Location-Based Facebook: Marketers Optimistic, Yet Cautious on Privacy

San Francisco, CA – Facebook is expected to announce today the location-based service many in the industry have been predicting since the social site debuted its open graph platform in April. The social site is holding a news conference at 4:30 p.m. Pacific Standard Time to shed light on its plans, which will be attended by ClickZ News.

Whether or not the Palo Alto, CA-based company will be launching a Foursquare copycat or a something different remains to be seen. However, attendees at ClickZ’s Connnected Marketing Week in San Francisco said – no matter the details on how exactly Facebook users will check in on their mobile phones – brand advertisers will surely be more interested in entering the nascent geo-social space than they were before. And whether a geo-social platform on Facebook were to launch immediately or in three months, the attendees said such a development would likely represent a game-changing juncture for mobile marketing.

“Absolutely, it will be the beginning,” said Tracy Falke, social media specialist for Freestyle Interactive. “It will be the first step because people know [Facebook] and feel safe with it.”

Yet, Facebook is entering a space that’s been cultivated for the last two years by geo-social-dedicated platforms like Foursquare, Gowalla, MyTown, Loopt, and others. Would Facebook squash those brands if its location-based product is of similar quality?

“I think it will be a threat to [them],” said Harry Gold, CEO of Overdrive Interactive and a ClickZ columnist. “I think people have an appetite to be members of only so many different things. So there will be defectors from Foursquare and other services. At the same time, there will be people who stay with [Foursquare]. However what Facebook already has that a Foursquare doesn’t is 400 or 500 million people using it. And secondly, they already have apps on people’s phones. If all they have to do is update the app to include a check-in, they could establish a user base at a pace that a Foursquare couldn’t match.”

And that very scale will be what appeals to advertisers, said Kevin Barenblatt, CEO of Context Optional. “From marketers’ perspective, they [couldn’t] care less about what service they are using,” Barenblatt explained. “They want to reach their consumers and turn that online activity into store traffic. With over 500 million users, Facebook presents a bigger marketing opportunity.”

At the same time, some attendees predicted a major public backlash will ensue if Facebook isn’t extremely careful with making privacy controls easy to both understand and use.

Howard Ogden, founder of social media company Augment Reality, said Facebook’s online and mobile reach would lead to fast-paced user adoption and a subsequent user confusion about what data they are actually sharing with the public. “We are going to have people checking in that have no idea the implications of that data being stored on a server with the user ID,” he said.

Aaron Hardison, an app developer for Spotted.at, described the new location-based function as “Beacon for everyone.” He was referencing Facebook’s controversial and failed experiment that notified users’ friends about some of their online purchases. Hardison added that parents may be in an uproar if their kids are suddenly publishing their whereabouts online.

“Parents will just riot,” he said. “There’s going to be a huge backlash, in my opinion, to all of this. It could be very dangerous. But I can see why Facebook is doing it because it’s going to be very profitable when they can do location-based advertising via that mobile interface.”