Amex & Foursquare partnership rewards users for social media publicity. But is this a good thing?

Foursquare's news is hot on the heels of its announcement that it had recently hit the 10 million user mark. The partnership, which brings no direct financial gain for Foursquare, offers its US-based Amex cardholders discounts when they check in at select merchants. All users have to do is link their Amex card with their Foursquare account to receive rebates on their credit card statements.

Essentially, Foursquare, American Express and participating retailers are rewarding their customers for talking about them on social media. While the method is revolutionary in social media, the concept is not unfamiliar.

Hacking (left) and Sinha

"There are more and more rewards being given out to users for interacting with a brand on social media. A few months ago, there was a surge in companies offering incentives for people to ‘like’ their Facebook page," noted James Hacking, vice-president of BlueCurrent Hong Kong - a specialist agency under Fleishman Hillard focusing on social media, search and public relations.

The danger, says Hacking, is how widespread the trend is getting. "It is increasingly hard for a brand to ‘stand out'," he said.

Manish Sinha, chief strategy officer of Digitas India agrees that this partnership is bang on trend. "Recent data finds that close to 40 per cent of the consumers want deals from brands on social media platforms more than interesting content or engagement," he said.

While Sinha believes the move towards social media rewards is in tune with consumer behaviour, Hacking opines that brands will nevertheless have to move beyond rewards and giveaways.

"Brands will realise that they also need to have a real connection with their consumers and that means truly understanding their profile and needs and above all creating content that will engage with them and last much longer than the benefits of receiving a one-off reward," said Hacking.

The limitations of the rewards incentive arise when users have negative experiences with a product or service they're talking about, said Hacking. "Do they still get rewarded or do they get barred from receiving the offer on their next visit?" he asked.

Nevertheless, there is little doubt that this partnership will both revive location-based marketing as a trend and that similar deals will soon be inked in Asia, said both the experts.

"Looking at the eco-system of online deal sites and their exponential growth, adding a mobile location based layer is the next logical step," said Sinha and added that Asians in particular love rewards.

However, even without rewards, Foursquare is proving popular in Hong Kong indicating a value that goes beyond scoring a deal. "In recent months, I’ve seen an increasing number of people checking in on Foursquare but not just to get rewards. Instead, lots of people use Foursquare to get reviews and recommendations of the places they’re visiting much like using www.openrice.com," he said.

"What this really means is that what causes a surge in popularity is as much about the deals and rewards as the technology," said Hacking.