up (3) software they would (4) intend to purchase. In the Nets case it’s (1) random people checking in within a (2) 75 mile radius with an offer to come see (3) a bad team and (4) pay for parking and concessions. At this point it’s destined to fail and is no better than a mass market offer on NJ Transit or via direct mail.

Solution: Follow the criteria above, for starters. One of the promises of location based anything is that we’ll have access to better data as marketers. Since VaynerMedia has a financial interest in both Gowalla and the success of their1 client’s campaign, they should have made the ask for specific data and better criteria. For example, only offer the tickets to people checking in at sports bars on the night of an existing basketball game within a closer radius of East Rutherford. Sure, it reduces the pool of potential candidates but this is supposed to be a targeted thing, right?

Rule #4: Avoid Any “Ah Ha!” Moments

No one likes to be surprised or taken advantage of. Sure, the Nets tickets were free, but factor in the parking, concessions, tolls and gas and you’re dropping upwards of $100 to watch the NBA equivalent of The Generals get stomped by the Globetrotters. And feeling like you got fleeced after initially being told something is “free” doesn’t leave a good taste in your mouth.

Solution: Don’t burn your customer. Either you’re trying to impact concession and parking sales tonight, which is very short sighted, or you’re trying to create lifelong fans. A few hot dogs and free parking would go a long way.

Bonus Basic Marketing Rule: Disclose

Regardless of the intention, the initial Nets case study was posted without disclosure that Gary is an investor in Gowalla. After initially posting it without this information the page was updated to reflect this but the PDFed case doesn’t mention it. The folks at Vayner have updated both the website and PDF after Loren Feldman of 1938 Media (and Shamable contributor) pointed out the omission.

Solution: Disclose your relationships.

Conclusion

While the rules are being written every day whenever there’s a new marketing tool or tactic that pops up, there are some basic marketing principles that, if followed, can yield a higher result. The take-away from the VaynerMedia case is that touting a test and learn as a success isn’t practical or productive. By the numbers, if 15% of 500 tickets were claimed then by my math that’s about 75 people who showed up. Assuming half paid for parking (2 people per car at $12 per car) and each couple spent an average of $100 in concessions, the revenue from this campaign was roughly $4,200 sans Gowalla and VaynerMedia costs and fees. This doesn’t account for the earned media via tweets and re-tweets, but oddly those numbers weren’t disclosed in the case study – so I’d find it hard to believe that they had any measurable impact or reach.

I have no doubt that there’s value in geolocation for businesses, including hotels and restaurants (Carrabba’s is a client who’s using Foursquare effectively), because it addresses higher-end IT and marketing infrastructure in a low cost or free way. Clearly, the sports world and Gowalla don’t quite have the right formula — or case study — yet.

What other rules do you see playing out? What other cases have you seen that we can learn from?

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