2009 Horizon Report Economic Development Edition

Two to Three Years: Location-Based Services

Time-to-Adoption Horizon: Two to Three Years
It is becoming possible to direct specialized services to millions of consumers exactly when they want them. The trigger for this is the consumer’s location, which is known to a device commonly carried by nearly everyone with purchasing power: the mobile phone. Mobiles with the ability to run third-party applications can locate goods and services, find information about discounts and sales relevant to the time and place, and track deliveries and even people. It is already common for businesses to be found by such services; the next step, the one that is still a couple of years from mainstream use, is to provide customized location-based applications that empower consumers by taking advantage of where they are at a given moment. Already we are seeing the beginnings of such services, and their value to customers is tremendous.

Overview

With the advent of easily accessible GPS technology, especially embedded in mobile devices, location-based services are on the rise. Early applications focused on marketing, advertising, and social networking: consumers could discover retailers and venues near them offering services of interest, as well as find friends and colleagues in the area. Location-specific data can be displayed in a variety of ways: photographs, videos, or text overlaid on maps, photos, or live views of the area, for instance, or listed by location name and address. Contextual information can include historical data, weather reports, locations of nearby people, objects, and places, and so on. Location-based information is not hard to access, and it is becoming easier to create and distribute, as well.

There are three ways that location can be discerned, at decreasing levels of resolution: geolocation, cell tower triangulation, and wireless Internet access points. Tools for developers are lowering the bar to creating location-based applications; while programming chops are still required, systems like TransGo by TransFormat (http://www.location-based-media.de) enable rapid development of location-based applications using GPS, RFID, network triangulation, and other technologies. Digital resources can be connected with physical locations and objects very easily, so that once location is established, tools can direct consumers to businesses in a particular area that offer products and services needed at that moment. Social applications are common — BrightKite (http://www.brightkite.com), for instance, shows nearby friends, places of interest, and people who might be worth meeting based on the user’s physical location and favorite activities. Yelp (http://www.yelp.com) allows users to search for restaurants and other businesses, displaying community reviews to assist consumers in deciding which to visit.

Location-based services make it possible to engage in a deeper level of interactivity with customers. Creative businesses are taking advantage of applications that, on the surface, are tools for social networking. For example, FourSquare (http://playfoursquare.com) is a mobile application that determines the user’s location, suggests a list of nearby places, and awards points to users that check in from those and other venues. Users can add “to-do” items related to places they visit. By earning the most points in a single location, a person can become the “mayor” of that venue. A number of innovative businesses are using FourSquare to their advantage by offering discounts on products and services to the current “mayor” and by creating to-do items that lead customers to their location in order to win the points associated with completing the activity.

Relevant Applications for Small to Medium Businesses

In an August 12, 2009 press release, the Gartner research company indicated that although mobile device sales are down 6% overall from a year ago, sales of smart phone-type devices are up 27% (http://www.gartner.com/it/page.jsp?id=1126812). Gartner also expects the consumer location-based services market — as represented by smart phone owners — to more than double in 2009 compared to 2008 (Mobile Internet Devices, December 2008), from 41.0 million units sold in 2008 to 95.7 million for 2009. Revenue, too, is expected to increase from $998.3 million (2008) to $2.2 billion in 2009.

The opportunity for business is clear. With more GPS-enabled devices in the hands of consumers — consumers with the resources to own a smart phone — the market for location-based applications is growing. From helping customers find their storefront to providing customized contextual services, businesses now have the means to reach consumers when and where they are ready to make a purchase or transaction. Some services support multiple businesses, like Yowza!! (http://www.getyowza.com), which works with merchants to offer coupons to mobile users. The application lists nearby restaurants and retailers (with address and phone number) that are advertising sales or offering coupons and tracks how many times each coupon is used, when it has expired or been used up, and how much was saved by using the coupons. Another application, Where, assists travelers and locals with a host of information, such as the lowest gas prices nearby, weather information, local news, and a Starbucks locator. The application also allows users to search for a type of business or item (“drug store,” “lamp,” “Mexican food,” “car repair”) and see retailers near them who offer the goods and services desired.

For businesses themselves, location-based services can help manage resources, ensure the accuracy of information such as time and mileage data, and save time that once was spent in data entry. Applications like Loopt (http://www.loopt.com) and Glympse (http://www.glympse.com) can be used to track field employees; they allow a user to invite others to receive information about where he or she is at a given time. Other solutions capture time, mileage, and distance traveled and export the information in a way that can be imported into accounting systems like QuickBooks, eliminating the need for employees to first record and then enter such information by hand.

