Leveraging location based social networks

SHRUTI GUPTA | NITIE, MUMBAI

Leveraging location based social networks

The smartphone usage in India is on an upward trend with an upsurge of new players, constant reduction in prices and the rising number of applications and features. With these advancements in the cellular technology provided by handset manufactures and the launch of 3G, India is soon catching on to the latest trend of social networking using mobile phones - Location based Social Network.

According to Wikipedia, Location Based Social Networking is “social networking in which geographic services and capabilities such as geo-coding and geo-tagging are used to enable additional social dynamics.” International giants such as Foursquare, Places by Facebook have already started their services in India and the market is bound to increase with time because socializing is in the human blood. We like to share things with others, we like to do things together, invite people to places we are visiting; in short, we want people in our cohorts to be aware of what we are up to and with the usage of Location Based Social Networks we are able to do so in real time.

Location-targeted advertising is very promising for marketers, because by using Location Based Social Networks they will be able to send ads to people, based on where they are and where they’ve been, along with other methods already in use. In India, the market is still untapped because of the scepticism on the small number of users using the service owing to scanty internet mobile usage penetration. However, in 2010, around 15 million urban Indians accessed internet on their mobile phones on a daily basis. It is estimated that by 2015 there will be 250 million mobile internet subscribers. Therefore it provides an opportunity to marketers to allocate some of their budget on using Location Based Social Network to advertise and promote their brand especially in India, where the demographics is such that, the mobile internet usage is more happening than the typical PC broadband.

The college going students and young men and women constitute 70% of the mobile internet users. They are educated, social, open to experiments and extroverts. Hence advanced tech- friendly people of India will be easiest to target, convert and retain, thereby being cynosures for the marketers. However not all of the young people have same interests, hence targeting of the “right” customer is pertinent for the marketers.

Foursquare, for example, helps marketers in doing this by providing the number of check-ins per business category, thereby enabling marketers to realize consumer preferences and target the “interested” costumers. Once targeting of customers has been done, Location based media network allow all the brands to leverage the platform for enhancing their brand recognition and recall. Brands can create their own pages and use badges to gather followers. As social status is a major driver among the youths, the badges can serve a great motivator for them to show-off the brands they are using. Well established brands in metros can take advantage of this service to widen their reach in Tier I and Tier II cities like Dehradun, Siliguri etc.

The firms with physical presence like food outlets, retails stores, etc. are expected to benefit most from it, as Location Based Social Network can help them to update the users, located in the vicinity of their stores, with their latest discounts offerings, thus bringing in more people to their outlets. The loyal customers can be provided with special coupons and vouchers thereby increasing their visit to the stores. Sports Bar by usage of Location Based Social Network and capitalizing on youths willingness to pay and have good time with their friends while enjoying a game of soccer, cricket etc. can greatly increase the number of footfalls in their bar.

The Location Based Social Network service users are good advertising targets as they can influence their friends and family, thus providing huge word- of- mouth publicity. This provides two- prong benefits for marketers. Primarily the medium is cheap to advertise and advertising on it has a bullwhip effect, where the reach is far greater than the users of mobile internet. Secondly in the Indian culture peers play a major role in converting purchase intention to purchase decision, thus increasing the number of converts and enormously enhancing the sales. Tourism is one sector in India which will definitely gain by extensive usage of Location Based Service Network. A realistic image can be created among tourists wanting to visit a place based on the reviews of tourists’ who have already/are currently visiting the place.

Marketers can also capitalize on the main purpose of Location Base Social Network which is to provide users with an opportunity to catch up with their friends. They can come up with offers wherein buying in large number leads to additional discounts. Since individually a person won’t be able to purchase for such a huge amount, a group of people can together purchase, proving to be beneficial for both the customer and the provider. First movers will be welcomed enthusiastically by the Generation Y of India who is game to experience anything exciting and of value to them.

There is however a major challenge about which marketers should be cautious of. Indians have a way of finding short cuts and with the amount of intelligence and knowledge they have it isn’t easy to prevent these tech-savvy individuals from bypassing the checks provided by the Location Based Social Network providers. They can come up with ways of checking into places they haven’t visited, thus availing the offers provided by the marketers. Thus in order to ensure no forfeiting, marketers should enable their own checks along with using appropriate platform for advertising their products.