Fixing Foursquare

 

I like Foursquare. I do. Big fan. And it seemed off to a great start, but I can’t help but notice that even with impressive growth,  its sails aren’t quite as taut as they were a year ago. Checking-in to places isn’t as fun as it used to be. Chasing mayorships has become somewhat pointless. Not to mention that most of us have run out of interesting badges to earn and collect.

Granted, Foursquare did announce a bunch of new badges this month, mostly geared towards institutions of higher learning. This emphasis on university partnerships (and its associated under-30 demo) is a good start, but slow-moving and fairly limited. Ski resorts are also getting some attention, as are several major brands. And it is worth mentioning that Foursquare has been releasing a slow trickle of hobby/interest badges like Yoga Masters, Handmade Hero, DIY, and Black History Month. These are encouraging signs, as more badges (new badges) will help drive adoption and participation. And yes, with enough funding to last through 2011, Foursquare will make payroll and continue to push towards growth. (The service expects to almost double its reach by June with 10 million users.) Its net growth in 2010 was also impressive (measured in new accounts): 3,400%, with more than 380 million check-ins (for an average of just over a million check-ins per day).

Note: If you are interested in Foursquare’s growth statistics, check out their fly 2010 infographic here.

But here is the problem: While those numbers are nice, I can’t help but sense that many of my peers are losing interest. Some have even jumped over to other services like Gowalla, whose broader selection of badges has helped keep users interested and entertained. And then there is the question of revenue (which, even in this sequel to the first internet bubble, is kind of an important component of any business).  Sooner or later, companies have to find themselves in the black, pay back investors, and turn a profit.

I could be wrong, but it seems that aside from being carried by its own marketing momentum, Foursquare is in danger of falling short of the market dominance it will need to ensure its own survival, profitability and longevity. Just as there can’t be two Facebooks (MySpace used to be a big deal) or two Twitters (remember Plurk?), Foursquare can’t really afford to engineer a stalemate with competing services like Places or Gowalla. Whomever scales the fastest, whomever recruits the most users and figures out its revenue model first will win this race. Unfortunately, my beloved Foursquare seems to be on a different timetable altogether, and that worries me. From a recent story in Information Week:

To differentiate itself from its larger competitors, to continue its growth, and to add to its coffers, Foursquare plans to forge more partnerships with local businesses and artists, as well as offer recommendations such as where to eat a meal, see a concert, or attend a show. In addition, Foursquare hopes to attract more musicians so fans will have the opportunity to follow their activities online, he said at the music-focused event.

“I’d love to get a lot more artists onto Foursquare, that’s an easy one,”  said [Foursquare co-founder Naveen Selvadurai] in an interview. “Getting a lot of artists onto the system and seeing the world through their eyes is a very powerful thing. What better way to engage with people you admire than something like [Foursquare]? I hope in a year’s time that we’ll be able to do that with a lot more artists. That’s something I find immensely exciting and very valuable.”

Foursquare also is developing tools to further help local businesses, in addition to its existing national client base such as PepsiCo and Zagat Survey, tap the social media site for advertising, loyalty programs, and other incentives, said Selvadurai. And the company continues to develop the concept of Foursquare itself, he said.

 

What I don’t see anywhere yet is a plan to accelerate adoption and develop a solid revenue model. I don’t yet see the clutch strategy. So… why don’t we look at a simple little idea that could be plugged into Foursquare’s current business model – an idea that would get things rolling a little faster for my favorite little smartphone app – and perhaps more importantly: a solution that would help me and other marketing folks sell all of our clients on the virtues of incorporating Foursquare into their marketing and business development programs.

Okay, so here is how simple the idea is:

Step 1 – Build a badge store (actually more like a badge marketplace) where companies looking for ways to incorporate Foursquare into their marketing programs can partner with designers to create their own unique custom badges.

Step 2 – Allow these companies to plug their new badges and marketing programs into Foursquare’s account management dashboard. Create different levels of management and reporting service, from free to enterprise-class, to give different types of customers and programs the flexibility they need.

Let’s run through how this would work:

1. Company XYZ creates an account, visits the badge store, identifies a designer it wants to work with, and orders a custom badge. Once the order is placed, Foursquare’s badge store collects its cut (illustrated below as 30%). The designer collects his cut (illustrated below as 70%). Badge prices are determined by market forces, so a badge could realistically fall anywhere between $50 to $500 depending on the designer. (Foursquare could set minimums like Amazon, to keep the marketplace viable.)

See what happened here? Several things:

• Foursquare just generated revenue.
• Graphic designers have found a new way to generate revenue and gain exposure. (Yes, there is an affiliate element to this.)
• Foursquare didn’t have to hire and pay in-house designers. All they had to build was a design engine and a marketplace.
• The badge store eliminates Foursquare’s design capacity problem.
• Companies of all sizes (not just major brands) can now begin to take full advantage of Foursquare on their own schedule.

Still with me? Okay…

2. When Company XYZ registers its badge with Foursquare through the marketplace it can select from a variety of campaign and program management dashboards if it is new to the badge store, or add the badge to an existing account:

New badge creation and registration

Selection of back-end Foursquare services

In this step, Foursquare gets a chance to generate revenue a second time, through monthly subscriptions to premium back-end management and analytics products.

