When Facebook launched Places, the social network’s long-awaited location-sharing feature, in August, it was accompanied by a couple of key assumptions. One was that 800-pound gorilla of the social networking space, with its 500 million total users and 100+ million mobile users, would take the check-in mainstream. As my colleague Debra Aho Williamson sagely put it in an eMarketer blog post:

Right now, checking in is a fairly niche activity. Places will introduce a lot more people to the concept. Facebook has already shown that it can drive big changes in people’s behavior—just look at the popularity of status updates. Checking in is another one of those behaviors that Facebook can easily push toward mass acceptance.

Another was that the launch of Places signaled the death knell for foursquare and other location-sharing services. But as it happens, the reports of foursquare’s death have been premature. In fact, since the launch of Places, foursquare’s user base has continued to surge, growing from 2.6 million on August 12th (according to a tweet by CEO Dennis Crowley) to 4 million on October 21st. If it continues at its current pace, foursquare is projected to top 5 million registered users by the end of November.

In addition, while Places has built-in scale, it doesn’t necessarily top foursquare in engagement. According to some recent (and admittedly rough) calculations by Silicon Alley Insider (SAI), a large number of people (a reported 30 million) have tried Places, but more people check in on foursquare on a more regular basis. Blame a lack of compelling features, such as game dynamics, that give foursquare a lot of its appeal. On the other hand, engagement and usage metrics, even the somewhat speculative data assembled by SAI, that disproportionately favor the smaller foursquare over the much larger Facebook, serve as further evidence that two can peacefully coexist.

The big question is: what would make Places more compelling? With yesterday’s launch of its Deals program, Facebook is betting the answer is commerce.

Why Places + Deals is important to Facebook:
First, the opportunity to save money will give Facebook’s base of mobile users, now 200 million-strong, a reason to use Places to check in. The success of group-buying services such as Groupon and flash sale sites like Gilt has demonstrated that consumers will jump at the chance of a good deal. The fact that Deals is launching with a roster of 22 national brands, including the Gap, H&M, McDonald’s, Starbucks, Macy’s, American Eagle Outfitters, JCPenney and Chipotle, proves that Facebook is serious about driving adhesion. In many cases, the inaugural deals mean discounts, but Starbucks and McDonald’s, for example, are offering donations to charities in return for checking in, reminiscent of a successful program non-profit Earthjustice has run with foursquare.

Facebook also recognized the need to include a mechanism to drive ongoing usage. In short, Deals is not about the one-shot deal. Rather, merchants have the option of using the platform as a virtual loyalty program or punch card to reward repeat buyers. This is a smart move that could counter some of the criticism leveled at services such as Groupon and one that will make Deals more compelling for users and businesses alike.

Why location-specific deals make sense for marketers:
Location information, which provides insight into not only place but also context, enables marketers to deliver a compelling offer or reward when consumers are at the point of decision. In yesterday’s geo-location sessions at the ad:tech New York conference (coincidentally scheduled at the time same time as Facebook’s Deals announcement), WHERE CEO Walt Doyle noted that reach, relevancy and redemption are the key factors in the location game.

Cracking all of those nuts simultaneously and with the same degree of success is challenging. Facebook can do its part by offering scale and ease-of-use for the business owner, whether a national brand or single proprietorship. But platform and scale alone are not sufficient. Ultimately, the success of Deals depends on, well, the deals that merchants offer. Unless they’re consistently attractive, consumers will lose interest or not sign on at all.

Will Deals alter the dynamics of the marketplace?
The answer is yes, but the impact of Deals will be felt differently throughout the geo-location ecosystem. Although foursquare was absent at yesterday’s launch, Groupon and Loopt, two companies that are farther along than Facebook in marrying location and offers, were present. The single-click sign-on feature that Facebook announced as part of the enhancements to Places will enable deeper integration between Facebook and other location services, which, in theory, at least, will give Facebook more appeal as an aggregator, a value proposition that will likely extend to commerce as well.

