Yesterday Google launched Hotpot, a local recommendations engine that leverages Web history, your ratings/reviews and those of your network to offer personalized local business suggestions as part of search results. I wrote about it briefly on Screenwerk.
The success of Hotpot in the aggregate and for any individual in particular is based on participation; you actually have to connect with friends and rate places to see the benefits. After about 10 minutes of doing that online I started to feel fatigue (I've also got jetlag). But mobile is where this really has the potential to take off in my opinion. Ratings generated via mobile devices will also show up online as well.
Right now "rate and review" is a bit buried at the bottom of business profile pages in Google Places/Maps for mobile. But over time it will likely become more prominent, prompting people to quickly rate local business and attractions on the spot. Over time I could well imagine the majority of reviews from the system coming from mobile devices.
I was on the phone with Microsoft and they presented a statistic in the context of our discussion about Bing and mobile: 53% of mobile searches on Bing have a local intent. I stopped and verified the number and its source.
Google has said the number is about 33%, but this number isn't based on internal Google data. It repeats a BIA/Kelsey survey figure or estimate. I have suggested to Google that it put out a number based on what it observes in its own query logs. Google has said that 20% of PC based search queries have to do with location.
The Microsoft data, I confirmed, are drawn from internal query log analysis. This is a big deal and a real number based on search user behavior.
Yesterday Google released Google Instant for mobile:
With Google Instant on mobile, we’re pushing the limits of mobile browsers and wireless networks. You will probably notice a big improvement in speed when you search thanks to a new AJAX and HTML5 implementation for mobile that dynamically updates the page with new results and eliminates the need to load a new page for each query.
Google Instant for mobile works best on 3G and WiFi networks, but since the quality of any wireless connection can fluctuate, we’ve made it easy to enable or disable Google Instant without ever leaving the page. Just tap the “Turn on” or “Turn off” link.
Its biggest impact will probably be on Android devices.
The Google iPhone app had search suggestions already, which is very much like Google Instant. In addition I would bet -- though I don't know this for sure -- that the majority of searches on the iPhone are happening either through the app or through the Safari toolbar, where Instant doesn't yet exist. Fewer people on the iPhone, I would imagine, navigate to Google.com on the browser and then search -- though that pattern is probably more true of people using Opera Mini on the iPhone.
Instant for mobile is part of Google's larger efforts to make search more user friendly (including voice, Maps and Goggles). The company is battling apps to make search a central part of the mobile user experience (as it is on the PC).
Pew has released findings from a recent telephone survey (n=3,001) that asserts 4% of PC Internet users and 7% of mobile Internet users are on location-based services such as Foursquare or Gowalla. The first number is in general agreement with Forrester's survey numbers. There are other surveys that have found somewhat higher LBS usage numbers.
Pew found LBS users tend to be male and under 30:
One of the "issues" here is how questions are formulated and explained over the phone. What definition of a "location-based service" is being used for example? (Pew typically posts survey questions but in this instance they're missing.) In addition, if you asked people about the importance of location on mobile devices the numbers would be far larger. And once again, frustratingly, Pew doesn't segment or break out smartphones vs. non-smartphones.
Pew does however segment LBS usage by users of Twitter and social networks. Twitter users tend to use LBS much more than other populations. This makes sense in many respects.
If the extrapolate these Pew figures (from the 4% figure above) and turn them into real numbers, we can say that there are about 8 million users of these services in the US.
People want to focus on scale and volume in these discussions. Yet talking about how many users there are today misses the larger point in a way. The larger point is that these services have brought together something interesting and relatively new, combining local-social-mobile, and created a model for a next-generation cityguide, among other things.
I had been thinking about LBS chiefly in terms of coupons and direct marketing opportunities. However these services can equally be brand engagement tools or mediums. In fact, in some ways they're more effective in that context. They can equally work as new customer acquisition platforms and as loyalty vehicles.
There's something very interesting going on with LBS and it's important to study that carefully. The market is changing and LBS is a new model for future services. Any of the individual companies may not survive but the larger phenomenon of social + local + mobile definitely will.
Directory publisher DexOne has upgraded its smartphone apps across mutiple platforms, with an emphasis on the iPhone, Android and RIM. The company has also broadened out the app's content considerably from the previous version, integrating events, movies, gas prices and other non-standard YP content. There are also a range of new or enhanced social features.