Company XYZ selects the type of dashboard, management and reporting that seems most adequate for its new badge and the marketing/loyalty/rewards program it aims to build for it. The free service would be helpful for small businesses but obviously limited in its capabilities. Gold would be a full suite of enterprise-level tools for brands with large footprints and complex databases –  like McDonald’s, Delta Airlines, Best Buy, Target and Barnes & Noble, for example. Bronze and silver could be anything in between. Company XYZ can upgrade or downgrade at any time, based on its needs.

3. Equipped with custom badges, custom rewards programs and management tools, Company XYZ can now roll out its new badge with all the fanfare it deserves:

Business adoption + Cool Factor + Value to consumers = Consumer adoption.

 

To recap the basic intertwined mechanisms that make this all work:

Custom badges + back-end tools = Accelerated business adoption.

Business adoption + Cool Factor + Value to consumers = Accelerated consumer adoption.

Consumer adoption + Competition + Ease of Enrollment = Accelerated business adoption (again).

As the cycle then repeats itself, it begins to scale:

Consumer adoption + business adoption = momentum

 

That’s basically it. It’s pretty simple, but that is the beauty of it: Businesses just need to be motivated to adopt and use Foursquare. Likewise, consumers need to be motivated to do the same. No new badges or rewards programs for consumers = no motivation to participate. No access to custom badges and user-friendly campaign management tools = barrier of entry for most businesses.  This is a compounded problem that threatens to stall Foursquare’s growth. The service shouldn’t be shooting for 10 million users by June. It should be looking at 20+ million by now.

The solution: Create a mechanism that eliminates barriers of entry. One that will drive business adoption and the creation of new badges, which in turn will drive consumer participation. The more businesses participate, the more consumers participate. The more consumers participate, the more the business long tail will be motivated to check out the badge store and test Foursquare. That is the basic adoption acceleration engine.

The revenue side of the solution:

Foursquare skims a % off custom badge orders through the badge store (similar to Amazon’s KDP program).

Foursquare also charges a monthly fee for premium analytics and management tools.

Authorized designers generate revenue through the sale of custom badge design on the badge store.

Companies enrolled in the program can track the ROI of their Foursquare-enhanced campaigns and programs with Foursquare analytics (the point of the investment being to drive more business by either acquiring new customers through foursquare, increasing the frequency of participating customers’ visits to a store, or developing customers over time to increase their average purchase volume).

Simple. Effective. Worth a try.

Nothing against creating badges for universities, hobbies and artists. That still needs to happen. But this might be a nice way to speed things up and outpace the competition. It could also potentially eliminate the need for any further funding well ahead of schedule. Something to think about.

Cheers,

Olivier.

 

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What the McDonald’s social media team got wrong about Foursquare, Social Media strategy, measurement, and ethical reporting.

Alternate title:

McFib?

Thanks to Mike Zavarello (@brightmatrix) for the #McFib suggestion. I wish I had thought of that.

Okay. This is not going to be a kind, warm and fuzzy post. Before I start, let me say this: I would much rather have a brilliant Social Media case study to champion. A story about a company doing something right, with data to back up its results, clean metrics to boot, and flawless analysis from start to finish. Wieden + Kennedy’s Old Spice campaign will soon be the subject of such a post, when more sales numbers are made available. But as things stand, this post is not going to be about a company that got things right.

What we are going to talk about today is either a case study in either poor journalism (Mashable reported on the story without questioning and verifying the math), or the origin of questionable claims by a McDonald’s representative about a Foursquare promotion’s alleged outcome. I don’t want to speak ill of the company (I actually like McDonald’s), but I can’t not bring this up.

(UPDATE: 19 September 2010) Look for an update to this story at the end of the post.

Here is how the story begins (via Mashable):

At the Mobile Social Communications conference yesterday, [Rick] Wion shared that McDonald’s was able to increase foot traffic to stores by 33% in one day with a little Foursquare ingenuity. McDonald’s total cost for the successful campaign was a measly $1,000.

Econsultancy reports that McDonald’s, with Wion driving campaign direction and strategy, opted to try and take advantage of Foursquare Day (4/16) to bring in more business. The company used 100 randomly awarded $5 and $10 giftcards as checkin bait to lure in potential diners. The bait also worked to attract the media’s attention and resulted in more than 50 articles covering McDonald’s Foursquare special.

The campaign worked in both digital and real world capacities. Patrons flocked to McDonald’s restaurants for the chance to win giftcards in exchange for checkins, and 600,000 online denizens opted to follow and fan the brand on social media sites.

The Econsultancy piece is here. Sounds great, right? Here is what you just heard: McDonald’s spent $1,000 on a campaign, leveraged Foursquare to get people in the door, and increased foot traffic by 33%, resulting in some unknown but probably decent spike in business (sales.) Except no. That isn’t what happened. There’s also this:

Of course, the metric here was checkins (not sales), and there were likely several other factors contributing to the campaign’s success, but it’s still a story that many an agency should pay heed to.

Let me quote that again, in case you missed it:

“The metric here was checkins (not sales).” Or actual foot traffic, apparently.

