Checking In: VaynerMedia Shows Geolocation Can Reap Business Benefits

Adobe Firefly-created image of a basketball going into a hoop.

The team at VaynerMedia, operated by brothers Gary and AJ Vaynerchuk, released a case study that attempts to prove to the marketing and business world that geolocation services can be used to help drive business to your brand.

What is geolocation? Known also as location-based services, this technology has recently grown more popular thanks to the introduction of services such as Brightkite, Gowalla, Foursquare and other applications that utilize global position systems (GPS). Many of these new services have turned to making “checking in” to a location or venue as entertaining as possible, awarding badges, mayorships, founder status and points to help you compete with your friends.

VaynerMedia ran a gelocation campaign for the NBA's New Jersey Nets to drive fan loyalty.
VaynerMedia ran a geolocation campaign for the NBA’s New Jersey Nets to drive fan loyalty.

Can Geolocation Succeed in Marketing?

But what is the business applicability of having your customers check into your venue/store beyond having them express brand loyalty? Many organizations have been trying to figure this problem out. There are critics of geolocation who have said that there’s no value in simply offering coupons and discounts to people who frequently check-in and become the “mayor” of that specific location.

This reminds me of a geolocation panel that took place during Social Media Week in San Francisco which I wrote about on Network Solution’s Unintentional Entreprenuer blog. One of the issues with geolocation has been privacy rights. Are we that cavalier to simply let others know where we are checking in from to ignore any potential safety risks? And while we may think we are letting people we know follow us where we’re at, the question at hand becomes ever so important: Do we know everyone that we let follow us?

So aside from privacy, and this issue is not one to be ignored, what can companies do to leverage geolocation services? Robert Scoble, technology blogger & evangelist at Rackspace, believes that geo-location should “provide some value back instead of just listing where we are.” He says that he is willing to give up his privacy, but won’t even use Google Latitude. He’d rather use Foursquare because of the entertainment value attached to it (badges, points and a sense of businesses offering services/deals). But most people are hearing companies offer coupons and deals. So is that it? What’s the major push to drive geolocation marketing to the mass media?

What is Vaynermedia Trying to Prove?

VaynerMedia may have proved geolocations viability in the marketing mix…in their case study, they focused on utilizing Gowalla to help the NBA’s New Jersey Nets achieve several key objectives:

  • To validate geolocations’ existence within the event marketing space. VaynerMedia wanted to know whether the “right brand(s) and incentives, combined with the targeted consumer campaign ‘move the needle’.
  • The strategic and tactical use of geolocation as an in-market campaign to help make the New Jersey Nets the first professional sports team to “truly” embrace geolocation.
  • Introduce new consumer demographics to Nets basketball while providing a “superb experience” for Gowalla users. Could these two brands partner together to improve on brand loyalty and equity at a very low cost? The deal centered around having no marketing budget allocated towards traditional marketing (television, radio or print) or even typical online marketing (banner ads, Facebook ads, etc.). It became a test of how viable this program would be via Word of Mouth.

How the Plan Worked

VaynerMedia's Gowalla Campaign for the New Jersey Nets
VaynerMedia’s Gowalla Campaign for the New Jersey Nets

Through the use of virtual goods, VaynerMedia created New Jersey Nets “tickets” and digitally planted them throughout the New York City area. Through Gowalla, 250 pairs of tickets were within a 75-mile radius of Izod Center, the home of the Nets in East Rutherford, New Jersey.

The areas targeted by VaynerMedia included sports-themed and outdoor locations to help them reach their audience – those enthusiastic about sports or outdoor activities. Makes sense for a demographic interested in going to a basketball game, right?

But they weren’t finished there. VaynerMedia felt that by simply getting the ticket holder to the game wasn’t enough. So they enhanced the program by giving out virtual goods during the game that you could redeem for memorabilia that the Nets would give out while you were there watching the Nets. Positive reinforcement to stay and root for the Nets?

But Why Gowalla?

VaynerMedia’s case study states that they’re fond of other platforms like Foursquare and Brightkite, but in Gowalla’s case, they appreciate that this specific platform emphasizes virtual goods and items that can be redeemable for prizes. So almost like you’re playing in a virtual & mobile Chuck E Cheese restaurant. You play a game, get coupons and once you get enough, you can redeem it for that scooter. Don’t have enough, you can still get a prize…that rubber snake that has no use. Some examples of Gowalla’s partnerships include planting an Adobe product in their system. When users found that, they would receive a free copy of Adobe’s brand new Creative Suite 5 – at least a $1,300 value!

