LOS ANGELES -- Location check-in services like Foursquare and Facebook Places remain a point of great interest to record labels, artist managers and retailers. But so far, their value has yet to be either proven or understood.
"We're just trying things, and the strategy behind them is not that impressive," Warner Bros. Records senior VP of new media Jeremy Welt said on a panel at the NARM in Los Angeles. "It's great for Foursquare, but not the artist or the retailer."
The problem is that there's not an obvious way to use Foursquare for fostering fan and artist communication. Artists use Twitter and Facebook to carry on conversations with fans. Foursquare is not the same kind of conversation. And while it's an interesting new form of interaction, the right use of it remains elusive.
Welt pointed to a few things that have worked, mostly assisting arists promote their tours. For instance, the label will add tips to certain venues that help raise awareness of a smaller acts upcoming tour. At the Warped Tour, for example, Warner Bros. would create a tip that listed the set times for lesser-known acts that would appear whenever anyone used Foursquare to check into the festival. It did the same for multiple venues -- create tips noting an upcoming show for each venue the act is scheduled to appear in.
But that's primarily promotion. It's not a conversation. And Concord Music Group VP of direct to consumer marketing Jason Feinberg noted during the same panel that social media platforms are at their most powerful when driving conversations, not commerce.
"We're squeezing a smaller and smaller number of fans to get more and more about of them," Feinberg said. "We're not addressing the far broader market of fans. That's the challenge. How do we take the 2% and use them to evangalize to the other 98%."
Retailers like Trans World Entertainment and Newbury Comics have similar concerns. Both have conducted several tests with Facebook and Foursquare trying to determine which of them and what strategies drive the most traffic.
Newbury Comic's director of marketing Amy Dorfman shared the results of a few recent tests the record store conducted with Foursquare and Facebook. One offered a blanket 10% discount off anything in the store to those who checked in via Foursquare. More than 1,400 customers redeemed the offer. The same offer made via Facebook Places resulted in zero redemptions.
Other experiments included giving away a free water bottle (344 redeemed that offer) and an offer to buy one free CD and get a second free (67 redemptions).
Trans World will next week conduct an experiment with Foursquare's new "flash deals" in conjunction with an as-yet-unnamed record label. The trial will give patrons of select FYE stores a free CD to those who use Foursquare to check in, but is limited to only the first few customers that do so (as is the form for the "flash deals" program). Other tests to date have included letting fans skip to the front of the line for in-store appearances when checking in.
But there's still no way of determining how many of the checkings these effort achieve are a result of new customers who otherwise wouldn't have visited the store, or just existing customers taking advantage of a deal. There's also no indication of whether participants are buying anything more as a result.
But the clear takeway is that these and other music industry types will continue experimenting with location services going forward, seeking that elusive answer. "It's a frontier we have to really look at," Warner Bros.'s Welt said. "We're still trying to find that right lane."