It’s the promised Mecca of Mobile: Local Advertising. Companies of various sizes are all scrambling to create the Killer App, that will allow users to search for surrounding businesses and events from a mobile phone.

FourSquare paved the way, by creating a disruptive user-driven ecosystem that combines:

• Local discovery
• Social filters
• User engagement

Check-ins and Badges, with their basic simplicity and social reward dynamic, have been a social revolution and a turning point in the local advertising industry. Still, FourSquare is a young model with many unanswered questions:

-How long does a game last, and how does it generate value for both end-users and advertisers?

• What happens when users will start losing interest in the game?
• How does it scale without losing its simplicity?
• How does the game affect users’behaviors-checking in for the pure badge reward as opposed to being interested in a place and what it offers?
• What happens to the game and its social rewards, when a larger number of venues start using FourSquare as an advertising platform?
• How does the game avoid being tricked (check-in and go away just for the goal of earning points)?

-CRM and loyalty programs

• How do promotions through FourSquare (e.g. a free beer for a major) evolve into a loyalty programs for a business owner?
• Will FourSquare share the users’ data?
• Will users have to set their privacy controls for each venue, when each of them will be an advertiser? Or  will being e.g. a mayor equate to getting bombarded by promotional offers?

-Aggregation

Are we going to have many FourSquares, each one for its target niche? A FourSquare for travelers, one for entertainment, one for shopping, etc? Will users have to manage tens of mobile IDs and networks?

-Brands

• Will big brands want to share their customer base and loyalty programs with their competitors?
• Or will you have to have your branded Macy’s FourSquare along with your regular one?

-Targeting

As pointed out very cleverly by Chris Messina, targeting with local search is what will decide who wins and who loses this game. Targeting for local advertising needs to evolve to an almost “artificial intelligence” algorithm, that mixes social ranking (good word from my friends), personal preferences, context (what time of the day, what day, where) and paid campaigns to offer the most relevant solution and create value for the end-user.

• Does FourSquare have the know-how and funds to build such a sophisticated machine?
• Does it have the sales force to maintain client relationships? How does it scale?

FourSquare for Business

Alternatives to FourSquare : Good bye Mobile Social Networks, Welcome Mobile Social Discovery

A new group of FourSquare competitors is emerging and what they have in common is that they were all former mobile social networks, that are now quickly reinventing themselves as mobile social discovery platform. Loopt and Brightkite fall into this category.

-Loopt Pulse: mixing social recommendations, editorial and mobile coupons

Recently mobile social network Loopt launched Pulse, which produces a personalized list of recommendations based on where you are, the time of day and your friends’ reviews.

Main features that differentiate it versus FourSquare:

• Editorial Content: Pulse pulls editorial descriptions and reviews from circa 20 partner sites, like Zagat, Citysearch, Eventful, DailyCandy, Thrillist and The Village Voice. Pulse also factors in more subjective factors, like which places are particularly popular with Loopt users at a given moment. Loopt shares revenues with all its content partners: when a user for example reads a Citysearch review and clicks on the restaurant’s Web site, both Citysearch and Loopt will earn money.
• Carriers and Apple’s Love:  Loopt gets revenue from cellphone carriers, which include its service in their data plans or use its technology to run their own location-based applications, and it also frequently featured by Apple.
• Advertising Platform And Mobile Coupons: with its new version, now Loopt includes LocationPoint ads from Nokia’s mobile mapping division NAVTEQ; the ads can be coupons tied to restaurants and stores in the users’ vicinity, and include click-to-call and click-to-route functionality. Sponsors like Target and Chili’s have already signed on.
• Reach: The Pulse upgrade is accessible not only on the updated iPhone but also as a BlackBerry app, and on all Loopt-enabled handsets
• Coming Soon: Augmented Reality and Social Game. Loopt recently acquired GraffitiGEO, a location-based app developer that had been working on an augmented reality rating and reviewing app including gaming features, similar to the Badges/Checkin from FourSquare.

Loopt

-BrightKite 2.0: Local Advertising through real-time behavorial targeting

Originally a TechStars startup, Brightkite was bought in April by Limbo, and has recently launched a new website and app, dubbed BrightKite 2.0. Let’s just say that the revamped app offers not much besides the now usual FourSquarish features, checking in, friending, steam of events.

But where it stands out is the self-serve advertising platform, which allows for location and real-time behavorial targeting. How that will play out in reality and move past the push model of online advertising is open for discussion. Chris Messina’s post raises some reasonable skepticism over its effectiveness.

Alternatives to FourSquare : Adding geo-location to existing services.

This category is still working behind the scenes, but signs of where it’s headed are becoming clearer by the day.

