Check-In to the Present and Future of Location Based Services [Recap]

Posted by Kate Jurras on Thu, Nov 11, 2010

John Moore, CMO at Mullen, led an energetic panel on location based services (LBS) this morning at Hill Holliday. The experts included Sarah Amitay, Mobext; David Chang, WHERE, Inc.; Andrew Paradise, Aislebuyer; Mike Proulx, Hill Holliday; and Caitlin Remby, NAVTEQ Media Solutions. Even more exciting than the spectacular view from Hill Holliday's 35th floor conference room was the abundance of cutting-edge information and informed predictions about what Moore calls the hottest topic in marketing today.

Companies like Dunkin’ Donuts, JetBlue, and Gap are among those already taking advantage of LBS, but the newness of the technology means we have more questions than answers. Moore presented a short and humorous video in which Bostonians were asked to talk about LBS. The confused answers demonstrated that although this event’s attendees use apps like Foursquare and Shopkick like it’s their job, they do not represent the norm.

It is important to note that although the video is quite funny, in reality, a great number of smartphone users are already taking advantage of LBS without knowing it. For example: when was the last time you used Google Maps? I’d probably be lost in a jungle without it.

When is LBS Going to Take Off?
When Moore asked, somewhat rhetorically, “is this all just a bunch of hyperbole?” Proulx responded, “What is more context-relevant than your location?” LBS is poised to become the next big thing. To put this in perspective, in less than two years Twitter grew from a strange, irrelevant phenomenon to a highly prevalent tool, largely due to two factors: celebrities adopting Twitter like an adorable foreign-born orphan, and members of the news incorporating it as a serious tool.

There was some debate among panel members as to whether LBS needs the involvement of giants like Google and Facebook, or whether, as Paradise argued, “Innovation in the tech industry tends to come from startups,” due to the high risk-factor. LBS is just beginning to take off, so the answer to this question remains to be seen.

Some important contributing factors to the presumed expansion of LBS are:

  • The lowering price (and increasing prevalence) of smartphones—although some SMS services exist for “dumb phone” users, they tend to be an inefficient use of time and money.
  • Incentives—Foursquare offers badges and points, and rumor has it Facebook will soon offer incentives for checking in.
  • The increasingly social nature of our society (Amitay: “we want to share, we want to communicate").
  • The predicted consolidation of apps—it’s unrealistic to think that customers will use one app to locate a store, and another inside the store; consolidation will facilitate the ease of use.
How is Mobile Commerce Different from E-Commerce?
  • It’s persistent.
  • It’s context-aware.
  • It’s personalized.
  • Mobile is the bridge between at-home and in-store purchasing.
  • Phones today are much more powerful than early PCs; they offer a connection and entertainment experience (less than 10% of iPhone usage is phone).
  • M-Commerce is supported by the emphasis on geosocial networking.

Proulx prognosticated that we’ll start to see a shift in advertising: traditional ads will be replaced by apps that encourage utility. The panel generally agreed that LBS will grow as we see more apps that support in-store purchasing (as opposed to online), and those that follow transactions through to the end—yes, this person was driven to enter a store, but did she buy anything?
What is your experience with location based services? What apps do you use on a regular basis? How do you see LBS changing the face of marketing? In inches, what is the furthest you've ever been from your mobile phone?