One of the principal questions in the local marketplace heading into 2011 is how location-based services (check-ins, barcode scanning) and deals will continue to synergize to create an integrated user experience? Just as important, what role will Google play?
An early clue may have turned up with SCVNGR nabbing a third round of funding, this one for $15 million. Google Ventures is a chief investor in the Boston start-up, having poured in $4 million in earlier rounds.
SCVNGR launched its geosocial rewards platform in July and expects total users to top 1 million by month’s end. LBS brands, Foursquare the highest profile among them, sell serendipity by using game mechanics to drive local discovery through check-ins. The concept generated buzz aplenty in 2010, but not as much evidence of mainstream popularity. In November, PEW reported that only 4 percent of online U.S. adults actually use these location-based tools.
SCVNGR has tried to separate itself from the Foursquare/Gowalla/Loopt crowd on a couple of fronts. It pursued paying clients first, rather than starting with simply building the user base. And its focus on challenges over virtual check-ins allows clients to elicit certain interactive behaviors from their patrons, then reward their loyalty with tangible prizes. Users of the service’s mobile apps accumulate points for completing tasks, then can redeem those points for prizes when a certain threshold (determined by the merchant) is met.
This is potentially important in two ways — steering the LBS experience away from check-in fatigue (badges and mayorships only go so far) and empowering local businesses to engage their customer base by incenting desired actions. Some have called this a basis of the modern loyalty platform.
The fact that Google is backing SCVNGR is, if nothing else, eyebrow-raising. The big G has put a heavy emphasis on local AND location. It unveiled Places, built Place Search around it, then added Tags so small businesses could use their Places pages for tailored promotions. Now there’s Product Search, which we assume Google will attempt to scale across Places to show display real-time inventory, price comparisons and more. All of these have big connections to mobile enterprise.
It also deployed its search chief, Marissa Mayer, to head up local. In a recent interview with Mediabistro, Mayer noted that deals and offers are areas that Google can increasingly leverage, positioning it to compete with Groupon (and other deals sites) after a failed acquisition bid. SCVNGR is an early mover in melding location and deals together for the mobile consumer.
Google has long been on a scavenger hunt for viable social platforms. Could SCVNGR be one of them (literally)?