Users may now directly write and submit reviews through the app, which will be incorporated into the DexKnows online directory as well. Consumers can also share listings information via Facebook, Twitter and email. The Facebook and Twitter sharing/notification is tantamount to a "check-in" though there's no formal check-in capability in the apps at this point.
In addition to the new and improved native clients, there's an upgraded mobile browser experience and an improved "WAP" browser experience for lower-end phones. Users can also conduct transactions (if available), such as buying movie tickets or making restaurant reservations through OpenTable.
Deals are coming in the future. Advertisers are incorporated into listings and search results throughout but not specifically "called out" as sponsored links or ads. However they're only presented (at the top) if they're relevant from a location and category standpoint.
The homescreen of the iPhone app is animated, which can't be turned off right now (though I would recommend that capability). It rotates through a series of widgets, giving users a tour of the app and showing relevant local listings or other content.
I can certainly offer some critical remarks but, overall, there's much more visual appeal, design flair and "personality" in this app vs. the previous one. It should prove to be more engaging and drive new user behaviors among Dex's customer base.
Mobile marketing platform provider WHERE.com has teamed up with small business email vendor Constant Contact to combine the benefits of mobile and email marketing. Email marketing, though "old school" compared to mobile, is highly effective and so regarded by many small businesses. Indeed, they often rate it as the most effective or one of the top three most effective marketing tools they use.
The WHERE-Constant Contact deal contemplates that WHERE daily deals and offers can be marketed to existing customers through email via Constant Contact. And the reverse is true: Constant Contact users can now reach WHERE's consumer audience and mobile ad network (a combined 50 million people) with deals and offers.
This is an oversimplification, but WHERE sees itself as the new customer acquisition platform while Constant Contact is the CRM tool:
This integration will allow small business owners to create daily deals through WHERE and market them to their current customers through Constant Contact’s email marketing tool, as well as to WHERE’s 50 million mobile consumers. WHERE merchants can also add Constant Contact’s “join my mailing list” (JMML) button to their listings, an easy way to grow their email subscriber list. The collaboration will enable Constant Contact’s customers to utilize the WHERE platform to deliver deals to their existing customers, while reaching new customers through WHERE’s location-based mobile advertising. In addition, WHERE’s recent acquisition of LocalGinger.com , a pioneer in the local group buying category, gives merchants interested in group buying deals a massive platform to help drive foot traffic.
This collaboration aspires to be a kind of "360 degree" solution for small business to help drive people from the Web into stores. Constant Contact reported that it had 415,000 paying customers as of the end of Q3. Yesterday Constant Contact released an iPhone application.
Constant Contact's customer base offers a massive potential audience for WHERE, which offers mobile landing pages and a wide array of promotional opportunities for SMBs.
The article is in part a discussion of the supposed battle between Google Checkout and PayPal. However, Checkout is very far behind PayPal -- so much so that Google may be compelled to do an acquisition in the mobile payments space if it's really serious about competing. However there is a near-term way that Checkout could compete. I'll get to that later.
The other aspect of the article is about how PayPal now features a local directory that will potentially drive consumers/customers into local eateries and stores that accept PayPay (or Bling). Here's what it looks like:
It's pretty basic -- and buried. Almost no one is going to be influenced to go into a local restaurant or store by PayPal Local in its present form. It will need to offer a much richer user experience than what currently exists and it's unlikely to be competitive with the major consumer apps such as Yelp or yellow pages or Google any time soon. Furthermore the availability of PayPal as a payment option is not likely to exercise much influence over consumer decision-making unless or until some significant changes happen.
Sure, PayPal can start offering deals and discounts and that will help gain some consumer attention but probably only at the margins.
To be sure, mobile payments are starting to gain momentum. And PayPal is certainly in position to own part of that market, given its huge installed base. But PayPal Local needs a massive consumer experience upgrade before merchants would see any benefit.
On the merchant side, PayPal is pretty competitive with credit card issuers in terms of payment terms. If PayPal is able to acquire more merchants it will certainly help the entire proposition of PayPal Local. But among larger and more established businesses (e.g., restaurants) credit cards will be accepted and that consumer behavior will be hard to change. Sprint is offering a kind of "pass through" payment (PIN triggers a credit card), which represents consumer convenience (speed) and perhaps greater security than giving your plastic to yet another person to swipe.
That is the model that will eventually take hold for the majority of mobile payments in my view. The carrier billing model, as presently constituted, will work for some types of small transactions but it's unlikely to win favor to replace routine credit card purchases.