Oh. Take the pig off the spit – the celebration might be a little premature. Right idea, wrong execution, and horrendous analysis. Let me explain.

1. In spite of its “conclusion,” did McDonald’s measure actual foot traffic?

This was a test. The premise was this: If we spend $1,000 on a Social Media promotion using Foursquare, can we get more people in stores? The most important metric to measure then, both as a baseline and an ultimate outcome would be what?

Foot traffic. Actual foot traffic. As in… someone with a clicker standing at the door, a laser in the door way recording how many times someone passes through it, or a sensor in the door recording how many times it opens and closes. Unfortunately, unless Mashable forgot to mention it, McDonald’s did not actually measure foot traffic.

Wait… what?

That’s right: Though Rick Wion claims to have increased foot traffic by 33%, nowhere does the piece mention that McDonald’s actually measured foot traffic. The only metric mentioned: Foursquare Check-ins.

The one thing McDonald’s should have measured, the very metric Rick Wion is reporting jumped by 33% in one day, is the one metric that may not in fact have been measured at all.

Here is how you measure deltas/changes in foot traffic:

1. Lock in your baseline (the average daily foot traffic before the campaign).

2. Measure average daily foot traffic during your campaign.

3. Compare the two.

What you measure are actual people actually walking into actual stores, not people checking-in from their phones three blocks away or clicking a “like” button on Facebook from their desk, or clicking “follow” on their twitterberry. You measure people in the stores.

If McDonald’s Wion wants to report on a win (as well he should), it should be this: “With only $1,000 investment, we increased Foursquare check-ins by x%.” That is what actually happened. This is the extent of a win. It isn’t as sexy as claiming a 33% increase in foot traffic, but it’s a start. A proof of concept. Something McDonald’s can now build on and expand.

I now leave Ronald McDonald’s Social Media team and Rick Wion to explain how exactly how check-ins conveniently transformed themselves into foot traffic.

2. Metrics are not randomly interchangeable:

Here’s a simple, basic, no BS fact of Social Media performance measurement: A Foursquare check-in is not foot traffic. Foot traffic is not a Foursquare check-in. Here is the difference between the two:

– Foot traffic is someone coming into your store.

– A Foursquare check-in is someone within five city blocks of your store pushing a button on their phone.

Case in point:

@lizy_dee: I just checked in to some McDonalds up the road while I’m sitting on my couch at home.. #fail

Likewise, mentions are not sales, and new followers aren’t new customers. Metrics are not randomly interchangeable. Metrics are specific. Don’t measure one thing and magically turn it into another to embellish your quarterly report and get some media attention.

3. Contests are not strategies. People will do anything for free stuff and then move on:

“Do this and you might win something. One day only!” Here, McDonald’s has at its disposal the combined power of the Social Web and mobile phones, with a potential reach of hundreds of millions of people. It has a chance to increase net new customers, increase customer loyalty, earn mind-share, impact preferences and customer habits in the long term… But no. McDonald’s big Social Media idea was to attach the typical one-day-only contest carrot – which requires neither Foursquare nor Social Media of any sort – to get people into its stores for one day (which it may not have actually accomplished since it measured the wrong thing).

I will, however, grant McDonald’s Wion this: His experiment proved that promotions in which people might win free stuff if they push on a button will make some of them push the button. Unfortunately, we already knew that. We can get lab rats to do it as well, even without a social media strategist.

The fact is that tying Foursquare check-ins to a promotion doesn’t prove that Foursquare will work for you, or that you know how to leverage it yet. The Foursquare check-in feature is a button people push to get their prize, not the reason why they came to your store. Let me illustrate:

Replace the term “Foursquare check-in” with “funny hat”.

If your promotion had asked people to wear a funny hat to your stores for a chance to win a gift card, would you be saying that funny hats helped you generate 33% in additional foot traffic? Here’s an example:

At the Mobile Social Communications conference yesterday, [Rick] Wion shared that McDonald’s was able to increase foot traffic to stores by 33% in one day with a little funny hat ingenuity. McDonald’s total cost for the successful campaign was a measly $1,000.

The company used 100 randomly awarded $5 and $10 giftcards as checkin bait to lure in potential diners. The bait also worked to attract the media’s attention and resulted in more than 50 articles covering McDonald’s funny hat special.

Patrons flocked to McDonald’s restaurants for the chance to win giftcards in exchange for wearing funny hats.

See what I mean? What’s your Foursquare strategy again? Is it the same as your funny hat strategy or your pink tie strategy or your flip-flop strategy?

Here’s a little dose of reality: This was a promotion just like every other promotion before it. Push the button we ask you to push, give us the magic password, and maybe win something. Foursquare was an accessory, not the catalyst. Even if McDonald’s had actually seen a 33% increase in visits to their restaurants on that day, the gift card promotion, not Foursquare, got people to participate.

4. “It’s still a story that many an agency should pay heed to.” Um, no. Absolutely not.

Unless what you want to do is teach agencies that not measuring relevant campaign outcomes, mistaking one metric for another, making up numbers entirely, not understanding basic Social Media marketing strategy and having no clue how to tie campaign metrics to business metrics is the right path.

There is already plenty of that going on on. We need less of it, not more.

