It’s Scalability Stupid

Posted by: in location-based marketing, Marketing Insights, Pre-Commerce, Social Media Insights & Trends, Thinking Creatively, Thought Leadership on November 2, 2012

Okay, I am not calling anyone stupid. I am of course stealing a phrase from James Carville, campaign strategist of former President, Bill Clinton, whom famously stated, “the economy, stupid,” during Clinton’s run against then incumbent, George Bush. In this case, I’m merely pointing out something that should be glaringly obvious to companies that are building new social, mobile and location-based services.

Last week, I stirred the pot a bit in my monthly Marketing Land post titled, The Future of Location-Based Marketing is not Foursquare. While I expected the post to strike a nerve, I was a little surprised by the number of people that agreed with me. More importantly, many of the people that read and/or shared the post concurred with my one central premise i.e. that it’s foursquare’s lack of scale that has — and will continue to — hurt the service from growing and scaling.

Now to clarify, I do still like and support foursquare. In fact, I still hold out hope that they will be able to find the traction they need to become more ubiquitous. But to date, the fact that foursquare has only 25 million users puzzles me. I can speculate why this has happened (not enough offers, too early for the mass market, lack of smart phone penetration), the fact that foursquare hasn’t managed to scale is one of the main reasons why Fortune 1000 companies are shying away from using it.

For anyone that has been involved in social media in some sort of business capacity, the ubiquity of social media these days is a blessing and a curse. It’s nice that companies are now taking Facebook, Youtube, Twitter and blogging seriously — even investing paid media dollars against it. But it means that those networks that don’t take hold quickly risk falling to the wayside. Look at services like Bizzy, Color and Ditto. All showed signs of promising futures or significant investor dollars and all either fell off the map/pulled the plug/or ended up being acquired for pennies on the dollar within 24 months of launching.

On the other hand  services like Instagram (80 million), Pinterest (100 million), Google Plus (250 million) and recently launched, Viddy (40 million), are all gaining attention from brands because of their rapid growth. This doesn’t guarantee that these networks will be successful, but their critical mass provides enough users for companies to get excited about.

So as a marketer, what do you take away from this? For one, you should make sure you or your team are keeping your eyes and ears open for new technologies/apps/social networks. And As you are evaluating these opportunities, it’s critical to consider “do I get this?” Or if you don’t, is the service or technology intuitive to the target audience (if you have children or nephews/nieces, are they embracing it)? If the answer to that first question, the second is, is the service/technology gaining critical mass. That doesn’t mean it needs millions of followers by month one, but it should be on track to hockey stick up at some point over the next 12-18 months.

Which new technologies/apps/social networks are you paying attention to these days? Are they scaling?


By: Aaron Strout

Aaron is the President of WCG, one of the three agencies under the W2O Group umbrella. He is a regular contributor to Marketing Land and a co-host of video podcast, Live from Stubbs.

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