The following article from Mashable (via @meanwritehook – thank you for sharing!) interested me, since it not only shows a company using Foursquare to increase sales, but also shares the results – which is the bit we all want to know about.

Based on what the article says, I’d speculate that the immediate return on investment for this campaign was around 1:1 – that’s factoring in the ‘measly $1,000 spend’,  allowing for the $5 and $10 gift cards and also hypothesising they retain a PR agency that would have been involved in giving the campaign some suppport, some costs of which should really be attributed, not to mention any staff costs.  Or, if all of that really is included in the (very media friendly) $1,000, the return may even have been higher.  Really depends on what people checking in actually purchased.

Anyhow, whatever the case, I’m interested in anything that brands are doing with location-based social media and thinking about how charities might be able to benefit from them (Ash mentioned a few of beautiful world’s thoughts in a recent edition of beautiful bytes).

Here’s the presentation that the McDonald’s team shared at the Mobile Social Communications conference that’s mentioned.  It’s worth a look.  My favourite line is: ‘Don’t rest on “old” metrics’, because I agree that they’re only part of the picture when it comes to social media and we think very differently about the way social behaves and the value of actions than we do about traditional marketing.  You’ll note that I talked about ROI earlier but that one, direct measure (at least when calculated in the traditional way) is, I think, only part of the picture here.  The longer-term value is much harder to quantify, but getting your customers to literally put you on the map has got to be worth something more… ?

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.”

With so many brands trying their hands at location-based marketing campaigns, one has to wonder: Is Foursquare really effective as a platform for bringing in new business? McDonald’s seems to think so; the company’s head of social media Rick Wion recently spoke of the fast food giant’s big wins from a spring pilot program using Foursquare.

At the Mobile Social Communications conference yesterday, 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.

Econsultanty 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.

“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’,” Wion explained to conference attendees.

A company of McDonald’s size spends millions on advertising every year, and yet a simple $1,000 Foursquare campaign netted the company measurable success. 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.

McDonald’s is not alone in its Foursquare success. Earlier this year, Domino’s UK attributed social media, and its Foursquare pilot program in particular, as a significant factor in helping the company increase profits by 29%.

Image courtesy of Donna Greyson, Flickr. Via mashable.com

This entry was posted by Rachel on Tuesday, February 8th, 2011 at 6:10 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.