AUSTIN, Texas – The first two days of SXSW were dominated by talk of location-based applications like Foursquare and SCVNGR, especially after SCVNGR’s CEO Seth Priebatsch took the stage for his keynote. Priebatsch was adamant that the future of location-based services was within gaming and that other location-based apps had yet to create brand loyalty in the real world. Foursquare followed up with a keynote to chat about the benefits of its service and the company’s plans for the future.
Foursquare community manager Chrysanthe Tenentes spoke on a panel about the future of local online communities. Tenentes talked about living in New York, writing things on Post-it notes as a to-do list of places to visit based on what her friends would recommend. In her mind, the solution to this “problem” is Foursquare because she can see exactly what her friends are doing and what they recommend doing.
The movement towards the social web is certainly an interesting trend, visible in e-commerce based on recommendations (think Etsy, Amazon.com, and eventually Facebook), mobile location-based apps and social networking. What is more evident is many brands have yet to really cash in on location-based services, the main motivation behind Priebatsch’s overarching statement:
“Right now, [the industry] is using very convoluted game mechanics to create loyalty in the real world,” said Priebatsch. In particular, he talked about group buying sites like Groupon offering consumers real values but failing to create real brand loyalty. He also mentioned check-in sites like Foursquare’s ability to create brand loyalty but falling short by not offering consumers any real value.
The new version of Foursquare 3.0, however, may challenge that idea with new features like recommendations and the ability to browse local deals based on location.
Another real life benefit designed to challenge Priebatsch idea about Foursquare is the company’s official partnership with American Express. The pilot program offers credit card specials and unique badges (like the AmEx Swiped badge) based on purchases. The combination of both digital and real-life rewards may be the thing that services like Foursquare need to maintain interest from brands.
Location-based applications that rely on check-ins or simply GPS are a common theme here at SXSW and it will be interesting to see if brands can truly unlock the power of location-based applications and where smaller company fit into the equation.