The New Jersey Nets and VaynerMedia rolled out this plan on April 2, 2010, with an announcement on their respective blogs with the Nets sending out a press release afterward. Soon after the news hit Twitter, VaynerMedia claims that the initial wave of responses was predominantly positive, but there are some notable critics of the plan. The case study cited one negative press from Business Insider which was entitled “Gowalla Will Try To Trick People Into Attending Nets Game”. Although a repeat of the press release, the article did have one bit of positive spin to it: “If this stunt helps bring fans in, it would be good for Gowalla. It would show that it can move consumers.”

Social media reactions to the New Jersey Nets' Gowalla campaign.
Social media reactions to the New Jersey Nets’ Gowalla campaign.

Public Reaction to the Net’s Gowalla Promotion

Amazingly the public was pretty much in support of this Gowalla program. So much, it seems, that they were jealous that the New Jersey Nets were leveraging this program and not their own sports team. And it wasn’t just basketball fans, but also hockey fans as well. People who had tickets to a Nets game were so excited that they shared their good news with their Twitter followers. Some comments included:

I just won nets ticket with gowalla!!! I didn’t even know you could win things with gowalla; maybe I should check in more for free sway.@michaelhannah

Just won a pair of Nets tickets from @gowalla! Has foursquare ever given anyone Nets tickets? Didn’t think so!@PocketAces21

To add additional benefits to the program, as a result of the Gowalla strategy, both brands found that the people were becoming more engaged with their companies. People were talking to Gowalla about the tickets and also to the New Jersey Net’s Twitter account.

From Virtual to In Real Life

New Jersey Nets fans meeting in real life.
New Jersey Nets fans meeting in real life.

So what was the plan after awarding tickets to Nets basketball games? Was it to simply give them tickets and ignore them and not get to know the winners?

No, this wasn’t about being a “fly by night” operation.

VaynerMedia worked with the New Jersey Nets to have the winners come to the IZOD Center for the April 12th game where the Nets were playing the Charlotte Bobcats and go to the box office. There, after presenting their Gowalla credentials, they were taken to a special table where they received more prizes: t-shirts, stickers and the biggest prize of the evening: their tickets!

To help tie it all in, winners were reminded to check in on Gowalla to let their friends know where they were and also to win one of several Nets jerseys made available by the team.

The Measurable Results

While getting to meet people is fine and letting them check in and win tickets is probably expected, chances are that your boss or someone above you will want to see some sort of figure or statistic to verify the return on investment, right? So what is the benefit for a company to engage in a similar program? Well in VaynerMedia’s case, they were allotted 500 seats towards this campaign by the New Jersey Nets for the April 12, 2010 game. The result was that 76 seats were filled, a 15.2% conversion rate.

So why does VaynerMedia consider this a success? According to them, during the current season, the Nets had the NBA record for the most losses in a season, fell prone to mass injuries and even had low attendance at home — the lowest in the entire league!

So getting 76 people to fill those seats seemed to be a win for the Nets and the geolocation team. Another reason for success was that the April 12 game fell on a Monday, which typically draws lower attendance versus the weekend. And the fact that 76 people managed to find their way to the IZOD Center, which is extremely difficult to get to, especially for those coming from New York City via public transportation — one might consider just getting to the arena a win.

With all the things going against the New Jersey Nets and braving a “Lord of the Rings”-style quest to get to the arena, getting a 15.2% return on investment might seem like a win for the Nets and VaynerMedia.

But while you got the 15.2% into the seats, let’s not forget about what these social media-savvy people might be doing. VaynerMedia found that pictures and tweets were being created and sent out, thereby continuing the experience and being free advertisement for the team — if this is the experience a ticket-holder is having, then what are you missing not being at the game?

Geolocation Key Takeaways

According to VaynerMedia, the campaign managed to drive attendance to the game. While only 15.2% of winners attended, they brought with them friends, family or significant other with them. While they didn’t spend money on the ticket, they most likely spent money elsewhere throughout the arena, including concessions, parking & merchandise.

The experience of the New Jersey Nets and Gowalla didn’t stop in the virtual world either. The team continued that throughout the game. 89.5% of winners that attended the April 12 game checked in on Gowalla and were “actively engaged because of the ability to win a reward.” The point here from VaynerMedia is that engagement doesn’t stop at any one point. Keep it going even at the event!