How can PayPal accelerate where it wants to go; and how can Google Checkout make itself more relevant and competitive? Either or both providers can do so by reducing their fees to merchants to speed adoption. Once there's very broad penetration among local merchants, stores and restaurants then all this starts to become relevant to consumers. Right now it's simply not.
In addition, each could offer loyalty incentives to use their respective systems. But that implies merchant penetration as well; you can't get the incentive/reward if you can't use the system. Once again, these payments vendors need to:
As is now widely known Facebook is having a "mobile event" on November 3. There have been many rumors of a "Facebook phone." That would be pretty interesting and exciting but it's fairly unlikely. So what will be announced?
My guess is that Facebook will first rattle off some impressive mobile statistics. Here's where Facebook's mobile stats stand today:
I'll guess that we'll hear that there are now more than 200 million active mobile users on Facebook among other juicy tidbits.
I've long speculated that Facebook would eventually become a mobile ad network. The amazing thing, if it were to do so, is that it would have equal or greater reach than any mobile carrier and probably any other mobile ad network today. But Facebook isn't immediately concerned with making money in mobile; there's no internal pressure to monetize mobile. Some have estimated that Facebook is on track to do $2 billion in online ad revenue.
Another reasonable guess is that we'll see the debut of "Facebook Deals," which may be partly tied to Facebook Places. It may also have an entirely independent existence on the PC. Right now Facebook Places doesn't offer any "reason" for users to check in -- unlike other LBS services that offer badges or coupons. I've seen estimates recently that Facebook Places has "7X" the check-ins of Foursquare, which now boasts about 4 million users.
A deals product could offer a check-in incentive and a nice advertising vehicle for brands and SMBs alike. Regardless of what gets announced next Wednesday, Facebook is a kind of "sleeping giant" in mobile and LBS. Anything it does in these realms has the potential to shake up (or accelerate) the industry.
Online commerce vendor ATG sponsored a survey (n=1,002) about consumer shopping behaviors online and on mobile devices. The top-level findings are written up here. Basically search engines are most widely used resource, followed by email and then "word of mouth." In this post, however, I'll focus on the survey's mobile data.
There are no startling findings or revelations. The data do show how consumers are increasingly using their handsets to get product information in stores and on the go and how they're becoming more comfortable making purchases through their phones.
Previously InsightExpress reported that 82% of mobile phone owners in the US used mobile phones (in one way or another) in stores, which includes voice calls to friends and family. In the ATG data the numbers aren't quite as impressive though "about 41% of consumers aged 18-34 are using their mobile device to complete purchases of products and services with varying frequencies."
Unfortunately there's no handset segmentation in the report but we can assume that most of the action is happening on smartphones. According to the survey:
For which of the following activities do you use your mobile device? (Select all that apply)
How often do you complete a purchase transaction directly on your mobile device?
As I said no great or startling revelations but solid evidence of how mobile devices are gaining as shopping tools.
I will, in my capricious way, selectively highlight data from the report. Of interest, 44% of mobile marketers on Millennial's network used some sort of targeting while 56% wanted broad reach. Among the targeting methodologies used (geographic, demographic, behavioral audience and audience takeover) 42% used geotargeting. That means roughly 18% of advertisers on Millennial's network are doing geotargeting.
Equally interesting are data published by Millennial but from InsightExpress' Q2 2010 Digital Consumer Portrait of mobile moms:
General smartphone penetration in the US is 25% per Nielsen. Moms make the household buying decisions so they're one of the most critical audiences for marketers to reach. The first chart below has more of the IE mom-related data:
Moms and their mobile usage:
Targeting on Millennial's network:
Campaign destinations/landing pages:
Compared to a year ago many more advertisers are driving application downloads.
Milo.com last night released its Android app, with an iPhone app to follow. The app is simple. As the picture at right indicates it's a search box and a location box; however it uses current location as the default.
It doesn't have all products and it doesn't have all stores; it's mostly focused on the national retailers and "big boxes." Roughly 50K stores are included, "which cover categories ranging from toys and games to apparel and electronics, and include national retailers such as Best Buy, Nordstrom, Target, and Toys “R” Us, among others."
For the inventory it can serve it works simply and nicely. Milo aims eventually to be comprehensive: to be the Google of local products, as it were. Others in this segment include:
Mobile is a context in which local inventory is particularly interesting and relevant. At the beginning of the purchase process consumers are less interested in where they can buy something (unless they're physically comparing products) and more interested in what to buy, which product. But as they progress toward a decision local inventory becomes increasingly important, ultimately becoming the most important piece of information for a consumer.
