Facebook experiments with free Wi-Fi, for a price

I talk to APM’s Marketplace about Facebook and free WiFi

Facebook says its experimenting with a few local businesses to “offer a quick and easy way to access free Wi-Fi after checking in on Facebook.”

Rocky Agrawal, a consultant at reDesign mobile, suspects there’s more to this than good will.

“It’s a good way for Facebook to know where you’re at, they can deliver all sorts of new offers,” Agrawal says.

Story and audio.

Amazon offers up a new Kindle

A Kindle ad for Oil of Olay

A Kindle ad for Oil of Olay. The creative looks splotchy on the Kindle's e-ink display. Why this ad shows for a 30-something male is another matter.

I received my Kindle with Offers on Friday. It’s Amazon’s latest attempt to take on a somewhat new market. The name “Kindle with Offers” is a bit misleading, but it sounds better than “Kindle with Ads”.

Many of the ads aren’t offers at all. Here is the initial set I’ve seen:

  • An ad for Buick.
  • An ad for Oil of Olay.
  • An ad for the Amazon VISA card touting 3x rewards points on Amazon purchased. (This is their standard rate.)
  • An offer for a $10 credit if you register your VISA card as the default card for Kindle purchases and buy a Kindle book from a select list.
  • An offer for a $20 Amazon gift certificate for $10.

For people used to Web ads that flash, blink and otherwise overwhelm content, the Kindle ads are barely present. One appears on a small portion of the home screen, similar to a banner ad. The other format (shown in the picture) takes over the entire lock screen of the device if you haven’t been reading for a while.

The ads are disappointing. Amazon hasn’t done anything unique or interesting with them. Some of the ads on the Kindle were clearly repurposed.  Ads for Oil of Olay makes extensive use of gradients, which look terrible on the Kindle’s e-ink display. I thought my screen had become defective until I cleared the ad.

I really shouldn’t even see the Oil of Olay ad (not female) or Buick ad (not old enough). Amazon should know that neither ad provides value to me or the advertiser. The ads I see on Amazon.com are much more relevant than these.

In terms of offers, VISA is trying hard to be at the forefront of mobile payments. A similar promotion ran when Starbucks launched payments on the iPhone; if you registered your VISA card and bought Starbucks credit with it, you received a $5 bonus. VISA also recently invested in Square.

The $20 Amazon certificate is similar to the promotion that LivingSocial ran earlier. Except this time Amazon is footing the bill for the promotion.

Acting on an offer is a bit clumsy. After selecting an offer, you get an email with all of terms and instructions on how to redeem it.

Kindle with Offers is priced at $25 less than the comparable Kindle. The discount on the Amazon gift card is effectively another $10 loss. That brings the Kindle with Offers discount to $35. For comparison, Google makes less than $20 per year per user (on average) for its massive advertising engine.

For a media play, Kindle will need a lot more advertisers. Or it will need an aggressive revenue share on real offers like Groupon has.

Otherwise, it’s just a way to get Kindles in the hands of more price sensitive customers without repricing the base product. That itself is not a bad goal.

PayPal + Where set to take on Square

eBay announced today its purchase of Where, a mobile location service. Where has been in the mobile location space for a long time — well before today’s media darlings. (See my initial Where story from 2007.) While others have sucked up much of the media oxygen, Where has been the little engine that could, hitting 4 million unique users per month.

It has a large installed base of users across not only smartphone platforms like iPhone and Android, but also featurephones. Where has gone through a number of incarnations, including a local portal, local platform provider, mobile ad network and buddy finder. Its current consumer product offers a wide array of location-based services. Where has also been experimenting with Groupon-like deals.

The combined resources of Where and PayPal would give eBay a terrific way to attack the multibillion-dollar untapped local opportunity that Square has been gunning for.

As I’ve written before, payments processing isn’t the end game for Square — it’s an entry point into the much more lucrative demand-generation space.

Payments processors generally take between 1% and 3% of the sale. Demand generators, like Groupon, are currently taking 50%. (I expect that this will drop dramatically, but there’s still a lot of room in between.)

At its current pricing, Square is likely to be losing money on each transaction because it no longer charges a fixed rate per swipe.

Square’s merchant offerings are excellent. It offers a dead simple way for small and micromerchants to take credit cards. Its recently announced presence in Apple retail stores makes signing up for Square even simpler than it already was.

But we haven’t seen much activity on the consumer side. Consumers get an elegantly formatted receipt, but there’s no other mechanism for interacting with them. (Square is undoubtedly amassing a mailing list to do this in the future.)

A combined Where and PayPal would give eBay the ability to offer both payments processing and demand generation. With an existing base of more than 4 million users, Where is a good way to prime the pump. Local merchants who take PayPal could be highlighted in search results. They could have ads placed automatically across Where’s ad network.

The key thing to remember about local merchants is that they are incredibly pressed for time. A simple, integrated offering would have tremendous appeal.

Have doubts about eBay’s ability to succeed in mobile? Erase them. They’re already claiming to generate nearly $2 billion in mobile purchases a year.

See previous coverage of Where.

Disclosure: I have consulted for Where in the past. I know the team, including Walt, Dan and Ivan. Congratulations, guys!


Maximizing the value of deals on Facebook and foursquare

Facebook Places punch card

I was walking down the street the other day and did a search on Facebook Places. Up popped up a deal for Boyd’s Coffee: get 10 punches and get a free drink. As a potentially new customer, this was not the least bit attractive. I had no idea what their coffee tasted like. In order to get a deal, I’d have to visit at least 10 times. It may work as a retention tool, but not as an acquisition tool. A better offer for new customers would be 50 cents or a dollar off a drink.

