McDonalds and the supersized Foursquare impact

Oh dear - the normally very sensible eConsultancy blog got itself a bit bamboozled by breathless social media PR today when it broke the story about McDonalds' "Foursquare Day" which offered users checking into McDonald's a chance to win $5 and $10 giftcards. The results were apparently astounding:

On Foursquare Day, McDonald's saw a 33% increase in check-ins from the day prior. And for the week of the special, check-ins increased 40%. Says [McDonalds Head of Social] Wion:

"I was able to go to some of our marketing people — some of whom had never heard of Foursquare — and say, 'Guess what. With this one little effort, we were able to get a 33% increase in foot traffic to the stores.'"

Only problem is, as RWW pointed out a bit later:

Let's look at the numbers, though, and it's easy to see why Foursquare could never account for a 33% increase in foot traffic to McDonald's. In the U.S., McDonald's serves about 26 million customers per day. On FourSquare Day (4/16/2010), Foursquare had less than 1 million users. Clearly, the math doesn't add up here.

33% increase on 26m, not 1m - now that's what I call Supersizing

Still, this was picked up by all the usual Flat Earth News blogs who Want To Believe, and if you believe the Wildean nostrum of publicity they got a huge bang out of their apparent $1,000 spend (assuming that is true....I would suspect that is the direct spend on prizes, not the spend of all the labour etc to run the actual event).

Actually, doing the numbers - asume 26m burger-buyers a day out of a US population of 310m (say 260m once young kids have been removed and to make the calculation easy) and that Foursquare users are representative, then 1m Foursquare users should generate 100,000 burger buys a day and thus there was a 33% - c 33,333 - increase in checkins. Say a round 30,000 to account for 10% false checkins, and say the average buy was a $4 burger at say 25% margin, and you have c $30,000 generated. Assuming the average McD PR staffer costs $100,000 a year fully loaded, we can calculate this buys about 4 man (or woman) months of work so I reckon they about broke even, probably a small(ish) loss of a $10k or so. Still, not bad for all the publicity - assuming, as I sad above, that it is Wildean. That wil be interesting to track.

I must admit my initial reaction to the eConsultancy post debunking was "there but for the grace of god" as there is so much bullsh*t being flung about Location Based Services right now you really have to be constantly on alert (which implies a huge fall from the top of the Hype Cycle is coming if you ask me), but I do think the subsequent attempt by eConsultancy to bluster it out in the comments by justifying it on the PR bang for buck is an error for them.