Innovation Amid Commoditization: A Conversation With Gowalla

ScreenHunter_01 Sep. 09 11.36

Fresh off the launch of Facebook Places, I had the chance last week to talk to Gowalla Director of Business Development Andy Ellwood. We both spoke at July’s Geo-Loco conference and have since been reeling from the activity and excitement in the mobile/local/social space.

The biggest recent news in this space has of course been Facebook Places and we spoke about how that positions Gowalla. With this launch, Ellwood maintains the same philosophy Gowalla has espoused since the beginning: differentiate using branding, design and unique features.

This is particularly salient as mobile local check-in services come out of the woodwork and the check-in itself gets integrated with existing services like Yelp and WHERE. The check-in has long flirted with commoditization and Ellwood agrees that Facebook Places has made it official.

The Dreaded ‘K’ Word

But instead of viewing it as a “_____ killer” (insert Foursquare, Gowalla, Loopt, Yelp, etc.), Facebook could help smaller players that are fighting for mainstream penetration. In other words, as we’ve argued, its entrance to the space pushes the idea of “checking in” to half a billion users.

In that sense, Ellwood sees Places as more of a platform and content aggregator than the hyped “K” word. Gowalla has already taken advantage of both “read” and “write” APIs to pull in and push out check-ins to Facebook.

“There are a lot of check-in services and Facebook is a platform on which to publish that information,” said Ellwood. “A check-in is just saying ‘I want to engage and here’s where I am.’ Our job is to build more engagement and interaction around that.”

In that sense, it just launched Highlights, which joins the Comments, Photos and Trips features that have come to define the product. Gowalla has also long differentiated itself with top-notch design and a fun interface — certainly more so than the spartan Facebook Places.

Raising Standards

As for the perennial challenge of attracting advertisers, the company is working with brands to create custom campaigns that give them “credit” for users’ activity or local discovery on Gowalla.

Like Foursquare, this can involve sponsored rewards (pins in this case), places or events. The challenge, and the fun part says Ellwood, is the lack of pricing standardization that in turn requires each campaign to be customized based on advertisers’ goals.

“We don’t have a pricing sheet because we have so many different ways to combine the features of Gowalla to meet our partners objectives,” he said. Eventually there could be more scalable automation and standardization as Gowalla works with advertisers, gaining best practices to apply to others.

Meanwhile, it’s moving down market. Like others we’ve covered in this budding space, Gowalla has mostly worked with large advertisers. But a longer term opportunity could be the massive (but challenging) SMB segment where location is a clear relevance trigger.

“We’re interested in doing something in that market, probably sooner rather than later,” said Ellwood. “It’s just a matter of coming up with the right way to do it.”

This Post Has 2 Comments

  1. Mary McKnight

    Very salient point that Facebook Places brings the idea of checkin to 500 million people. And while I don’t think that Facebook’s Places will kill either Foursquare or Gowalla, each will have to find ways to leverage an ad network that will survive against Facebook’s existing ad network comprised of both big multi location brands and small local brands. Foursquare and Gowalla have been smart to target large franchised brands like Gap and American Eagle first because there is where they can prove the model results in traffic and sales. Those brands also have huge ad and PR budgets to promote their events. Just look at the deal American Eagle struck with Foursquare, a towering billboard in Times Square promoting Foursquare checkin! And while I love that big brands are embracing the idea of monetizing checkin, when it comes to local, you need to also monetize the small business market. I’m really interested in how FS and GW will position themselves to smaller businesses with lesser known, more local brands that do not have large ad budgets to support a campaign.

  2. Mike Boland

    Thanks for the comments Mary and sorry for the delayed reaction. Very good points. I think like we saw in online marketing of various formats, some of these mobile marketing tools will eventually move down market. That’s where the real opportunity will lie!

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