Putting Percentages into Perspective: is better Facebook than Foursquare?

A recent report came out with statistics on the usage of social media and location based social media. The percentages revealed seem to paint a sorry picture for location based services like Foursqaure. On the other hand, Facebook paints itself a rosy picture, and comes out looking like the be all and end all of social media. How true is it? Let’s do a reality check.

Putting percentages into perspective

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What do the statistics say? They say that 28% of the US population uses Facebook. 11% of the US population uses Twitter. What’s the percentage for location based services? 4%. But hold on, only 1% people actually use their accounts actively. Compared to Facebook’s whopping 28%, 1% sounds diminutive. Considering US has a population of about 307 million, 1% means 3.07 million people. Doesn’t sound like a small number any more, does it? Think about it, you have a target audience of 3.07 million people to market to. All these people use a location based service at least once a week.

3.07 million is greater than 500 million

Let’s not talk mathematics here. From a marketing perspective, if you are running a local business, the 3.07 million users on location based services mean more to you than the 500 million users on Facebook. Why? You can’t target a particular demographic on Facebook. Well, you can target an ad at them, but they see it only when they are sitting in the comfort of their home.

David Breshears does a good job of explaining what we mean when he writes on TheSocialScene.wordpress.com:

I’m sitting at the bar, enjoying a happy hour cocktail, and decide to “check in” via Foursquare (or Gowalla, BrightKite, or any other LBS). A notification appears, informing me that the restaurant next door is offering free appetizers to Foursquare users. I’ve never tried the place, but a quick perusal of reviews that accompany the business listing on Foursquare makes me think it’s a place I’ll like. When I check in at the restaurant, three more notifications appear, one of which is for matinee-priced admission to the next showing of Inception at the theater across the street.

The major difference, in case you haven’t noticed yet, is that the user actually wants these advertisements. In fact, the only reason he has signed up is to see these advertisements. Contrast this to Facebook, where an advertisement has to be perfectly designed to catch a user’s attention.

Pin your hopes on the mobile market

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There is a limit to how much a service can grow. Facebook is nearing the peak of its growth. Twitter will soon catch up and its growth rate will decrease as well. But users are only just beginning to discover location based services. The reason for this can be attributed to a certain company that goes by the name of a fruit. When it invented the iPhone in 2007, it made web browsing on mobile devices popular. Since then, all devices encourage users to use web based applications. As the reach of Android and iOS grows, the number of users using Foursquare, Gowalla, etc is only going to go up. Their growth is going to piggyback on the growth of the smartphone market.

So, the next time a cynic says you should advertise on Facebook because they have 28% of the US population, smirk and congratulate yourself because you know better.