5. Take your case studies seriously: McDonald’s should have measured conversions. Here’s how to do it:

What Rick Wion and his team should have done:

600,000 new fans and followers? That’s “Reach.” That’s your starting point. Here’s your conversion chart:

Reach → Response → Visits → Foursquare Check-ins → Transactions → Revenue (then repeat)

Don’t know how to put these things together? It’s simple:

Reach, we’ve already touched on.

Responses can be anything from RSVPs on Facebook, to registrations or sign-ups on a microsite, to mentions to RTs on Twitter.

Visits are your first real measurable conversion. You actually have to count visitors. Not estimate but count. If the suggestions I made earlier in the post are not feasible, look into software that will allow you to count visitors by analyzing your CCTV feeds. (Your surveillance cameras capture foot traffic in and out of the store, and to the cash register. Put them to good use.)

Foursquare Check-ins are simple. By the way, since these check-ins have location data, you do realize that you can map check-ins nationally and therefore assign check-in volume to specific stores, right? So, you can see what areas are responding well to your campaign, and what areas are not? In terms of targeting, this is gold. I hope McDonald’s Social Media team is paying attention. Rick, your team knows how to do this, right?

Transactions are pretty basic. Now that you have your foot traffic data, not only nation-wide but also per individual store, you can see store by store what the deltas/changes are. Now that you also have Foursquare check-in data store-by store, you can overlay that data with your foot traffic data. This gives you a nice composite of increased foot traffic per store + volume of check-ins per store. See where I am going with this? Okay, now, the last bit of data: Look at the volume of net transactions per store next to these two metrics. What you are looking for is this: Stores in which foot traffic, foursquare check-ins  and net transactions rose together. This is where you begin to see the path from action to reaction to R.O.I.

Revenue is the final metric you need to calculate the R.O.I. of your $1,000 campaign. You’ve already looked at foot traffic, check-ins and net transactions. The “net new” numbers in the data set that show an increase in all 3 is where you can PROVE that your activity had an impact on business performance. There are several ways of assigning a dollar value to your campaign’s net gain, but the fastest is to calculate the corresponding percentage of net $revenue to the percentage of net new transactions in that data set. This is your hard number: The 100% unquestionable net gain (in revenue) from your investment. If your campaign cost $1,000, you can now prove that revenue generated that day by your campaign was $x. With this data, you can present the board (and the general public) with a real case study. One with an actual process, proper measurement, and measurable facts including R.O.I.

Behind closed doors, you can also look at collateral outcomes: Those you suspect but cannot prove 100%. This would be an increase in sales revenue that can be attributed to increased foot traffic, but not Foursquare check-ins, for example.

That is how it is done. I suspect that other people at McDonald’s already know this, which is why the company has been so successful.

Note: The campaign’s cost was not merely $1,000. Also factor in the salaries of McDonald’s Social Media team, the equipment they use, the software they use, the training they have received, the conferences they attend, and other costs associated with their “management” of this campaign to get a more accurate value.

6. Mashable, when someone hands you a cup of Koolaid, check it before drinking it.

Mashable, I love you. I really do. If you were a person, I would hang out with you a lot. In a way, we already do. And it is because I love you that I have to tell you to be careful: You’re the popular kid in the class who can help make reputations. If you like someone, suddenly everyone likes them too. You can make nerds popular with a mere wave of your magic wand. That makes you a target for clever PR people with a story to sell and the talent to sucker you in. Usually, you smell what’s cooking. This time, I think you jumped too soon on the opportunity for a scoop. And yeah, your traffic is pretty solid. You’re going to be generating a lot of advertising dollars from this McDonald’s story. But you didn’t have to buy into it hook, line and sinker:

“Foursquare ingenuity” – Except it wasn’t. There was nothing ingenious about the campaign or its use of Foursquare, not to mention that the measurement piece is a disaster.

“the successful campaign” – No.

“netted the company measurable success” – No again.

“Patrons flocked to McDonald’s restaurants” – Nicely written, but still no. Is there proof of “flocking?”

Or is it that you were so impressed with what you heard that you forgot to mention the other metrics used by McDonald’s? Metrics like… actual foot traffic? Or transactions? Anything that might back up Rick’s assertion that foot traffic increased by 33% on Foursquare Day? If McDonald’s has this data and you failed to report it, (even going as far as to say that “the metric” was Foursquare check-ins), you just made Rick look bad.

Whatever the case may be, Mashable, you can do better than this.

What can we learn from this? Several things:

1. With many companies desperate for a Social Media win, questionable “case studies” like this one are bound to start popping up at conferences and on sites like Mashable with increasing regularity.

2. Social Media Directors with little understanding of the space in terms of strategy, program development, Social Business planning, program integration, program management and performance measurement are still the norm. (This will be the topic of my next post.) This may or may not be the case with Rick Wion. I don’t know that yet.

3. What this kind of story illustrates is this: When few people understand how to leverage the Social Web to create specific business outcomes and measure them properly, Social Media “experts” can make a complete fiasco of a campaign sound like a Social Media knockout victory with a few carefully selected words.

