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Location, location, location

Two developments in the market now mean that location-based e-business services are now ripe for development. These are the growth of GPS capability in handsets and the exponential growth of free of cheap downloadable third party applications and mobile web interfaces being designed increasingly as part of an integrated go-to-market package, rather than as an afterthought or experiment by firms. Analysts Gartner estimate that some 29% of new phone handsets will include GPS in 2009. And at the time of writing, some 100,000 applications have been developed in the iPhone App Store with over 2bn total downloads.

The combination of these two developments can be seen in the growth of genuinely location-based applications. Now, so-called LBS applications have been around for some time and have often been described as ‘solutions in search of problems’. But early implementations were clunky and unreliable, GPS expensive and not widely available and consumer unused to or unwilling to pay significantly for such information. Contemporary applications show much greater promise.

We can consider contemporary LBS services across two broad dimensions: the extent to which they are personal or social applications and whether they are push or pull in orientation. Applications such as physical asset or information tracking tend to be user-initiated, whilst geographically targeted incentives (such as proximity promotions), or applications such as child location or congestion alerts are pushed to the user. On the other axis, we can distinguish between personal productivity tools such as local train departure information, as against social apps (such as who is tweeting nearby? or where are my friends?) Each type of application offers different opportunities for marketers, although whilst clearly push-based apps are more attractive for market targeting purposes, the reality is that users may prefer to retain control of the interaction.

Matrix of location-based mobile services

Branded pull-based personal apps range include that launched in March 2009 by UK discount hotelier Travelodge, which provides a simple interface to allow the user to find, price, and book the nearest Travelodge to their location. Similarly, Tesco Finder provides an on-request shelf lookup and pricing service for individual items in the user’s nearest store (‘Sausage rolls are in aisle 2, 8 units along and 2 shelves up. And by the way, we’re offering any two for £1.50’). Push-based personal apps rely on responding to profile or stored alert information in a proactive way. Zillow’s Real Estate app will push-notify you of new property for sale near your current location. Aloqua is a mobile search engine which proactively notifies the user of interesting places, events and Facebook friends near you (www.aloqa.com). The user can select ‘channels’ (such as pizza outlets, movies, concerts and medical facilities) and determine the extent of ‘proactive notification’ of particular events, such as a voucher available in the area, to a child leaving a safety zone.
Social apps, on the other hand, are reliant on network effects to create sufficient critical mass to be useful to both users and to marketers. Social apps with push-based capabilities include Centrl, (www.centrl.com), Brightkite (www.brightkite.com), Foursquare (http://foursquare.com) and Google Latitude (www.google.com/latitude). Most will notify the user of friends in the vicinity. For example, Foursquare allows the user to ‘check-in’ wherever they are and will tell the user’s friends where they can find them and recommend places to go & things to do. But services such as Centrl offers to push money-saving offers to them too.
Whilst social apps are less well developed than personal apps and push apps less than pull apps, many think that the future lies in ‘social push’. It is here, too, that marketers may begin to use mobile apps as tools to understand social behaviour rather than just individual behaviour, and to incentivise it accordingly. The next two years should be quite interesting. As one blogger put it recently: “mobile applications without context provided by location-based services will be like pizza without cheese.”


One Response

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