A sampling of applications of location-based services across industries includes the following:

• Deliveries. Flare is a tracking system geared toward small business owners who need to keep tabs on employees such as pizza delivery personnel. The business owner can track the delivery route, as can the customer. The tracking number expires at the end of the shift to ensure the delivery person’s privacy.
• Consumer Services. Geolife is a service that enhances the traditional to-do list with location-specific information. For example, your mobile will alert you as you pass the grocery store that one of your tasks for the day is to pick up a gallon of milk. Another service, Locale, automatically senses where you are — at the office, in court, at home, at the movies — and adjusts your ring tone accordingly, silencing it when necessary.
• Urban Planning. Location-based services like Google Maps display traffic patterns and identify areas of congestion, which can assist engineers and city planners as new routes of travel are developed.

Location-Based Media in Practice

The following links provide examples of location-based services in business settings.

Acuity Mobile Marketing Services
http://www.acuitymobile.com/solutions/marketing_services.php
Acuity Mobile delivers mobile-based marketing solutions for businesses. They offer a variety of marketing techniques, several of which include location-aware technology.

Brands Run Cross-Platform Location-Based Ads with 1020 Placecast
http://www.mobilemarketer.com/cms/news/ad-networks/3115.html
(Dan Butcher, Mobile Marketer, 27 April 2009.) Placecast combines location-awareness with other data, like demographics of commercial and business zones, to take full advantage of location-based advertising.

Compass and Camera Used in Location-Based Apps
http://www.wired.com/gadgetlab/2009/02/compass-and-cam
Businesses geared toward hospitality and tourism can benefit from apps like nru (‘near you’), which shows either a bird’s eye view of the surroundings or detailed information on a particular building or structure, depending on how the mobile device is held.

Layar
http://layar.eu
Layar helps users locate clubs, restaurants, theaters, and more by layering digital information over the image on a mobile’s camera, showing where to find venues nearby.

Location-Based Digital Media Poised for Growth in 2009
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=99238
(Cory Treffiletti, mediapost.com, 28 January 2009.) Location-based digital media – the screens displaying digital information at the bus stop, in coffee shops, and outside the bank – reach customers without the use of a mobile device.

NearbyNow: Find Products Near You
http://www.nearbynow.com/home/San+Francisco%2C+CA?clinkid=frontpage_frontpage
Using their mobile telephones or the Internet, shoppers search the inventory of surrounding stores to find the best price. Consumers have the ability to put items on hold with a single click.

For Further Reading

The following articles and resources are recommended for those who wish to learn more about location-based services.

2009: The Year of LBS (Location-Based Services)
http://www.readwriteweb.com/archives/2009_the_year_of_lbs_location-based_services.php
(Sarah Perez, ReadWriteWeb, 7 July 2009.) From finding the nearest coffee shop to tracking your children, location-based services offer a host of solutions to everyday problems.

Developer’s Guide to In-Application Advertising
http://www.skyhookwireless.com/developers/developersguide.pdf
(Skyhookwireless, 2009.) This guide includes examples of mobile advertisements, discusses issues of development and deployment, and describes the major players in this space.

LBx Journal: Location in the Language of Business
http://www.lbxjournal.com/index.php
(Natasha Leger, Editor, LBx Journal, May 2009 to present.) This online journal is dedicated to exploring location-based technology. The objective of the publication is to advance businesses by taking full advantage of location awareness.

Location Based Services Boost Productivity: Q&A with Melanie Kreh of Cbeyond
http://www.readwriteweb.com/archives/2009_the_year_of_lbs_location-based_services.php
(Benjamin Tomkins, bMighty.com, 7 May 2009.) This interview discusses different ways that location-based services assist with fleet management, customer service, managing a mobile workforce, and more.

Location Based Services: Why Smartphone Apps Will Pay Off for Advertisers, Carriers, Application Providers
http://blog.compete.com/2009/06/02/location-based-services-applications-carriers-advertisers
(Andy deGaravilla, Compete, 2 June 2009.) Research indicates that while most location-based services are currently used for navigation and checking the weather, consumers have an ever-increasing interest in receiving offers and special coupons from local retailers. Extensive research is compiled into informative charts in this article.

Using Location-Based Technology to Attract Customers, Track Employees
http://smallbusiness.dnb.com/media-telecommunications/telecommunications/11809001-1.html
(D&B Small Business Solutions.) This article offers a few examples of how location-based services can help small businesses. Several companies providing location-based services are mentioned.

Delicious: Location-Based Services
http://delicious.com/tag/hz09biz+locationmedia
Follow this link to find additional resources tagged for this topic and this edition of the Horizon Report. To add to this list, simply tag resources with “hz09biz” and “locationmedia” when you save them to Delicious.