Could Facebook, with its reach and resources simply blow its erstwhile competitors out of the water? Given the inclination, the answer is probably yes. But Facebook understands a) the value of the ecosystem (a lesson perhaps learned from Google, now Facebook’s primary competitor in the digital space); and b) its limitations in being all things to all people and all companies. Fast Company described the post-Places opportunity for services such as foursquare and Groupon in the following terms:

Their long-term sustainability will probably rest on the same thing that enabled the Mac to survive in a PC world: A decision to eschew the urge to be everything to everybody and instead to focus on a customer segment they will always be able to serve better than the big boy.

Deals may not be perfect, it may be “cruder,” in Fast Company’s estimation, than similar offerings, but assuming that Facebook is on to something here, Deals could have a significant impact in the marketplace. It could also offer a big boost to mobile-assisted commerce and make mobile not only a more viable but also more necessary channel for reaching consumers.

The ad:tech London conference rang several changes in 2010. For one thing, conference sessions were located in the same hall as exhibitors’ stalls and the seminars delivered by industry experts. This made for a buzzy gathering and more concentrated networking.

In another departure, a representative of the print publishing fraternity struck a positively optimistic note. According to Martin Morgan, CEO of the Daily Mail and General Trust, the DMGT now derives 30% of its revenue from digital. With 44 million unique users each month, the Daily Mail earns significant sums from advertisers. As a result, Morgan confidently predicted that the Mail site will remain free to access—and should pick up additional readers from news providers that move behind pay-walls.

But the big stories were social and mobile. Since last year, social media services have consolidated their position in the limelight. Shiva Rajaraman, product manager at Twitter, kicked off the two-day program, sharing some statistics (the site attracted an average 90 million tweets per day in September 2010) and news that the company will soon allow advertisers to target Twitter users on the basis of who they follow and what they are looking for. 

Next up was Colm Long, Facebook’s director of online operations, EMEA. Impressive stats here, too: According to Long, the site now operates in 70 languages (translated within hours by about 300,000 volunteers around the world), and 150 million people access Facebook via mobile apps. In the UK alone, there were almost 28 million users at the start of September 2010—more than 45% of the population, and about 55% of web users. Over 60% of UK Facebook users log in daily, and 52% are female.

Other speakers reporting from the front line of the social frontier included Nicole Vanderbilt, CEO of furniture and interiors site mydeco, which currently boasts 1.2 million unique visitors per month. Advanced software enables users to plan rooms, decorate and furnish them virtually, and offers various sharing options too. Site visitors can comment on the room plans and reviews of other users. Mydeco also benefits from the 1 million monthly click-throughs to retail partners whose goods are shown on the site.

Meanwhile, luxury brand owner LVMH is pioneering the concept of “open luxury.” The key, said Kamel Ouadi, EVP, Digital for Louis Vuitton, was to recognize the complex emotions associated with luxury in consumers’ minds, and recreate those by digital means. LVMH has tapped top-flight writers, artists, photographers, filmmakers, designers, actors and fashion figures to create exclusive high-end content for a new website, Nowness.  Launched in February 2010, the site aims to become “the essential reference point for luxury global lifestyle” and to disprove the notion that luxury and exclusivity sit oddly with social media. One new film or audio production from the stable of creative talents is uploaded each day. The site, said Ouadi, incorporates software “capable of assessing our users’ interests and tailoring our recommendations for stories to reflect their preferences as they browse the content archive.” The site now claims 200,000 unique monthly visitors.

Dell too is exploring the intersection of intimacy and scale, according to Manish Mehta, Vice President, Global Online for the computer giant. The goal, he said, was to take social media “beyond campaigns,” and ensure that Dell established an online “voice” that served as both foundation and expression of the brand. The company is also taking steps in social commerce—one project aims to create a tag cloud for aggregated product reviews, and post the results on Facebook.

Mobile business has also leapt ahead since 2009. Thankfully, the industry is well past the point of asking whether this is “the year of mobile”; recent statistics and projections speak for themselves. According to Ian Carrington, Google’s director of mobile advertising for the EMEA region, mobile search is growing at 400% per year, and spending in this area is set to climb from £500 million ($700 million) in 2009 to £2.8 billion ($3.9 billion) by 2013. Of course, not every proposition succeeds in this highly competitive marketplace. Carrington cited evidence that 90% of mobile apps are deleted within 30 days of download, as their novelty or usefulness wanes. But consumers’ willingness to engage and transact via mobile is good news for many retailers. Overall, said Carrington, Google has found conversions to purchase 43% higher on the mobile platform than on PCs.

