AUSTIN — A year ago, the rage at South by Southwest Interactive were so-called check-in services — mobile apps that let people flag where they are. These services promised to spin the habits of smartphone users into advertising gold.
By Foursquare
Foursquare has maintained its lead among mobile check-in services. It's at 7 million members, and adding 1 million a month.
But that was before Facebook plunged into the market, with Places, last year. While that move legitimized the nascent market, it added a formidable competitor to the likes of start-ups Foursquare and Gowalla.
"We're at an interesting place, with Facebook involved," Gowalla CEO Josh Williams says. "They eliminated the need for basic (check-in) services, and shook up the industry."
If last year's SXSWi here was a coming-out party for Foursquare and the entire category, this year is a maturation of sorts.
It's "Act 2," Williams says. The emphasis now is on adding features that distinguish Gowalla and others from Facebook Places. Complicating matters, Google has folded its Places and Maps functions into the Android platform, giving it a check-in look and feel, says BIA/Kelsey analyst Michael Boland.
Like social networking on mobile devices, location-based services are still in their infancy. Ad spending on mobile, location-based services was only $43 million globally last year.
"There is a novelty factor that may wear off, and the robust growth pattern may succumb to check-in fatigue," says Gartner analyst Ray Valdes.
Yet the upside could be immense. Noah Elkin, an analyst at eMarketer, expects 79.1 million mobile users will participate on social networks in the U.S. in 2015, almost double the 38.9 million last year.
What is more, Boland projects mobile-based local ad revenue in the U.S. — of which location-based services are just a fraction — will vault to $2.02 billion in 2014, from $404 million last year, as national advertisers grow more astute at local, targeted promotions.
What check-in's major players are doing to cash in:
•Foursquare. Despite heightened competition, Foursquare has maintained its lead in the category. It's at 7 million members, and adding 1 million a month. It is attempting to extend that lead, with version 3.0 of its app for Android and iPhone devices. An "Explore" feature gives users access to tips on food, entertainment and shops from other Foursquare users — not just friends. Something called "Specials" rewards loyal customers with the businesses they frequent.
"Our growth has doubled since Facebook launched," says Foursquare CEO Dennis Crowley. "We used to have to not only work on the service but publicize our field. With Facebook around, we don't worry about publicity anymore."
•Loopt. The U.S.-only service, up to 5 million users, just rolled out a real-time feature that notifies consumers via e-mail and text of up-to-the-minute deals at their favorite spots when they are nearby. "The move to mobile computing is the freight train that is moving real fast," says company president Steve Boom.
•Gowalla. Twelve months ago, the Austin-based company was at 100,000 members. Today, it's at 1 million — with sights on 5 million to 6 million this summer. Last week, March 7 it unwrapped a new Android release with a redesigned activity page, featuring friends and family in one stream, including Facebook Places and Foursquare check-ins; a new book-marking feature to help locate favorite hangouts; and improved photo taking and sharing. In the end, maybe Facebook Places made check-ins the virtual place to be, says analyst Boland. "Facebook Places is a sleeping giant, but it will popularize check-ins and help smaller services grow via social sharing, rather than squash everyone," he says.
