The Facebook Era

Facebook established the online social graph. Twitter established the real-time conversation graph. Who will dominate the location graph?

A number of startups, led by Loopt, Foursquare, Gowalla, and newcomer Booyah! are hoping for a piece of the action. Facebook, Twitter, Yelp, and social games companies like Zynga and SGN are rapidly adding mobile and geolocation features.

The recent success story has been Booyah! MyTown, which launched in December and has already eclipsed Foursquare and Gowalla’s combined user base. But for some context, even at 1M registered users, MyTown’s success pales in comparison to the 30M+ monthly active users of popular Facebook apps like Farmville and Mafia Wars (much less the 400M on Facebook).

How did this all begin? Dodgeball was one of the “original” mobile location apps. It was SMS-only (there was no GPS then). A user, say Dan, could text “@slanted door with friends” to D-O-D-G-E and all of his friends would receive a text saying “Dan checked in at Slanted Door Restaurant, with friends.” Dodgeball was acquired by Google in 2005 and basically shut down. The team went on to found Foursquare in 2009.

The next generation of geolocation apps basically consisted of location reporting and tracking between friends, pioneered by Loopt and later Google Latitude. People could choose to share their real-time location with others and in turn subscribe to friends’ real-time location.

Google Latitude

Companies quickly realized that people don’t care about location in the latitude and longitude sense. People want to know about the places their friends are going—restaurants, bars, shops, cafes. The current generation has added proactive real-world recommendations and game-like elements like virtual goods, property, and status for “checking in” to certain places. As Foursquare co-founder Dennis Crowley put it, “the point of the service isn’t I’m here, but I’m here, so now what?”

Foursquare's badges create real-life incentives and foster competition between users to encourage greater use

Foursquare has revived the original Dodgeball concepts of check-in and badges. For example, users receive a “bender” badge for bar-hopping four nights in a row or a “gym rat” badge for checking in to 10 “gym” locations within 30 days. Checking in at a certain location more times than anyone else earns you the title of “mayor,” and some businesses now offer free drinks or snacks to the Foursquare mayor of their location.

Gowalla is similar to Foursquare but with fewer badges and more “items” to pick up and drop off in places (in other words, more gaming, less status). It is the second mover, but regarded by many as having a much better code base and product design.

MyTown is GPS-enabled Monopoly with real physical places. Users can buy places and collect rent from others who check in to those places.

MyTown allows users to buy and sell their favorite locations

With its new Pulse application, Loopt has expanded beyond its original auto-location update functionality and now pushes active recommendations for places and events based on where you are and what your friends are doing. They have partnered with Zagat and Citysearch to provide restaurant recommendations and reviews. One of Loopt’s greatest strengths is compatibility across over 100 mobile devices.

Loopt pulse

Last month, Yelp too introduced check-in and leaderboard features on their iPhone app, which already has over 1.25M users. Yelp’s augmented reality app, the first released specifically for US iPhones, ignores the personal relationship building, social networking aspect of Foursqare and Loopt and instead connects users to the entire internet spectrum of opinion. A GPS and compass system pinpoints the iPhone’s location, so that pointing the phone at a store, business or restaurant displays icons of Yelp reviews overlaying the iPhone’s live camera view.

As for the future, the battle continues for user share as swaths of people are buying smart phones for the first time. In parallel, many of these companies are building ad networks and partnerships. Both Loopt and Foursquare are exploring geotargeted coupons (for example, Loopt has partnered with Jack in the Box to serve up coupons when users are in the vicinity of a restaurant). The next frontier may be auto check-ins, to avoid the problem of user drop-off after several months, but privacy concerns will slow this trend. Facebook may be the next to enter the game as well. No doubt geolocation is hot, but here are a few hurdles ahead.

1. Smart phone penetration. Geolocation apps require GPS-enabled smart phones. Thanks to the popularity of the iPhone, smart phone penetration in the US has gone up from a mere 3% in 2007 to nearly 20% in 2010. But we still have a ways to go. (This is the least of the concerns. Smart phones are where we are headed, so this is a problem which I think will resolve itself over time.)

2. Mobile interoperability. There are little to no standards for building and accessing applications across different smart phone devices, which presents an ongoing challenge to these geolocation startups. There are also no standards for geolocation data or mobile ad units, which will be a challenge for advertisers. (This too is resolving itself slowly as the number of mobile platforms is converging.)

3. Security and privacy. Privacy controls were a big reason Facebook won out over other social networking sites, and even those took some getting used to. A secure and private model around sharing our real-time physical location is doubly hard to figure out. A new website, PleaseRobMe.com, has exposed the shocking vulnerabilities of people who publicly share their location and imply they are not at home (creating a target for burglars).