4. Headlines and anecdotal “evidence” are so easily consumed that facts tend to get lost in the PR copy, and trusted sources don’t always understand their subject enough to spot red flags. Even eConsultancy and Mashable are vulnerable.

5. A tough job market for Marketing professionals, the promise of fame, influence and perhaps a book deal, and little understanding of proper Social Media measurement from the C-suite combine to create the perfect environment for less than qualified individuals to pose as qualified Social Media Directors.

Many companies have them in their midst and have no idea that their Social Media experiment has been put in the hands of someone with absolutely no idea what they are doing. Whether the McDonald’s/Foursquare experiment turns out to be the result of poor methodology or poor reporting by Mashable and eConsultancy is still unclear, but it does illustrate the danger of operating in a medium that so few executives, marketers and journalists understand. My inbox and DM column are full of questions from “Social Media Directors” and VPs who pass themselves off as experts yet show a disturbing lack of even basic Social Media knowledge. Just because someone’s job title is “Social Media Director” doesn’t mean they even know how people use Twitter. (I am not exaggerating.) The fact that I still have to explain R.O.I. to Social Media “experts” is also indicative of the gap between “perceived” knowledge in the industry and “actual” knowledge in the industry. Someone’s job title does not guarantee their expertise, especially in this field.

This is the kind of BS that drives me ba. na. nas.

UPDATE DETAILS: 19 September 2010

Mashable has changed the title of its story to “McDonald’s Foursquare Day Campaign Increased Checkins by 33%” and added the following caption:

“Update: McDonald’s head of social media Rick Wion tweeted that, “the 33% increase was in the number of checkins. We consider checkins the same as a person entering the restaurant.” (Original tweet)

This helps explain this statement from Rick Wion last week:

“I was able to go to some of our marketing people — some of whom had never heard of Foursquare — and say, ‘Guess what. With this one little effort, we were able to get a 33% increase in foot traffic to the stores.'”

Kudos to Mashable for catching the error of their original title and article, which supported Rick’s assertion that a 33% increase in foot traffic had in fact resulted from its Foursquare Day promotion.

No data to support that an actual 33% increase in foot traffic occurred on that day has yet been produced by Rick Wion or McDonald’s.

Yet, from Rick Wion’s own blog:

Note the headline: “33% More Foot Traffic.”

Tip to business owners and C-suite executives: When your “Social Media Director” doesn’t know the difference between an increase in Foursquare Check-ins and actual foot traffic in your stores, consider it a giant red flag.

If you don’t know why, here it is. In order for your business to be able to substitute Foursquare Check-ins and foot traffic, you need all three of these elements to be true:

1. 100% of your customers must be Foursquare users.

2. 100% of your customers must check-in to Foursquare 100% of the time when they visit one of your stores.

3. 100% of Foursquare users are always honest about their check-ins. No one EVER registers a false check-in to game the system.

These are the requirements. If you do not have all three of these elements in place, you cannot ensure a match between Foursquare check-ins and actual foot traffic in your stores.

As it is, McDonald’s (or any business anywhere) would be hard-pressed to establish that even 20% of their customers are Foursquare users, much less 100%.

You can see where Rick’s belief that Foursquare check-ins are “the same as a person entering the restaurant,” his statement “with this one little effort, we were able to get a 33% increase in foot traffic to the stores,” and the title of the September 17 post on his own blog are… problematic.

At the very least, this case illustrates the danger of assuming that a Social Media Director is qualified to develop and manage a Social Media program just because s/he holds a Director-level position with a reputable company or major brand.  More often than not, they are not.

For an excellent analysis of the McDonald’s “campaign,” I recommend that you read Thomas Baekdal’s post on the subject, which offers numbers and real data. Click here.

Among the most insightful bits of data:

The underlying problem is that McDonald’s [serves] about 26 million customers per day, meaning a 33% increase equals 7.8 million foursquare users. But, Foursquare has only a total of three million accounts (and only one million active users). You don’t have to be a math wiz to see that something is wrong.

And then this:

In terms of tweets then McDonald’s claim that nearly 600,000 people potentially noticed it via Twitter, and still only 719 people reacted to it. That is a conversion rate of 0.12%, which is below most click-trough rates of website banner ads.

It really doesn’t get any simpler than that.

UPDATE DETAILS: 21 September 2010

In this follow-up piece from eConsultancy (click here), Meghan Keane brings up the same check-in vs. foot traffic questions raised here already, and goes back to Rick Wion for clarification:

McDonald’s, boasted that a special McDonald’s ran on Foursquare Day in April increased foot traffic at McDonald’s 33%.

That’s no small number, and since not all 26 million McDonald’s customers are on Foursquare, it was a bit unclear what, exactly, had increased 33%.

With commenters and bloggers questioning the results, I followed up with Wion. As it turns out that McDonald’s results were not measured in actual foot traffic. According to Wion:

“We measured check-ins, not foot traffic, transactions, or sales, on Foursquare Day.”

That’s an over 20 million customer difference. However, Wion still stands behind his results. And he’s using this case study to justify more social media offers at McDonald’s.

Wion used the term foot traffic because he found it easier to convey the impact of the campaign:

“This kind of program was uncharted waters for us, so we needed to develop a means of measurement that translated to other commonly understood metrics within the McDonald’s system.”