-Facebook

Take Facebook Lite, Facebook 65 million mobile users, its Lifecasting service on the Nokia Ovi Store, the millions of local businesses with Fan Pages, Facebook Connect for Mobile, mash them up and you see what could come next. Another social network morphed in a platform for local social discovery,  but this time rich of 320 million users, an existing advertising sales force, relationships with 160 carriers worldwide.

-Google Android, Latitude, Maps and Local Search

Imagine Android in 6 months, spread out on different hit phones, embed Maps and Navigation in them, add a social filter through Latitude, a layer of advertising intelligence and millions of businesses through local search. The result could be as big as the current Search business, if not bigger, when you factor in the zillions of local businesses in developing countries.

-Twitter

Lots of potential, like everything Twitter: with its geo-location API, more business could start offering targeted promos to local users, as some have started doing based on profile location and keywords. Only time will tell, but the smell of success is in the air.

If there’s one company that never fails to wow its audience with its mobile marketing initiatives, that company is Nike.

The Nike Id Iphone App

Take their new IPhone app, Nike Id. It could have been just another app to customize a pair of sneakers and locate the nearest store. But there is more than that. The app doesn’t just put colors in the right places on trainers designs, it also allows users to create new ones, by using iPhone images or pictures from the phone.

All you have to do is extract the correct color palette from the picture and express it in the form of your very own unique trainers. Still unsatisfied with the color scheme? Shake your iPhone to shuffle shades and get new results.

The app even lets users make iPhone wallpapers, share them with their friends online and obviously order the final creations.

Other remarkable mobile Nike initiatives from the last couple of years.

Nike T90 Augmented Reality Hunt

To promote the launch of Nike’s T90 boot during the Euro 2008, a series of black and white markers were posted in Nike stores, subway stations and magazines throughout Hong Kong.
Once users found a marker, they could text the keyword in it, to download a Nike ‘Augmented Reality‘ application.

Marker for Nike Augmented Reality Hunt

After loading the app and pointing the camera at the code, it became a virtual 3d T90 boot and ball, rotating in sync with the user’s cell phone movement around it.  The hunt continued by texting a special code found withing the 3d graphic and a final sweepstakes for Nike merchandise made some players even happier. Enjoy the promo video!

Nike Zoom

For the launch of Nike Zoom performance shoes in China, Nike set up an urban race in which consumers could participate to win a new pair of the Zoom high performance shoes. The Bluetooth-enabled race started at an illuminated outdoor site up to 400m from the store featuring a line up of 21 new Zoom shoes and ended at the Nike stores.
The fastest runner was given a pair of new Zooms and got their name placed in the illuminated site.

Results according to Mindshare, the agency behind the campaign: across three cities in three weeks, 250 000 Bluetooth messages delivered, 15 000 participants and 63 pairs of Nike Zoom shoes awarded, 1.7 billion online impressions, 19 million print impressions and 17 million OOH target audience impressions.

Nike and Times Square

While our Asian pals run around, New York got a  23-story interactive billboard in Times Square displaying customisable footwear from the Nike ID range.  Users could just dial the number on the billboard and use the phones keypad to start customising the on-screen shoe in real time! After playing with the billboard, a text message with a link to download a wallpaper of the just created design got sent to the user with an option to buy the shoe.

Nike Times Square Billboard

Nike Street Canvas

Another idea to customize a shoe: take a picture of something you like with your phone, send it to a number as a MMS, and you get back the link to your shoe, customised using the colors from the photo. As with the Billboard campaign, users were offered the option to either download the wallpaper of their Nike or directions to go purchase them right away!

Earlier this week, Chetan Sharma blogged on GigaOM about the limits of the current mobile advertising ecosystem.Sharma is right: mobile advertising is stuck to banner ads with “Click here to download” call-to-actions. Tracking technologies are still  behind.

In this caveman scenario, mobile apps have been a game-changer. Context-aware, personalized apps are opening up a whole new world of possibilities for advertisers to engage with consumers in effective new ways.

Brands who had been turned down by the device and industry limitations, are rushing to develop their own apps. We’re still at the very early stages of the phenomenon, with most apps looking just about the same. But there are exceptions and one of them is generating a lot of buzz, the Puma Index.

The Puma Index works this way: when the Dow goes up, the models put on their Puma clothes. When it goes down, they take them off. And when it goes down enough, the models strip down all the way to their Puma underwear, the new line just launched by the company. The app, which was designed by ad agency Droga5 for Puma, is free. You can download it right here. The app will get you a 20 percent discount if you show it at a Puma store.

This app is nothing mind blowing. But for sure, it’s a nice example of how to think out-of-the box instead of becoming the zillionth clone of a store locator with coupons. Let’s hope to see more brands and agencies involved in mobile advertising soon. The possibilities are infinite: from hyper-local ads to augmented realities. The sky’s the limit.

In the meantime, enjoy the bad news!