Sometimes it seems that, since we can do almost everything online, that not only do we believe that we actually do everything online, but we also start to believe that everyone else does, too. Even as the online world has dramatically affected our habits, we should remember that much of the commerce and business in the world is still done in meatspace rather than cyberspace.

Many Clicks Lead To Bricks

After all, what is cross-channel without the physical store? What is Yelp without a location to review? What is Scoutmob without a place to mob? Where are all the hipsters going to get their coffee without the neighborhood coffee shop? One of, if not, the biggest question of all in the cross-channel experience discussions is: How do we unambiguously quantify the online channel's impact on in-store traffic? How do we attribute a store visit to the media source(s) that brought that person in?

Picture this. You work for a company that makes stuff. You have retail or dealer partners who sell the stuff you make. You believe your product deserves better treatment from your partners in the form of shelf and floor space or marketing focus. Your partner then asks you the salient question: "What have you done for me lately?" In other words, "How are you driving potential business to me?"

The Challenge of Attribution

Attribution is a challenge that plagues marketing, UX and media professionals across many industries and channels. The lack of an easy method for store-visit attribution is most keenly felt by:

  • Manufacturers of consumable and durable goods. Consumer Packaged Goods manufacturers (CPGs) such as P&G, Durable Goods companies such as Tempurpedic and Michelin and Original Equipment Manufacturers (OEMs) such as HP and Dell are desperate to measure how many people they send to physical retail outlets. Durable good manufacturers are the most in need here, because they typically don't have any retail experience, their products are purchased infrequently by consumers and their dealers typically pit the manufacturers against each other -- so much so that the manufacturers pay the dealers' advertising bills in the form of coop (co-operative) advertising but don't often validate how, or sometimes even if, the money is spent.
  • Online advertising mediums that do not have a strong couponing or location-based component such as Yahoo!, Google and Facebook are also keen to find methods of attribution beyond how many maps users printed (especially given that map printing is a dwindling use case with the proliferation of GPS devices and smart phones)

Oops! I Spoke Too Soon

Foursquare has something really hot on its hands and I'm not sure they see it. For some reason, the location-based pioneer has had some problems monetizing its service -- at least that's what I take away from Fourquare's shift to direct competition with Yelp. I may be naive and simplistic here, but if I were in Foursquare's shoes, I'd rather market my ability to ability to attribute a person's visit to a location (like it is currently doing with American Express) than to try to match up with the national salesforce of Yelp. in the quest to get a couple bucks out of a cash-strapped restauranteur.

Location-based services (as well as a whole host of poorly thought-out startups) have, in my opinion, not connected their primary audience use case with the deepest potential business value proposition that is available to them: Attribution for those parties with the deepest pockets and the greatest sense of desperation. This all harkens back to the lack of business and monetization strategy infused into the current round of startups as well as much of the web 2.0 darlings.

Three's Both Company and a Crowd

If attribution is the holy grail for Foursquare, it still has one creative and technical challenge left: How can Foursquare's marketers create three-way partner offers that compel users to check-in at specific retail locations? Locations in Foursquare are managed by the location proprietor and only recently have surfaced promotions from a third party that stands to make some profit off of the consumer transaction.

This will only get more perplexing when the online advertising portals have a strong incentive to attribute the value event of bringing a consumer to a physical retailer, but have no profit in the actual transaction. Without a strong promotion to engender the desired behavior, neither the check-in nor the attribution will happen. My prediction is that if the Foursquare chooses to monetize the capability of attribution, that the inevitable implementation pattern will emerge where location proprietors can delegate promotion management to multiple third-party marketers separate from the management of the location itself and the consumers checking in will have to choose among several promotions per location.

Will Foursquare lean into the American Express experiment and get traditional physical businesses to offer promotions supported by the manufacturers? If products with big audiences such as Foursquare cannot connect with sustainable, defendable and differentiated revenue models, the impending web 2.0 crash may take several high-profile players down and leave the uber-connected consumers with a sense of loss as their preferred sharing mechanisms dwindle in number and maybe even go extinct.