No.

Note the statement “Wion used the term foot traffic because he found it easier to convey the impact of the campaign.”

Except it didn’t. What it did was completely misrepresent the impact of the campaign.  A cardinal rule of project management: You do not misrepresent results and outcomes. Ever. Not accidentally and certainly not deliberately. Everyone would find it “easier” to convey the impact of a campaign by embellishing it. Most of us, however, don’t.

The result of this alleged “decision” to substitute foot traffic for check-ins:

As a result of this breach of trust, the validity of future McDonald’s Social Media studies will unfortunately be received with suspicion, at least when they are initially released.

Rick’s trustworthiness when it comes to accurately reporting on campaign outcomes is now in doubt, especially given his choice to continue to “stand behind his results” rather than acknowledge his error, which he clearly understands.

This constitutes an unfortunate and unnecessary black eye for the fast food giant’s Social Media activities.

Poorly done all around.

Perhaps the medical profession’s “first, do no harm” ethos should be applied to the Social Media profession.

The saddest thing about this whole mess was that on its own, however small it may have been, the campaign was a success. A 33% increase in Foursquare Check-ins was something positive to report on. A basic a proof of concept. Had Rick stuck to the facts, however small, however insignificant outside his organization, he could have built upon this test with ease. In terms of moving things forward for McDonald’s in the Social and LBS space, gaining the trust of decision makers internally, building momentum for his strategies across the McDonald’s organization, the truth would have worked just fine. There was no need to misrepresent the study’s outcome.

On a more promising note, it is good to see eConsultancy and Mashable updating their reporting of this story. With a little luck, when pitched with future claims like this one, both outlets will remember what they learned this past week about verifying a company’s claims before reporting on them, especially in the still shady world of Social Media measurement.

Kudos to them for the quick turnaround.

McDonald’s, I like you a lot, but something isn’t right with your social media team in the US. You might want to take a closer look at what is going on in that department before someone does something embarrassing again. (Let’s hope this was just an accidental hiccup.)

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When we were social: Proxy Medium Darwinism 101

The world before social media

Back in the day, most people were disconnected from the world. They lived in small family groups, peer groups, villages and neighborhoods, seldom connecting with the outside world. Aside from merchants, soldiers and sailors, few ever really scaled their reach beyond a few miles from home. Yet people were social in ways that we aren’t today. Life was by its very nature social. We didn’t watch TV or surf the web or read magazines. Laundry was washed at the local laundry fountain, where all the women washed their clothes together. Without adequate refrigeration, food had to be purchased daily from crowded markets. We lived and worked in close quarters. Neighbors lived much closer to us than they do today. Our homes were less spacious, the streets narrower, and the world was something that existed well beyond a horizon we hardly ever had a chance to discover. Annual festivals, celebrations, catastrophes and cultural events pulled us together at regular intervals and cemented our bonds with each other. Some might say that we were more social then than we are now: Pressed together in an analog world where little distracted us from human interactions and bound by strong social ties, we lived and breathed together as full-fledged members of our respective communities.

Then came the industrial revolution, and mass transportation, the telephone, television and the internet… and it all changed. We grew apart. Our homes became more spacious, our yards broader, and suddenly our neighbors were little more than strangers. We turned away from each other, preferring other modes of entertainment to basic human contact. Books, magazines, television, the internet, video games, portable music, cars, sports… We essentially became anti-social. We erected walls. We separated ourselves from the community and reconnected with it only on our own terms. We stopped writing letters and began writing emails. Our daily interactions became more and more impersonal. We isolated ourselves in comfort.

Then Social Media emerged from the antisocial communications machine and changed everything.

Yesterday, Edelman Digital’s Maria Prysock and David Armano asked “would a world without social media be more social?” It immediately made me think of this clear separation between the analog world of old and the new digitalized world. Having spent the last few weeks in Europe – much of it with my parents, both born in the 1930s’ – I was reminded of how much things have changed even in the last 50 years. People of my parents’ generation seem to both marvel at the way Xers and millennials adopted communications technologies but in the same breath bemoan the fact that digital connectivity is eroding our basic social bonds. Our ability to be comfortably content in each other’s company without having to push a button or interface with a device. Imagine how 13th century Europeans might have felt had they witnessed modern day people spend half their day fiddling with objects rather than talking with other human beings.

While it might be tempting to think of the answer to Maria and Dave’s question in terms of quality vs. quantity of social connections, it really comes down to a far less philosophical point: simple reach.  The world before Social Media may have seemed more social, but it was also clustered. Social had very little reach. It didn’t scale. It was limited to rigid, often closed social groups with their own power structures, rules, and limitations. The web may only be a proxy medium compared to say, the village well, the tribal long house or the local market – each a face-to-face medium – but it has served to significantly extend Social‘s reach (globalizing and liberating it, even) without stripping away its basic nature. Social Media’s ability to connect people globally, in real time and on their own terms redefines the very nature of the term “social.” It shifts it from a localized, tightly controlled phenomenon to a global and highly adaptive one. And in that, it is a cultural revolution unto itself.

