By Bhavin Shah , September 21, 2010
Interest in commercial location-based services accessed from mobile devices—from navigation to social networking—continues to climb.
ABI Research projects the market for location-based social networking alone to reach $3.3 billion by 2013. And, indeed the field of social networking services is quickly crowding.
The August announcement of Facebook's Places mobile check-in service, for example, drew major media attention, given the potential threat to competing services like Foursquare and Gowalla.
Location-based social networks are seen as a promising gateway to mobile-advertising revenues, as personalized messages are delivered to targeted, receptive consumers where they are at the moment.
But to encourage large-scale consumer participation mobile-device users must be instantly and precisely located to deliver relevant and timely promotions.
Relevance matters
Consumers do not want to be flooded with offers that are not pertinent to them from a geo-location standpoint.
The more accurate the location technology is, the more enthusiastic people will be about these services, and their willingness to opt-in to mobile-advertising programs will soar.
A high-accuracy location capability is especially critical indoors and in dense-urban areas. It is in these settings that consumer demand and revenue potential for social networking, mobile advertising and other commercial LBS are at their highest but the prevalent, satellite-based location technologies are at their weakest.
Global Positioning System (GPS), for example, does not work indoors or where there are "urban canyons."
However, the technology landscape is changing.
New Federal Communications Commission (FCC) regulations in the area of E911 emergency response are currently being defined, which could mean wireless operators will have to enable higher-accuracy location capabilities across all environments—with strong impact rippling through the LBS and mobile-advertising space.
Finding consumers where they actually are
Retailers, consumer brands, hospitality service providers and many other businesses see ripe opportunities in mobile advertising to drive sales and strengthen customer relationships.
That potential hinges on the capability to reach consumers where they are and at the moment they are ready to spend, providing an immediate call to action.
Statistics show that the primary place to find people is indoors.
The Environmental Protection Agency says that Americans are indoors about 90 percent of the time, on average.
Furthermore, in a recent survey, J.D. Power noted that the percentage of wireless calls made indoors had climbed to 52 percent, and surely that ratio is rising rapidly given that consumers continue to drop landline phones in favor of going wireless only.
It is clear that the ability to locate users of mobile devices when they are indoors is growing in importance.
For commercial LBS applications to attract consumers in large scale and offer optimal potential to mobile marketers, they must be able to precisely, rapidly and automatically locate any and all users inside shopping malls, homes and office buildings – anywhere people live, work and play.
Transforming mobile advertising
Consider how mobile advertising could leverage this capability to instantaneously, precisely and automatically locate a mobile-device user inside a shopping mall.
Take the example of a husband, with tired kids in tow, shopping on the eve of his wife's birthday.
Fearing a two-hour ordeal to find a suitable gift, while keeping his children appeased, he receives on his mobile device a coupon for 20 percent off an appropriate product in the specific area of the first department store within the mall that he visits. Impulse buying—a huge generator of revenues in retail already—lures a customer with the coupon as a hook.
Consumers would not be inundated with contextually-unaware coupons and ads, but instead receive only those offers relevant to their current surroundings aligned with their predefined preferences.
High-accuracy location similarly will enhance the social-networking and other commercial LBS on which mobile advertising piggybacks.
Services such as Facebook's Places and Foursquare, which allow mobile-device users to exchange location information with friends, would seamlessly track users as they pass in and out of buildings, instead of requiring manual check-in.
Auto-detection, enabled by a high-accuracy location capability, would allow service users to connect more efficiently and easily at a crowded nightclub or sporting event, for example, making it a seamless experience.
Conclusion
A high-accuracy location capability for indoors and dense-urban environments will create a better user experience for commercial LBS applications, increasing the consumers who opt-in to receive mobile advertising.
Today, most commercial LBS rely on rudimentary, legacy location technologies that fail to deliver the necessary accuracy, especially in these key environments.
Hybrid location solutions that leverage complementary technologies—Radio Frequency (RF) pattern matching, which is ideal for dense-urban and indoor environments, and Assisted GPS (A-GPS), which is strong in rural and suburban areas, for example—enable any mobile users on a network to be accurately found wherever they are.
With the FCC seemingly poised to require wireless operators to be able to more precisely pinpoint 911 callers, higher-accuracy location capabilities may soon be in place.
Such a development stands to not only enhance targeted mobile advertising and the growing range of existing commercial LBS, but also unlock a host of next-generation indoor services that have not yet been deployed.
Bhavin Shah is executive director of marketing and business development at Polaris Wireless, Santa Clara, CA. Reach him at bshah@polariswireless.com.
http://www.mobilemarketer.com/cms/opinion/columns/7433.html
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