RBM: Location-Based Advertising and the Holy Grail of Digital Marketing - John Heywood - MediaBizBloggers

On Friday, November 5^th, Facebook unveiled Deals, a tool for merchants to provide discounts and other special offers via location to Facebook users that check-in to a physical establishment using their mobile phone. While Deals is not the first platform through which businesses can offer discounts and specials tied to location, Facebook ups the ante on rivals by offering four ways businesses can interact with and attract potential patrons:

· Individual Deals:Checkin and receive a discount, free merchandise or other reward

· Friend Deals: Check in with a friend and claim an offer together

· Loyalty Deals: Earn a reward by being a frequent visitor to a place

· Charity Deals: For every check-in, businesses pledge to donate to a specific cause

Now you may be wondering, will this really work? Let me offer a personal anecdote: With the launch of Deals, Facebook announced 22 partnerships to kick off the project, the most striking of which was from Gap, offering free blue jeans to the first 10,000 people to claim the deal nationwide. Excited to see if we could score jeans, five coworkers and I set out from RBM's SoMa office to Gap's Flagship Store, and low and behold, we claimed the deal!

(Left to right: Kristy Wen, Allison McKenzie, Katie Bullman, Kate Anderson & Bessie Chu)

Upon entering the store, the atmosphere and energy around the promotion was palpable. People around us claiming the deal compared the experience to receiving one of Willy Wonka's Golden Tickets. Two men that identified themselves as developers for Yelp—a mobile social network in its own right—had no problem admitting that free jeans was enough to motivate them to use a rival service. But back to our group, and the experience Gap was able to create by way of Facebook.

Our group spanned the spectrum in terms of our affinity and allegiance to Gap. I, for instance, have worn Gap jeans for some time and needed a new pair, so timing of the promotion was great. Four of my colleagues classified themselves as occasional customers, while one had never before owned a pair of Gap jeans.

As part of this promotion, the first 10,000 people claiming Gap's deal could take a free pair of jeans priced at $59.50 or under, or 40% off any item in the store, and everyone else arriving after the free jeans were gone would also get 40% off an item. Of the six of us, my five colleagues took free pairs of jeans, while only one pair of more expensive jeans fit me the way I wanted. As a tall and thin guy, I've had enough jeans in my life to know that I won't wear them if they don't fit properly, so I bit the bullet and took the discount.

So when the day was over, was the promotion worth it for Gap? Here's what they got in exchange for 10,000 free (or almost free) jeans:

· More than 10,000 people inside Gap stores, some of whom had never interacted with the brand

· Additional sales generated due to increased foot traffic and participants beyond the first 10,000

· Positive sentiment and increased consumer loyalty among participants

· Offline word of mouth sharing about the brand

· Significant press coverage and positive buzz in the blogosphere

· Resonating brand exposure via Facebook check-ins and event RSVPs via News and Activity Feeds

While ROI on the above is difficult to quantify in the short term, the answer to the question of whether or not the promotion was "worth it" is a clear yes. Simply stated, Gap has leveraged Facebook to tap into the holy grail of digital marketing: Earned Media.

When we consider the press coverage and consumer buzz this promotion drove, reach swells significantly, even beyond Facebook's network. Friends tell friends about the promotion before it happens so they can take advantage, and in Gap's case, friends talk about it even after. When people put their free pairs of jeans on, they think about Gap, and might just say something positive about the brand later on to a friend. It's this powerful sentiment that brands create when they connect with consumers, and coupons for free merchandise or meaningful discounts are a great way to do so.

As such, the value of Facebook Deals for advertisers—particularly brand advertisers—cannot be overlooked or underestimated. Businesses can entice patrons to brick and mortar stores to claim a deal, very probably make a sale, and regardless, create discourse among customers who likely will speak favorably about them if they're saving money.

Even if these consumers never once open their mouths in real life about the Deal they've claimed, by checking in on Facebook, they've already told all of their friends about it. From here, friends of friends have the opportunity to follow-up and/or spread the word themselves, giving brands a tremendous ability to connect and resonate with a core audience.

John Heywood joined RBM in 2009, managing marketing campaigns for clients such as Clear Channel, Conde Nast, Scottrade, and VEVO across SEO, Paid Search, Social Media, Web Development, Mobile and Display Advertising. His email address is jheywood@redbricksmedia.com.

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