That's why "on the go" consumers will value an app such as this -- because generally speaking they're more "ready to buy" than someone at home on a PC doing product research. As an aside the conventional wisdom that consumers use mobile devices when they're not using PCs is not entirely accurate. There is some substitution ("cannibalization") going on, especially at home with the iPad. But consumers will increasingly use mobile devices as their first choice device over time. So you will see people using mobile apps at home instead of the PC, as well as moving back and forth between the PC and mobile devices.
One of the other things that Milo and the other companies trying to bring inventory data to the Web are doing is making more transparent the fact that products belong in the "local" bucket as well. Most pundits and analysts have treated products as exclusively within the domain of e-commerce -- e-commerce vs. bricks and mortar -- and that's simply not true.
The vast majority of online-influenced product buying happens offline. Only about 4% of products are purchased online but the Internet influences an increasing number of the 96% of transactions that happen in the real world. The Forrester number that you sometimes see quoted or cited, about online-influenced offline transactions, is pretty speculative. But it's directionally accurate -- a kind of placeholder for an actual, empirical number.
A piece on the radio this morning prompts me to write this. Currently it's legal in California (but not everywhere) for the FBI or other law enforcement to place a GPS tracking device on a vehicle and collect data from the movements of that device without first obtaining a warrant. As indicated, there's conflicting federal law about whether a warrant is or should be required in such circumstances.
This is yet another situation in which technology is way ahead of the law. But it's an issue that will probably come before the US Supreme Court in the not-too-distant future.
Location based technology and GPS-enabled devices make it possible to monitor the movements of large numbers individuals in ways that simply weren't feasible just a few years ago. Whereas physical surveillance previously was time consuming and labor intensive, now law encouragement can place devices on/under cars -- or perhaps soon track smartphones -- and watch many people and their movements simultaneously. By correlating those movements with other location data and information they can effectively determine the businesses and people that those under surveillance are visiting and associating with.
Is this a violation of the US Constitution's Fourth Amendment? Does it implicate the First Amendment and the right to privacy? Does it impact free association and the right to assemble? Clearly privacy advocates think so. However, a conservative US Supreme Court (assuming a case arises in the next few years) would likely affirm the legality of warrantless GPS surveillance. The US Supreme Court has been eroding the protections of the Fourth Amendment and its prohibitions against unlawful search and seizure for quite some time.
Allowing warrantless GPS "searches" or surveillance would represent another major step in that process. Should people have a "reasonable expectation" of privacy about their movements throughout the day? That's one of the questions raised by GPS surveillance.
We should pay attention and be concerned about such things. It's not that far from warantless GPS searches to requiring all cars to incorporate GPS chips that would allow law enforcement to routinely track people wherever they may be. In such an instance it wouldn't be hard to imagine speeding tickets automatically mailed to people after their cars transmit speeds back to law enforcement that are in excess of posted limits. And there are many other unpleasant scenarios to contemplate.
Location technology is a terrific thing and enabling all sorts of consumer conveniences and benefits, as well as new business models. But there's a dark side to all of it and we collectively need to be vigilant about privacy rights and make sure that complacency doesn't make possible some of the unhappy scenarios I describe above.
On Friday Mobile Marketer published an article, based on a talk given by Google's Mike Steib in New York. The article appeared to "announce" a new Google couponing effort called "Google Offers":
“The Holy Grail for local advertising is location-targeted coupons, and we’re building Google Offers to enable that, as well as click-to-call functionality for nearby businesses,” Mr. Steib said. “If you have the ability to reach out to consumers nearby and pull them in using mobile, it’s great for consumers and advertisers.”
I had an opportunity to talk to Google on Friday (though not Steib) about this, as well as its $1 billion in mobile ad revenues and other subjects of interest. Most of the conversation was off the record. However my conclusion is that "Google Offers" is much more of an idea than a product at this point. What the talk in New York really means is that Google sees locally oriented advertising on mobile devices, driving calls and foot traffic into stores, as very powerful and desirable both for consumers and merchants.
Part of that calculus is coupons, which more than any other advertising vehicle have a direct impact on consumer purchase behavior. Currently SMBs and others with Places pages on Google can offer coupons. However Google needs to do a better job of surfacing those coupons in order to gain consumer notice and further merchant adoption. Somewhat more visible are Google "Tags," which can also be coupons.