Think about it this way: 200 years ago, what was the size of a typical person’s social circle? (The very term “social circle” is pretty telling.) 30? 50? Maybe 100 people? Your family, your neighbors, the butcher, baker, blacksmith and other tradesmen? The local clergymen? Your shipmates? Your troop? Your fellow students? More to the point, what was the size of that social circle’s geographic footprint?

See where I am going with this?

Compare it to today: Users of Social networking platforms like Twitter, Facebook, Foursquare, Linkedin and YouTube (to mention only a few) haven’t just broadened their social circles and turned them into complex webs of connections and interactions, but extended their reach geographically to a quasi global network as well. Social hasn’t just scaled. It has been redefined.

So I suppose at the very center of the “would a world without social media be more social?” question lies another question: How do you define social? Or rather, how do you separate old-world social – that focuses mostly on depth of connections – from the new, digitalized social – that focuses on breadth as well?

The thing about it is… digitalized social (social networks and socialized media) doesn’t and cannot replace the age-old social interactions generations of humans grew up with. Nothing can replace the nuances and impact of face-to-face communications, of one-on-one interactions, of handshakes, of hugs, of sharing drinks and stories and the warmth of a fire. Not video conferencing, not foursquare, not even augmented reality. Just as a newborn baby needs to map out her mother’s face with her own eyes, we need to press flesh and eat together and experience a bit of road together in order to form the bonds that our communities, businesses, organizations and social ties need to keep from coming apart. You still need to visit grandma and hug her. You still need to pet your dog. You still need to visit your parents and your friends every time you get a chance.

This is why Social Media fans rush to conferences where they can meet in person – the ultimate irony of the Social Space being that most of the money being made under its auspices still happens offline: #sxsw. #Blogworld. #LeWeb. #140Conf. #Social Fresh. #Blogwell. (Should I go on?) The same social dynamics are why remote meetings don’t work as well as on-location meetings. It’s why working groups who can’t be in the same room are typically far less efficient than working groups who can share the same space. Contracts are signed in person. Important meetings are worth traveling to. People still like to look a client or partner in the eye before pressing on with a relationship. Here in Cannes this week are the Cannes Lions, one of thousands of events that would never happen if we didn’t have a need to come together at regular intervals to celebrate what makes us tick.

More than 80% of human communications are non-verbal, still. The web hasn’t changed that. Ask an emoticon.

What the industrial age tore apart in our once simple and finite social habits is now being patched up by the socialized web and social technologies. Our need to be social isn’t affected by twitter, blogs or facebook. It isn’t affected by mobile technologies or the web either. How social we are as individuals isn’t dependent on our access to technology or lack thereof, but our ability to choose between being locally social or globally social is. And that’s the crux of this whole discussion: technology is just a tool. It provides a medium. Enablement. Socialized media are channels, nothing more.

Social technology is simply a proxy medium: The town square, the tribal long house, the hunting party’s fire multiplied by millions and touching every part of the planet equipped with an internet node. “Social” is a behavior first and foremost. The technology, the apps, merely pipes and real-estate.

Would a world without social media be more social? Yes. No. In a way. Social would simply take on a different form. A different meaning. Without the web itself, without cell phones, without Twitter and Foursquare and email, without TVs and earphones and shopping malls, perhaps we would turn away from the outer edges of our world and once again turn inward to our own local peer groups, to our neighbors, to our local social networks. Maybe. But those of us with social wanderlust would still find ways to reach out over the wall and the next forest and the next hill, by telegraph or carrier pigeon or corked bottle, knowing that half a world away, someone was dying to reach out to us as well.

Before Social Media, we built walls... and sand castles.

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Do you know who the mayor of your business is?

Pop quiz: You own or manage a restaurant. A hotel. A coffee shop. A specialty goods store. A hot dog stand. A bank. A movie theater. A shoe store. A gym. A bodega. A hair salon. A sushi bar. A pub. A public park. A swimming pool. A museum. An art gallery. A city. Do you know who the mayor of your business is?

If you don’t, find out today. Right now. Here’s why: It could help your business grow pretty quickly if you play your cards right. More on that in a minute. First, here’s how to find out who has claimed the title of mayor on Foursquare: (Huh? fourwhat? Hang on. We’ll get to that too.)

The How:

Step 1: Go to www.foursquare.com

Step 2: In the search box (top right) enter your business name.

Step 3: When your business information pops up, look to the right of the screen. You will see an icon labeled “mayor”. That’s who the mayor is.

The Now What:

Find out who they are, and you give them the royal treatment next time they come into your store. Let them know you’re paying attention to a) Foursquare, b) whom is taking the time to check in every time they come into your place of business, and c) who is sharing that information (that recommendation) with their friends on Foursquare, Twitter and Facebook.

Think about giving them a discount or a gift while you’re at it. Set up a “mayor parking” spot outside. Treat them like a VIP inside the store. Address them as “Mister Mayor” or “Your Grace,” when they walk in. It’s up to you. Have fun with it. Give them more reasons to like you. It never hurts to reward kindness with kindness, and remember that it is supposed to be fun and rewarding.

The Why:

If you aren’t familiar with Foursquare yet, here it is in a paragraph: It’s a game played on mobile devices. People “check in” to businesses and other locations, and try to accumulate points. In some instances, they win much coveted “badges” (see some examples below).