Life isn’t always easy for exponents of the new mobile way of life, however—to judge by the recent adventures of Alexandre Mars, CEO of mobile communications agency PhoneValley and Head of Mobile for Publicis Groupe. Mars appeared on the ad:tech stage walking gingerly, and sporting a black eye. Apologizing for his appearance, he told the story: A few days earlier, he was attending meetings in New York City, where stocks of the iPhone 4 were low or nonexistent. Walking alone one evening, he was attacked and beaten by a gang of young people eager to get their hands on the coveted handset. The bruises, said Mars, were taking a while to heal. But he did manage to hang on to his iPhone.

Speaker: Noah Elkin, eMarketer Senior Analyst
What: Mobile Marketing Trends, Insights and Best Practices
When: Thursday, August 26, 2010, 1 PM ET

To listen and watch playback of the Webinar, click here. You can view the PowerPoint deck below.

View more presentations from eMarketer.

Join eMarketer Senior Analyst Noah Elkin to find out about:

• How the mobile audience is changing thanks to the steady advance of smartphones and tablet-style computers such as Apple’s iPad
• The outlook for the leading smartphone platforms and the
  “app-ortunity” for marketers
• How the evolving mobile audience is using smart devices to access media and content
• Consumer attitudes toward mobile advertising and marketing
• How companies are succeeding with mobile marketing—both web- and app-based—with specific examples and case studies
• Ways that marketers can take advantage of the growing base of mobile gamers, music listeners and video viewers to reach consumers

About Noah Elkin
Noah Elkin covers trends in mobile marketing, usage, content, devices and commerce. In addition to his analyst duties, Noah is co-founder and co-chair of the Search Engine Marketing Professional Organization (SEMPO) Emerging Technologies Committee, which focuses on developing thought leadership around the intersection of search and new content and technology platforms like mobile, interactive TV and social media. He also serves on the Direct Marketing Association’s iDirect Leadership Committee.

Noah writes a monthly column on digital advertising trends for iMedia Connection and has been quoted in the The New York Times, The Boston Globe, The Wall Street Journal, Investor’s Business Daily, DMNews and Internet Retailer. Noah speaks regularly at industry events and conferences, including Search Engine Strategies, Search Marketing Expo, Digital Publishing & Advertising Conference (DPAC), SEMPO roundtables and DM Days.

Sponsored by: Adobe, Featuring Omniture Technology

As consumers plunge into back-to-school fall shopping and well in advance of the holiday shopping season, there’s a new location-based shopping app in town–Shopkick. In case you’re thinking “ho hum, it’s just another app” consider this: By downloading the free app from iTunes, consumers will get direct access to retail offers and earn a currency dubbed “Kickbucks” that can be redeemed for rewards or donated to charity.

Shopkick says it will give consumers who’ve downloaded the app rewards and offers just for walking into participating retailers. When I spoke with Shopkick CEO Cyriac Roeding earlier this summer, he positioned the app as a conversion tool that would enable brick-and-mortar retailers to drive more foot traffic and rev sales.

Last week, Shopkick announced that its geo-retailing service will be deployed at 100 Simon Malls, a big coup, along with previously announced partners Macy’s, Best Buy, American Eagle and The Sports Authority. Best Buy will launch a test-run of the service in over 250 of its stores by Oct. 1. Best Buy, through a spokeswoman told me by email: “This is a part of our broader experiments with technology for consumers, and it’s a facet of our overall, multichannel approach to bridge the physical and digital retail experiences.”

Shopkick says rewards and offers are live now in partner store locations in New York, San Francisco and Los Angeles, and will kick-off in Chicago and other cities in the coming weeks. Within the next four weeks, more than 600 individual stores and 100 Simon-run malls will have fully deployed the technology.