There's also the broader question of how deeply Google wants to get into coupons. Does the company, for example, want to integrate them into Google Shopping/Product Search or limit them to service businesses exposed via Local/Maps? Would Google create a "coupon destination," as others have done, including Yahoo and Ask?
I'm sure that Google has looked carefully at the "daily deals" segment as well. But so far the company has declined to either buy a company or mimic the offering. However it did recently invest in a company called Signpost, which is in the same general space.
It's clear that Google does want to get more deeply into local deals and coupons and is trying to figure out what's the best, most scalable way to do that. It also appears there's no new product (ad) announcement coming in the immediate future.
It appears, without much fanfare, that Yahoo Answers has now gone mobile. It's a "Web app" so there's no download. It should accordingly work on most if not all major smartphone platforms through the browser.
The failure (until now) to mobilize Answers has been a big "missed opportunity" for Yahoo. It has a huge Answers community and should have mobilized the product some time ago. However now that it has the question is: will it be widely used?
The company has done a nice job with the interface but I don't find it to be a particularly interesting or useful on the go. Beyond the nicely designed UI there is little recognition of the differences between PC users and mobile users, whose needs and interests are more immediate and in some cases quite different.
For example, there's no "local" angle other than browsing prior answers, which are difficult to navigate and not necessarily relevant.
Loyal Answers users will likely appreciate and use it on the go. Otherwise it's not particularly useful for mainstream consumers who aren't already hooked into the Yahoo Answers community and who may be seeking information in near real time. However Yahoo says that the community is so large that responses come in quickly with little latency. That may well be.
In my limited usage of Answers over the past few years, I've found quality to be uneven. Sometimes it's effective and sometimes answers are weak or too general. Ask.com is preparing to launch its mobile Q&A app and we'll see how that performs.
Otherwise there are more than a dozen "social search" or Q&A services, most of which fail to really be useful enough to replace the conventional search box or specialized apps.
Voice-initiated searches on the Google iPhone app account for about 7% of overall Google search query volume on the iPhone, according to search-based ad network Chitika. By contrast Google CEO Eric Schmidt said previously that 25% of Android-based Google searches in the US market are initiated by voice.
Below is a chart reflecting Chitika's data, based on millions of queries, that show the proportion of voice to non-voice initiated Google queries on the iPhone. While all Google voice search queries come from the Google app, the non-voice queries presumably are distributed across the app, Safari toolbar and Google.com mobile site.
The data in the chart above may not be exactly reflective of all voice search on the Google iPhone app. But let's assume that they are generally correct. That makes the two numbers cited (voice on iPhone vs. Android) very interesting -- and curious. There are other voice search apps on the iPhone (e.g., Bing, Dragon Search, Yahoo) and we don't know what those queries volumes are at the moment or how they compare to the Google breakdown of voice vs. text-based search.
The volume of voice-initiated search queries (25%) on Android is striking by comparison the 7% iPhone number. Google has more deeply integrated voice into the Android platform and may have trained people to use it more frequently accordingly. I can't explain the discrepancy otherwise.
GroceryIQ, which is owned by Coupons Inc., just launched a PC website -- I had assumed they already had one. Previously GroceryIQ was just a mobile app. But the new site allows cross-platform shopping list creation and adds considerable convenience and utility. There's also coupon-based email marketing as part of the package from Coupons.com partners/customers.
I write about it because this sort of cross-platform utility is what will win categories. Very few mobile-only sites will succeed over the long term. Or, if they do, they'll be scooped up (like GroceryIQ) and turned into something larger. By the same token sites that are PC based but don't have a mobile component will be similarly vulnerable over time to competitors.
The GroceryIQ app has been downloaded more than a million times according to the company.
Amazingly ChaCha announced last night that the company had raised another $20 million from new investors VantagePoint Venture Partners and Rho Ventures. I believe that brings total funds raised to date to over $70 million.
From the release:
ChaCha has answered nearly one billion questions in the past two years alone, having surpassed even Google in mobile text search, according to Nielsen. ChaCha is the industry leader in text-based advertising and has emerged as the single best place to reach the youth market in any medium. Between online Top 100 website, www.ChaCha.com, and mobile platforms, ChaCha reaches over 15 million unique users every month.
In the course of answering questions, ChaCha creates a clever dialog with its users, which ends with a marketer's call to action. Additionally, the company will soon deploy a new MMS service that will deliver movie trailers, other video, coupon images, and rich media ads to virtually all phones, not just smartphones.