Gowalla learned how to try and reach a new demographic. The VaynerMedia case study indicates that this program created a whole new experience for them. The geolocation-savvy users would not have been a demographic the basketball team would have been able to reach in the first place if not for VaynerMedia and the inclusion of a geolocation platform.

Ticket winners wanted to also be actively conversing throughout the game. From arrival until they left, news and media from the game spread throughout the Internet. This would be great additional press for the New Jersey Nets. For me, this is not surprising since if you get a bunch of geolocation fans in any one area, a majority of the time you’re going to find that they don’t just use geolocation, but understand the integration of Twitter, Twitpic and a slew of other social media tools. Leverage that.

So just how satisfied were the New Jersey Nets with this program? Joseph Stetson, Senior Director of Marketing for the New Jersey Nets basketball organization is quoted as saying:

This program proved to be a success on many levels. It enabled us to reach a very desirable target of active mobile web and social media users. Most of the participants were enjoying Nets basketball for the first time and we expect most of them to return again to hopefully become lifetime Nets fans. Through just this pilot program, we have already planned out various extensions and applications that could benefit multiple business units and marketing initiatives including ticket sales, sponsorship activation, advertising, database building and digital applications.

Is this case study a convincing argument for using geolocation in your marketing mix? I’m not sure…but it’s getting us one step closer to trying an establish some real understanding of how to truly leverage it and take it seriously as a marketing tool.

You can read more about VaynerMedia’s case study with Gowalla and the New Jersey Nets here.

7 responses to “Checking In: VaynerMedia Shows Geolocation Can Reap Business Benefits”

  1. Mike Dougherty Avatar

    Nicely done. Great review of the case study. I downloaded it yesterday and have been sharing it around the office.

    1. Ken Yeung Avatar

      Mike – thanks for the comment. I think that VaynerMedia is on the tipping point of proving that geolocation marketing can succeed, but I think a lot of people are still skeptical. Wonder what other marketers think about this case study.

  2. gosam Avatar
    gosam

    Ken, thanks for posting such an in-depth summary. Great stuff! I think you nailed it with your last sentence. Our goal was to get the conversation moving and prove that geolocation can help businesses (especially in the live events space), if used correctly!

    1. Ken Yeung Avatar

      Sam – thanks for your comment and good job on the case study. A question though…while this is a good step forward to getting “the conversation moving”, how else do you see geolocation going to help businesses besides simply adding in coupons and deals? It's definitely a network tool that people can use to assess how popular an event is & you can give them virtual goods that can be redeemed – like Adobe did with Gowalla & what you guys did with the Nets. But what's next beyond this?

      1. gosam Avatar
        gosam

        Ken, great question! One thing I would say is that geolocation has the ability to add value to actual events. With tools like Hot Potato, a location-based events-focused platform, you can converse in real-time with other people in the same location/event as you! Sure, tools like Twitter allow us to do similar things, but Twitter isn't necessarily the _best_ tool to use in that instance. So, geolocation can be a great networking tool for people at an event, and brands can & should hop right into that conversation.

        I also think that this campaign was more than simply offering a “coupon.” It was about the manner in which winners were able to find their rewards, and the unique experience they gained because of it. We partnered a new demographic with a sporting event in order to hopefully provide a fantastic experience for winners and create new fans.

        The bottom line is that geolocation is so new (especially in the business world), and as more people join these services and the platforms continue to improve, new opportunities for business will open up.

  3. gosam Avatar
    gosam

    Ken, great question! One thing I would say is that geolocation has the ability to add value to actual events. With tools like Hot Potato, a location-based events-focused platform, you can converse in real-time with other people in the same location/event as you! Sure, tools like Twitter allow us to do similar things, but Twitter isn't necessarily the _best_ tool to use in that instance. So, geolocation can be a great networking tool for people at an event, and brands can & should hop right into that conversation.

    I also think that this campaign was more than simply offering a “coupon.” It was about the manner in which winners were able to find their rewards, and the unique experience they gained because of it. We partnered a new demographic with a sporting event in order to hopefully provide a fantastic experience for winners and create new fans.

    The bottom line is that geolocation is so new (especially in the business world), and as more people join these services and the platforms continue to improve, new opportunities for business will open up.

  4. rounak Avatar

    thanks for the post ken, i am sure it tool alot of time to write this much 🙂

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