A frenzy hit our offices on Friday: the Gap offered free jeans to the first 10,000 Facebook users who checked into a Gap location on Facebook.  The offer was part of Facebook’s new Deals feature.  Locations listed in Facebook Places can now offer individual, friend, loyalty, and charity deals to users that check into Places locations.  (Caveat: Blackberry users are out of luck – this feature is for iPhone and Android users, or through the http://touch.facebook.com/ website.)

Weeks after the logo misfire, the Gap should be admired for their pluck, jumping head first into a brand new social media feature.  But did it work?  And what did it do for the brand?

Pros:

• Got foot traffic into Gap stores (even if you checked in a few blocks away, you had to pick up your jeans) just in time for holiday.
• Free jeans!

Cons:

• No jeans.  Despite the coupon Facebook users were shown after checking in (which notes that it expires in several hours), there were no jeans on offer to customers later in the day.
• Not enough staff training.  Gap employees at the Times Square location seemed perplexed when shown completed check-ins with coupons.  A manager was called.  More confusion.
• A missed promotion opportunity.  Gap put their name out there in a big way on Friday – the news media is still talking about it.  But when you search for “Facebook & Gap jeans” on Google news, the Joe’s Jeans ad is in first position and responds to user intent by clearly offering its Facebook page as a search result.

For those who continued using Foursquare or Gowalla when Facebook came third-to-market with Places, Deals – and the feature’s popularity with major national brands – might be the necessary lure to drive Facebook check ins.

Conclusion: Some of us have new jeans…. Some do not.  We might have a better awareness of where the nearest Gap store is, but we might not be so interested in going in.  Facebook Deals has a lot of potential, but the execution isn’t quite as sophisticated as it needs to be to avoid compromising a brand’s image.

Confession: my guilty pleasure and my true love are cupcakes. I go to great lengths to find the perfect cupcake, no matter which city I am in. In my quest to find the perfect cupcake shop, I search the web for all the local cupcake shops, read reviews and just recently started to turn to my trusty iPhone to use one of my location-based apps.

There is no denying that location-based apps are dominating the social space right now and are changing people’s approach to finding items or businesses. These apps are a simple way for business to build discovery and drive customer loyalty.  These interactions prove mutually beneficial: apps like foursquare allow local businesses to post specials and review data on check-in behavior and users can give tips, read reviews and redeem offers. Thanks to foursquare and businesses posting specials for check-ins, I have redeemed several discounts for free cupcakes, coffee and ice cream. I find myself visiting more local businesses to take advantage of specials they post via foursquare.

My increased reliance on these apps has highlighted areas that warrant further exploration. For example, I would love to see location-based apps recommend business or services based on my check-in behavior. Behavioral targeting would be a great way to facilitate new discoveries based on a user’s past behavior.

A recent Forrester report pointed out that adoption of foursquare and other location based apps is still too low to warrant strategies from major marketers. That may be the case, but adoption will likely increase with the recent Facebook Places launch and it’s time for big marketers to pay attention. With more and more people using foursquare and Gowalla and new location-based applications hitting the market, including Facebook Places, where is the future headed? Share your thoughts below (and any tips you have on the best cupcake shops in your city).

And in case you were wondering, here’s one of my favorite cupcakes from NYC:

image from billysbakerynyc.com

Last night, Facebook announced the launch of Facebook Places at their headquarters in Palo Alto, California.  Facebook Places is a location-based check-in service that allows users to share where they are, find out where their friends are and discover places in their area. Users can also tag friends when they check in, something that other services do not currently offer. The service allows businesses to create or claim Places on Facebook and encourage users to check in. Eventually this could lead to the ability to offer discounts or promotional messages to users at a location or nearby.

Location based check-in services have been growing in popularity and it’s been hard to ignore the rumors and hype surrounding the launch of Facebook’s own product. The big question has been: will a Facebook check-in service destroy competitor applications?

During the announcement, Zuckerburg joked about all the features Facebook would not be integrating into the new platform.  However in a dazzling display of netizenship, Facebook decided to play nice with Foursquare, Gowalla, Yelp and Booya (the makers of MyTown). While Facebook will continue to port over all your social good from the most popular location-based services, the impact on these competitors remains to be seen. According to the most recent Mashable poll, only 30% of people say they will use the service (but another 30% responded “Maybe: I’m going to wait and see”), suggesting adoption may start off slow.

Much like Social Graph, Places promises to unify even more data from across the web. It is only a matter of time before Facebook launches other services such as: peer to peer payment systems, similar to Paypal, group deal sites, similar to Groupon, and online classifieds, similar to Craigslist.

According to comScore, as of July Facebook is the third largest video site in the U.S. Last March the Private Data Equity Center valued Facebook at $35 Billion. InsideFacebook.com states they are projected to hit $1.1 Billion in ad sales revenue after hitting 700 million in 2009. With these numbers, we’re not to far away from saying, “Hey I’ll just Facebook you the money,” or “Just sell it on Facebook.”

Are you going to use Facebook Places? What’s next for Facebook? We want to hear from you!