Likewise, many of the mayor offers on foursquare aren’t appealing to the casual user. As foursquare has gotten more popular, it may take visiting nearly every day to win a mayorship at popular venues.

Most traditional marketing tools have focused on either acquisition or retention. Coupons (including Valpak and Groupons) get people in the door. Loyalty programs (like punch cards) entice existing customers to come back.

Facebook, Foursquare and the like offer the promise of doing both — if offers can be adapted for the user. As long as I haven’t checked into the venue before, I get a $1 off coffee coupon. Once I’ve redeemed that, it becomes the punch card.

Because Facebook and foursquare use persistent identity, they are less susceptible to abuse than paper coupons. This allows merchants to make richer introductory offers if they choose: the merchant could offer a free coffee the first time.

The platforms could also be adapted to support refer-a-friend promotions. For example, Tristan Walker recently tweeted about an incredible banana beignet dessert at Tamarine. I added that to my to-do list. Businesses could use these data to recognize and reward key influencers.

While the existing platforms are somewhat limited, they could quickly evolve into tools that give small businesses CRM tools that the big guys have.

A Facebook deals sticker at Boyd's Coffee

Target-ing iPad savvy shoppers with a fresh take on paper

Target continues its mobile innovation with the launch of its iPad app. The app makes it easy to find the nearest store and look up this week’s specials.

Target has had a long history of innovation. I’ve written before about a combination MP3 player/gift card and Target’s Android and iPhone apps.

While browsing through the circular, you can build a list of items that you want to buy. You can also get additional information on items for sale.

It would be nice if it also told you what aisle the item was stocked in, availability at your nearby store and synchronized the list you build with the iPhone or Android apps. In-store availability and aisle location is provided for a limited number of items. (Target’s database, which is available on iPhone/Android, seems to be more robust, but the linkages haven’t been made.)

Target has offered its circular online for years. But the flash-laden app seemed overdone, sluggish and just didn’t have the same feel as flipping through the paper circular. The iPad app pretty much replicates the experience of paper minus the environmental guilt. (And fussing with pages that stick together.)

Newspapers should be very worried. Free standing inserts that provide half the bulk of many Sunday papers are an important revenue source. They are also an important circulation source: while many editors may recoil in horror, yes, some people do do buy the Sunday paper just for the ads.

Newspapers can also learn from the Target app. I’ve been using the iPad apps for the WSJ, New York Times, Washington Post and USA Today. In translating a primarily paper experience online, Target has done a better job than all of them.

United's mobile check in not ready for takeoff

On my last trip, I had the opportunity to try United’s mobile check-in and mobile boarding passes. The promise is paper-free check in. It sounds really great, but it’s not quite there. Partly it’s due to United’s horrible user interface, partly the newness that gate agents aren’t accustomed to it.

The user interface rarely misses an opportunity to add extra steps.

  • When online check-in opens up, United sends you an email reminding you to check in. But clicking on the link in the email takes you to the full browser version. (It should automatically redirect you to the corresponding page on the mobile site if you’re on a mobile browser.)
  • When you go to http://mobile.united.com, you have to enter your confirmation number (who remembers these?), e-ticket number (ditto), Mileage Plus number (I don’t remember it despite being a top tier flier for years) or email address (long to type). There’s no way to just cookie your email address or MP number for all future check ins.
  • You’re presented with upsells, including the ridiculously overpriced Award Accelerator. (No way to say “I never ever want this.”)
  • After you finally check in, you’d think you get a boarding pass. But now you have to enter an email address to send the boarding pass to. (Never mind that you just logged into your account with an email address; it’s not prepopulated.)
  • You’d think, “OK, now, I’ll get an email with the boarding pass.” Nope. You get an email for each segment. Neither of which contains a boarding pass, but a link to a boarding pass.
  • Instead of using one link tied to your record, there is a link for each flight. If you click on the email for the wrong flight, you can’t just flip to the other flight. You have to go back and open a different email.
  • When you finally get to the boarding pass, you see a 2D bar code read by the scanner, along with your flight and seat information in text.

After doing all of this, I went to the airport without any paper. First step: security. The TSA agent looks at my ID and phone to compare names. He then has me hold my phone over a reader. It beeps and lights up in green. Good to go. At the gate, I hold my phone over the reader. Beep. Green. Board.

At the gate for my connection in Denver, I get paged because the agent wanted me to swap seats with someone else. She asks for my boarding pass. When I say I’ve got a mobile one, she prints out a boarding pass with a new seat assignment. Being a geek, I refresh the screen and see that it shows the new seat and ditch the paper. Unfortunately it doesn’t scan and she has to board me manually.

Leaving SFO, I had to standby for an earlier flight because of weather. Although the boarding pass initially showed my standby status, somewhere along the way that disappeared. (Causing me to panic and race to the big screens in the gate area to verify that I was still on the list.) When I cleared standby, the agent called me up and issued a paper boarding pass. The link I had showed no boarding pass.

In a future ideal world, my phone would beep when I cleared the standby list, I’d click to accept and the screen would show the updated boarding pass. It would free up the mob around the gate, let me get a drink or food and get the plane out faster.

In Denver, my original mobile boarding pass was still valid. It took some fiddling to get it to scan. I thought 2-D bar codes could be held in any direction, but that didn’t seem to be the case.

Note that although the boarding pass is generated dynamically, the information is static. If your flight is delayed, you won’t see that reflected. You’ll have to go back to http://mobile.united.com and enter your flight information. It also self destructs after a flight, so if you need documentation for business purposes or making sure you get your frequent flier miles, you might want to stick with paper. (In theory, it shouldn’t be needed for miles purposes, but I don’t like to rely on theory when it comes to airlines.)

More on: airlines