Are Location-Based Social Networks Done For?

It’s been a week of ups and downs for the geo-location industry. In case you’ve missed the whirlwind of news, here’s a quick look at what happened this week and my interpretation of what it means (or doesn’t mean) for marketers.

Foursquare Reaches 15 Million Users

Earlier this week Foursquare released the encouraging news that they now have 15 million users. But that’s not the whole story. This statistic looks at the number of registered users, not people who actually use the app. Plus, only about 50% of these users are located in the US.

Check-Ins Still Uncommon

According to a recent Forrester research report, just 6% of consumers have ever checked in, and only 2% check in on a weekly basis. 70% of the 37,000 people surveyed knew what a geo-social app was, and while this seems low, it is a steady improvement over last year’s 16% awareness level.

Facebook Acquires Gowalla

Gowalla, a mobile-based social network that was founded in 2007, announced on Monday that it has been acquired by Facebook. Gowalla co-founder Josh Williams wrote that he and co-founder Scott Raymond “were blown away by Facebook’s [post-f8] developments…[and] a few weeks later [when] Facebook called…it became clear that the way for our team to have the biggest impact was to work together.”

Facebook made it clear that they are acquiring the Gowalla team, not the service or their technology. Over the next few months the digital community will be watching what Facebook does with this location-focused team, especially given both the success of location-based Facebook posts and the failure of now defunct Facebook places.

Are these platforms worth a marketer’s time?

The statistics on actual use of geolocation-based services are surprisingly low. It will be interesting to see if  social media giant Facebook takes the Gowalla team into the next dimension of checking in or roll them into existing product lines.

With few frequent users, Foursquare and similar services may only apply to brick and mortar marketing in 2012. Mass adoption is also – in part – driven by brand marketers’ decisions. If marketers don’t deliver on exciting and shareable rewards users may never get on board with checking in.