Loopt eyes “Holy Grail” of location-based advertising as it signs another content deal

Location-based social network Loopt signed another content deal today, bringing in recommendations, menus and offers from foodie e-mail newsletter Tasting Table. When Loopt players “check-in” into restaurants or look up spaces in the game, they can get reviews and leave tips for other users.
Content deals are more or less par for the course these days in location-based services. Startups like Gowalla and MyTown accumulate hundreds of thousands of users who play their games and share their locations with friends. But aside from the game-playing experience itself, they have little original content to offer to help users really make the most of where they live.
So companies like Foursquare and Loopt have been accumulating partnerships with media companies like Zagat, Bravo, HBO and The New York Times. The deals essentially allow these young companies to have rich editorial offerings while helping slower, traditional media companies like Zagat keep up against user-generated review sites like Yelp.
So a Tasting Table deal really isn’t all that surprising. But one thing did perk up my ears yesterday when I was talking with Loopt CEO Sam Altman. Altman mentioned that Loopt is on the verge of offering a much more accountable approach to local advertising.
“The Holy Grail of performance advertising is actually delivering someone to a store,” he said. “We have a new product launching pretty soon that will help advertisers pay for the number of people we can actually deliver.”
This is accountability that only really a mobile application could offer. A company could keep track of ads shown and whether people actually visited a location later using GPS or voluntary location-sharing.
Ideally, the cost per action will outstrip the standard cost-per-impressions or cost-per-click advertising model by several times. Given privacy sensitivity, I would say the smart way to do this would probably be opt-in only, through tracking voluntary check-ins. A company could incentivize this with coupons or offers for “checking in”, or temporarily sharing your location with friends.
Altman said there would a self-serve way of buying these ads. Much farther down the line, one could imagine a bidding model where businesses set the value of a potential store visit from a new customer akin to Google’s advertising bidding system for clicks. Google itself has been ramping up its mobile and local advertising offerings, agreeing to pay $750 million for mobile advertising network AdMob.
Loopt has 3 million registered users and 1 million monthly actives. That’s a user base that far outstrips other companies. MyTown just passed 1 million users last week and Foursquare is edging in on 420,000 users today. Loopt’s secret is that it has distribution deals with mobile operators including AT&T, MetroPCS, Boost Mobile, Sprint, and Verizon to either have Loopt pre-installed on phones upon sale or at least heavily promoted in decks of apps on new models.
Loopt is one of the earlier in this wave of location-based social networking startups. They’ve been backed by Sequoia Capital and New Enterprise Associates with more than $13 million in funding.