In other instances, if they are the most frequent visitor of a location (like your store), they are crowned “mayor” of that location. The game is free, works on a variety of mobile platforms, and players have the option to share their check-ins with their network of family and friends on Foursquare, Twitter and Facebook. It’s a silly game, sure, but it is powerful as well. Here’s why:

1. Frequency – Because checking-in is a game, it is fun. That, in and of itself, is reward enough. Mayorships and badges are also rewards for activity on Foursquare. What it means is this: Foursquare gives people an incentive to visit your store more often, just so they can check in. Especially if you are running a promotion aimed at your store’s mayor. As a business, you can thus easily use Foursquare to increase the frequency of visits to your store(s). That equates to more foot traffic, more mindshare, and potentially more sales. (While they’re in your store, they’ll probably buy something.)

2. Reach – In case you missed it earlier, when someone “checks in” to your location, they broadcast that check-in to their various digital networks. Right now, that is mostly Foursquare itself, Twitter and Facebook. This will probably grow over time. But consider that the average american has what… over 200+ “friends” on Facebook? Think about the power of having a single customer broadcast that they are in your restaurant, in your hair salon, in your pub to 200+ of their friends every time they come in. Now multiply that by ten customers. Now multiply that by 100 customers.

Though not technically “active” word of mouth, Foursquare check-ins are still de-facto endorsement of your business. In other words, it isn’t just a question of exposure. A check-in is an affirmation of endorsement. It might as well say “I am here, and I am proud to tell you all that I am doing business here. Come do the same.” That’s the context of a check-in.

Every time one of your customers checks-in and broadcasts that they are doing business with you, they potentially trigger a visit in an average of 200 other potential customers. (Either existing customers or potential customers.)

3. Yield – Of the three, this one is probably the toughest to achieve, but as a measure of loyalty, yield (average purchase amount) can be impacted by foursquare activity. As frequency of visits increases and loyalty follows suit, it is likely that a portion of your customers will escalate their purchase amounts as well. Loyalty can lead to a higher percentage of wallet share, not just through buy rates (frequency) but also higher price-point purchases.

A word on escalation: Take the example of a bike shop. A casual customer may come in once a month and buy some energy bars, a bike jersey and some socks. As this customer is developed into a regular, they start purchasing all of their energy bars from you instead of buying them from several different places. They may also start jonesing for that new pair of cycling shoes and that new helmet they will soon rationalize they need to replace their “old” ones with. If you treat them well and understand their needs, this escalation may lead to a higher dollar purchase like a race wheel upgrade, a carbon-fiber set of handlebars upgrade, a full bike tune-up, or even a brand new bike to start off the new season in style.

Result: In six months to a year, you could potentially turn a casual customer who only bought low-hanging-fruit items in your store to a loyal customer with a habit of dropping large amounts of cash on premium upgrades with you, instead of blowing them on something else.

Note: You cannot escalate yield if you do not have a relationship with your customer. There is no shortcut here. You have to get to know them. You have to become part of their world. This is not something you can do from a corporate office, or from the back of the store. Someone has to interact with them on a human level – both online and offline.

More thoughts on how to leverage Foursquare:

How your business can use Foursquare is up to you. Use your imagination. Try different things. Be clever. Have fun with it. Perhaps you can work with Foursquare to create badges for your business, the way that Bravo, Starbucks, SxSW, Marc Jacobs and several cities (San Francisco, New York, Brooklyn and Chicago) already have. Here is Starbucks’ very own Barista badge. To obtain it, players only need check in at 5 different Starbucks locations:

Imagine the same thing for your business, or banding with retailers in your area to create a badge players could unlock by visiting 5 of your combined locations. You could work with an organization or with a city even, to help promote your business through Foursquare. You don’t have to do it all yourself.

Perhaps you can also create promotions around Foursquare activity, like flashmobs (using your business and a particular sales event to help customers achieve both all-too elusive swarm badges (50 people checking in together and 250 people checking in together.)

Another fun idea: Procure some Foursquare Merit Badges and ceremoniously award them to customers who acquired virtual badges online (see below).

Whatever you choose to do, start at the beginning: Find out who the mayor of your business is, acknowledge that status, and reward it with warmth and gratitude, if not with product.  Next: Create an account and get rolling. It’s your business. Take charge and participate. Welcome to a whole new world of marketing fun. If you’re lucky, you will beat your competitors to it. (Never underestimate first-mover advantage, especially in the age of twitter & facebook real-time word-of-mouth.)

Footnote: I spoke to two retailers yesterday who had never heard of foursquare. One didn’t know that dozens of customers were already checking into their store regularly, and I added the other’s venue because there wasn’t one yet. Guess what: One knows who the mayor of their business is today, and he has a plan now. The other will know as soon as someone becomes the mayor, and is already working on some promotions. We will revisit these two businesses in a few months to see how they fare.

Also check out Gowalla.com while you’re at it. Very much the same thing, and it too is growing.

Additional reading:

Via Mark Van Baale (@markvanbaale on twitter) – “Foursquare sees another big Domino fall“

And this great piece via Mashable on Foursquare’s business analytics dashboard.

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