PleaseRobMe's real-time list of empty homes confirmed by Twitter updates

Acknowledgments: Steve Garrity (my cofounder at Hearsay Labs) for his extensive knowledge of the mobile space and Zoe Leavitt for market research

Just when we thought it was down to Facebook versus Twitter for the social networking title, Google has jumped into the race with Buzz, a new social sharing service for Gmail users (there are around 176M worldwide, compared to 400M Facebook users). Google Buzz allows users to turn Gmail contacts into a social network and post status updates, photos, and links (like Facebook) but according to a one-way follower model (like Twitter).

While this latest move by Google is certainly attracting a lot of buzz (sorry, I couldn’t resist), they will need to address some pretty big hurdles in order for Buzz to be viable.

1. Privacy: Google faces same privacy challenges that crippled MySpace and Orkut. One of Facebook’s key innovations that allowed it to break away from earlier generation social networking sites was privacy controls that allow users to manage who sees what information. Google error: When Buzz launched last week, it automatically added top Gmail contacts to your follower list, even though these might be your coworkers, boss, or others you don’t want to share information with. Google is also confounding the “friends only” model on Facebook with the public model of Twitter, so people aren’t quite sure what to expect. The fix: Following an initial uproar, Google has taken steps to add greater security options. But people are still freaked out, and it will take time to win them back.

2. Usability. To be honest, I was expecting something sleeker from Google, which I know for a fact has some of the best usability designers in the world. I want to see what’s going on “at a glance”—that is, more AJAX, fewer clicks and less scrolling. Google error: Each “buzz” (especially if there is an image) takes up too much of the screen and it’s a pain to have to scroll down to read each one. Once again, it’s trying to be both Twitter and Facebook, but the models don’t jive. The fix: Buzz needs to either 1) adopt the Facebook model in showing you a rich update with images, video, and/or link, hide comments by default, and use an algorithm to just show a subset of everyone you are following, or 2) show every tweet like Twitter but keep it simple, text only, and limited to X number of characters. The usability falls apart when you try to combine rich updates and rich commenting with showing every update, because no one has that kind of time.

2 buzzes take up my entire screen. The same amount of space would fit 5 Facebook status updates or 10 tweets.

3. Not a great track record with social technologies. After an early and valiant, but ultimately unsuccessful, social network play with Orkut.com, Google last year unveiled a number of (perhaps overly) forward-thinking collaboration features with Google Wave. No one disagrees there is plenty of potential, but then again a lot of people I have talked to and I myself feel it is too general to just suddenly start using in a serious way (so we haven’t, yet). Undoubtedly, Buzz is a step toward Wave. And then there was Google OpenSocial (later spun out as an independent nonprofit) which launched in 2007, also in a big hurry, at the time to compete with Facebook Platform. OpenSocial largely has not lived up (yet) to its promise of connecting multiple sites and networks. And then there is Google Latitude, which is cool in theory, but for all practical purposes I don’t really care about the latitude and longitude of my friends and would rather not tip off any stalkers. Foursquare, Gowalla, or Loopt offer a much better experience. All great ideas with great intentions, but poor execution.

Relative growth of Facebook versus OpenSocial Networks

I’m not hating Google (I would never do that—they gave me my first job). Nor do I question their might or determination. They are taking the right steps, and all of us as consumers will ultimately benefit from the innovation that results from competition. But especially with sensitive information and interactions on the social web, the devil is in the details, and so far Google has been rushing their products a little too much to pay attention to the details.

Google’s advantages: a lot of smart people, a lot of resources, a lot of our data, and instant distribution to 176M Gmail users

Google’s opportunity: 1) use email contacts as a more accurate and up-to-date implicit social graph, compared to the Facebook/Twitter/LinkedIn social graphs which are all explicit (must initiate/accept each connection), 2) weave together a much richer social experience across a lot of applications including mobile, maps, search, email, Youtube, Picasa, Google Reader, and 3) mesh multiple communication modes including voice, chat, email, status updates, documents/spreadsheets.

Takeaway for marketers: it’s probably too early to get serious about Buzz. I’d give it at least a year. I will be staying tuned and keeping all of you posted.

The web recording has just been posted for the popular webinar I helped lead last week on “Using Facebook to Grow Your Business.” It features sixty minutes of Facebook trends and stats, specific examples and tips for small- and medium-sized businesses, and a case study from Jonathan Smart, an Allstate insurance agent in Columbus, Georgia who has really embraced Facebook for his business’s marketing and customer service efforts. Many thanks to MyVenturePad and SAP for sponsoring, and to everyone who joined us for the event!