I just wrote about the new ChaCha.com at Search Engine Land. Here's some of our past writing about ChaCha at I2Go:
SMS is the single best medium to reach teens and young adults in the US (perhaps globally) and ChaCha may be the best platform for teen and youth-targeted SMS.
Local ad platform xAD (formerly V-Enable) just announced that it had raised $4 million Emergence Capital. It also announced that it is profitable, growing 20% per month and "serving 200m local search ad requests per month." The company also says it delivers 10 million calls per month.
xAD said it will use the money for technology upgrades and development.
The company operates LocalAdXChange which was one of the first local ad networks for mobile. It takes inventory (ads) from many sources, including yellow pages publishers, and delivers those ads to a growing list of publishers across its network. It also optimizes ads across sites and by geography.
In the past 12-18 months a number of other local and local-mobile ad networks have launched:
AT&T Interactive should also be considered a network and provides lots of inventory to others, including Bing.
Where there was once almost nothing now the segment is very crowded with local and local-mobile networks. That's good for advertisers and publishers both.
Generally speaking CTRs, engagement and performance of mobile ads beat the PC. In my previous post I discussed data that suggest mobile uses are better and more immediate prospects for local ads (or locally targeted ads) than PC users.
Google has been telling people that "one-third" of mobile queries have a local intent. But this is based on a BIA survey number (probably extrapolated from roughly 1K respondents) and should be taken with caution accordingly. It's probably not a "bad" number but it's ultimately a directional estimate. Google should come forward with a mobile number that's based on its own query data internally.
By contrast to the survey number, Google reported some time ago that about 20% of PC queries had a local intent. That was based on actual query observation and it's only a very general estimate. I would argue the number is actually larger but it gets into gray areas quickly. Regardless, it stands to reason that the local number should be larger in mobile.
The challenge of course is defining what is a local query. On the radical fringe I argue that most product-related searches should ultimately be considered local because more than 95% of products are purchased in stores. However that's not a position held by anyone else to my knowledge.
Microsoft recently presented a mobile query analysis on a panel I moderated at the SMX conference in New York earlier this month. Below is a slide that Microsoft's Jamie Wells showed during that panel. It reflects, based on Microsoft internal analysis, that 27% of queries in mobile show intent to take action locally. It also shows that mobile searches tend to be more commercial than PC based searches.
Previously Microsoft reported that 70% of mobile (Bing) users start and complete a search process ("query chain") in one hour vs. one week on the PC for comparable behavior.
Taken together these data communicate that mobile users are doing more commercial searches, which are more likely to be acted on locally -- and generally within a very compressed time frame (an hour or so). All this means that ultimately mobile is going to be a better platform for locally oriented advertisers than the PC.
There was an interesting conference session recently that involved Foursquare and the company's next phase of development. According to AOL's Daily Finance, Foursquare CEO Dennis Crowley suggested that at some point Foursquare might try and get users to link their credit cards to their accounts. On a more mundane level he also said that there would soon be more tangible incentives for consumers to check-in:
Dennis Crowley, co-founder of social networking website Foursquare, says businesses may soon offer consumers the option to link their credit card to their favorite social networking website, or the opportunity to earn a slew of new incentives to actively promote an advertiser's products and services . . . Crowley . . . acknowledged that his website . . . is looking at models where local store owners could offer incentives for users who "tweet" or "check-in" each time they frequent a location. Some advertisers already offer consumers rewards for "tweeting" when they use a product or service certain companies want to market. Crowley expects this type of practice to increase.
Foursquare got its start with "game dynamics" but they are not enough to push the service mainstream. The possibility of becoming the mayor of some local business is not interesting to most people -- and not even possible for ordinary people. Getting a deal or reward is much more interesting however. Such incentives already exist on Foursquare and some of its rival sites.
Foursquare offers both the potential to be a new customer acquisition platform and a loyalty tool for businesses. For example I was in a bar in Dallas and was told that one could get "free chips and salsa for checking in." We did so and viola . . . lots of unwanted carbs came to the table. But I was already there.
The key is to both get new customers in the door (nearby deals does this to some degree) and reward customers for their patronage.
The mayor concept does this but there can be only one. Broadening the mayor into a "city council" of sorts -- to a group of people -- will be more effective to reward and encourage loyalty. In other words, anyone who checks in X times, gets Y reward.
Regardless the model needs to evolve if it's going to move beyond the minority of mobile users it current attracts.