Checking In: VaynerMedia Tries To Prove Geolocation Can Reap Business Benefits

Earlier today, the team at VaynerMedia, operated by the team of brothers, Gary & AJ Vaynerchuk, released a startling 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 make “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 Case Study on Geolocation

CAN GEOLOCATION REALLY 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 that have said that there’s no value in simply offering coupons and discounts to people who frequently check-in and become “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 really 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.” In fact, he says that he’s 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 SETTING OUT 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 case study on GowallaThrough 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? I’d think so…

But why Gowalla, you ask? VaynerMedia’s case study states that they’re fond of the other platforms like FourSquare and Brightkite, but in Gowalla’s case, they appreciate that this specific platform places an emphasis on 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 afterwards. Soon after the news hit Twitter, VaynerMedia claims that the initial wave of responses were predominantly positive, but there are some notable critics of the plan. The case study cited one negative press from the Business Insider which was entitled “Gowalla Will Try To Trick People Into Attending Nets Game“. Although basically 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 good for Gowalla. It would show that it can move consumers.

VaynerMedia case study on Gowalla - Twitter reactions

What was the general Twitter public’s 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 that won the 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.

MOVING PAST VIRTUAL TO IN REAL LIFE

VaynerMedia case study on Gowalla - 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.

SHOW ME MEASUREABLE 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 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 & 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 apparently 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. So through 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 saavy people might be doing. VaynerMedia found that pictures and tweets were being created and sent out, thereby continuing the experience and basically 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?

LESSONS LEARNED & 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 apparently learned how to try and reach a new demographic. The VaynerMedia case study indicates that this program created a whole new experience for them. In fact, the geolocation saavy 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 towards 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 on 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 by clicking here.

By Ken Yeung

Ken Yeung is a journalist fascinated with the tech industry and internet culture. He's currently Flipboard's Assistant Managing Editor, overseeing news curation in technology, science, gaming and health. In addition to his day job, Ken's the co-host of "The Created Economy" podcast, examining the Creator Economy. In a past life, he was a former reporter for VentureBeat and The Next Web, covering tech startups, the industry's innovations and funding.