Click here to watch the recording (you will be prompted to register first - sorry for the added step!)

I was in New York again last week keynoting the PMA Digital Summit (#pmadig09), held at Google NY headquarters. I was surprised that among the crowd of savvy New York-based marketers, my usual poll of who is on Facebook and Twitter revealed that fewer than 10% of audience members were on Twitter (everyone was on Facebook, obviously). Not what I would have expected from that group.

Opening remarks from conference chairs Elizabeth Apelles (President of Greater Than One, a digital agency) and Tim Reis (Head of CPG East at Google) kicked off the day with some interesting facts and stats - 64% of US households have broadband, US internet users spend on average 15 hours per week online, 2.67 billion searches conducted each day (my personal note: interesting to contrast that with the 8 billion minutes a day spent on Facebook across its 350M active users). Tim talked about the evolution of the web from information and communication from inception until the late 90s, commerce in early 2000s, and more recently community, self expression, and entertainment in the last few years. US e-commerce sales in 2008 totaled $131 billion which sounds like a large number but was still just 6% of all sales.

It was a good set-up for my keynote, which focused on Facebook as a new identity, communication, and marketing platform that is hypertargeted, opt-in, and social. My slides below, in case you are interested. Please let me know your thoughts!

Up next,  Ben Smith (@bensmith32) AKA “Bagel Ben” gave an excellent brand presentation about how Dunkin’ Donuts is engaging its fans through contests and promotions. For example, Ben came up with a cool “Fan of the Week” promo where fans are encouraged to submit photos of themselves with the Dunkin’ Donuts brand and each week, the winning photo gets featured on the Dunkin’ Donuts Facebook Page. His advice to brands? “Don’t outsource Twittering and Facebooking to your agency. It comes off as unauthentic, and you miss out on a key opportunity to connect with customers.”

Sean Hanrahan of ESPN gave a great presentation on mobile, showcasing some of ESPN’s new mobile apps for smartphones. The engagement numbers he shared were astounding. Sports broadcasting is definitely a different beast. Some other interesting points - though the ESPN audience heavily skews male, it is otherwise very diverse and single-handedly one of the most popular applications for Hispanic men.

One of my favorites of the day was a highly entertaining session by Seth Kaufman of @pepsi, who characterized  it best:
“With social media, the deers have guns. Those that we hunt are controlling the conversation.” He talked about how we have gone from brands defining meaning for customers to the reverse. The four social media goals he has established at Pepsi are to 1) increase effectiveness via deeper connections and customer engagement, 2) increase efficiency via targeting, 3) innovate across media platforms, and 3) measure, scorecard, improve. I appreciated that he is one of the only people I have ever heard who wove traditional media into the social media conversation that makes total sense.

Overall, a great show with a great line-up!

Great, engaging crowd this morning at Web 2.0 Expo at the Javits Center in New York. I really enjoyed the audience questions and discussions, including

• the need to be able to identify key influencers and social media participants when calculating social customer lifetime value
• reconciling the problem of low clickthrough rates on Facebook with high response rates to Facebook Page updates
• since there are no business account users on Facebook, all Pages and ad campaigns are associated with an individual. Best practice for companies here is to require that individual to include several other colleagues as additional admins in case anyone switches roles or leaves the company

Many thanks to @michaelreynolds @14str8 @mklawler @anetah @KatieWynner @MarissaARoss @RIGHTSLEEVE and many others for leading the vibrant Twitter thread around my session. Slides below. Looking forward to your comments!

I had a wonderful time speaking at Facebook Developer Garage London last month. Many thanks to Joshua March and Grant Bell for organizing a terrific event and packing the house! Here is video of my presentation from the event (intended for a developer-oriented audience) on what not to do in the Facebook Era.

With so many ways to build presence and engage on Facebook, many of you have been asking for a more hands-on accelerated introduction to cover the full Facebook marketing landscape.

I am partnering with Inside Facebook to offer an intensive two-hour (online) crash course a week from today on Thursday, October 22. Final registration at $149 opens today at 8am PST/11am EST and ends next Wednesday or when the workshop is sold out. Hope to see many of you there!

I presented Wednesday to the Direct Marketing Association to a packed and lively audience of marketers from across northern California. We had a great time talking through the ins and outs of Facebook marketing through different case studies and concepts from my book and audience members. Here are my slides, just posted on SlideShare. Look forward to your comments!