Here’s how the thing works: When consumers enter participating retailers, their smartphones pick up a signal (a technology that retailers install) alerting them to relevant store offers. They receive Shopkick “Kickbucks” just for showing up which can be redeemed for rewards or donated to charity. Roeding takes pains to say that Shopkick is unlike regular GPS technology which requires consumers to check in. Instead, this system enables a seamless communication because of the Shopkick signal which doesn’t require check-in.

I think anything, including this app, that can lure shoppers into stores and drive purchases could be helpful to retailers provided that they tie in with smart, relevant offers. The app can be considered a form of multichannel retailing and could, if enough retail chains sign on and enough consumers download the app, become a decent form of in-store communication. Shopkick hopes, no doubt, that the app will keep shoppers in stores longer, browsing, taking advantage of offers and buying on impulse. The findings of a study by e-Rewards and TNS International found that 13.6% of GenY consumers used their phone to access the web for special offers and coupons while shopping.

If that’s the case, the Shopkick app makes it even easier since consumers won’t have to go out to the mobile web for those offers–they’ll get them automatically and seamlessly via the app.

Participating retailers are expected to deliver in-store deals, and/or added bonuses for scanning barcodes of specific products. For example, shoppers will receive Kickbucks for trying on clothes and scanning a barcode in American Eagle Outfitters dressing rooms. They’ll receive additional Kickbucks for scanning and learning about products and services at Best Buy. The faux currency can also be redeemed for Facebook credits to play online games online, download songs, in-store gift card rewards at participating stores, magazine subscriptions, iPods, and charitable donations.

The app has raised concerns among privacy advocates since offers are personalized based on consumer preferences, previous shopping behavior, interests, location and scans. Quoted in AOL’s Daily Finance, Jeffrey Chester, the executive director of the Center for Digital Democracy, said via e-mail: “Shopkick should rename their awards currency ‘kickback’ — instead of ‘kickbuck’ — because you are handing them a treasure trove of your personal data. Consumers have to ask themselves — is this a good trade-off for my privacy? Shopkick’s so-called rewards are really digital bribes so you will gave them carte blanche to collect reams of data on you.”

I’ll reserve judgement until I see how easy the app is to use and how retailers decide the kinds of personalized offers they’ll deliver.

Most UK merchants expect mobile commerce to be part of their main strategy within the next 12 months, and more than 40% plan to have a transactional mobile site or application within the next year, according to a survey carried out by eDigital Research for the Association for Interactive Media and Entertainment (AIME), the Internet Advertising Bureau (IAB) and the Interactive Media in Retail Group (IMRG).

Researchers asked 140 marketers associated with retail, advertising or mobile services about their attitudes to mobile commerce. Of the senior-level representatives from UK retail brands, 94% said they considered m-commerce a significant business opportunity, and 59% said they expected their mobile revenues to increase over the next 12 months.

Current m-commerce revenues in the UK are relatively small; 63% of merchants polled by eDigital Research said they made less than 1% of their total revenues from mobile, or did not even measure income from the mobile channel. But retailers are beginning to recognize the emerging demand for mobile shopping. According to comScore and the GSMA, 4.2 million UK consumers per month are using the mobile internet to visit retailers’ websites.  Moreover, Brandbank’s “2010 mCommerce Content Report” noted that growing numbers of UK smartphone users are engaged in shopping behavior on their handsets; just 19% of smartphone owners surveyed in May 2010 said they did not use their mobile phone to help them shop.

Retailers will also be encouraged by recent growth in UK e-commerce overall. Online spending by UK consumers reached £5 billion ($7.9 billion) in July 2010, according to the IMRG and Capgemini e-Retail Sales Index. That marked a 14% rise on June 2010 and an 18% increase on July 2009—as well as the highest leap in ecommerce spending since 2007.  Average spend per person was £81 ($127).

All market sectors recorded higher sales in July 2010 than in July 2009, the index reported. Wet weather at the end of the month contributed to internet sales by keeping many shoppers indoors. Rain also drove visits and purchases at travel websites as consumers arranged escapes to sunnier destinations. Many travel operators had pushed their prices to rock-bottom, too, because the recession and flagging consumer confidence left many flights and package holidays unsold at the start of the summer.