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Summary:

According to a recent survey, fewer than 5 percent of U.S. online users have ever used a location-based application such as Foursquare on a mobile device. And almost 85 percent of those who responded to the survey said that they were not familiar with location-based services.

Amid all the attention that location-based services have been getting — particularly Foursquare, which recently crossed 2 million users and landed a substantial round of venture capital financing — it’s easy to lose sight of the fact that most people have never used them, and in many cases may not even realize that they exist. That’s the main takeaway from a Forrester Research report on the sector, which found that less than 5 percent of U.S. online users have ever used a location-based application on a mobile device. And not only were most respondents not using such services, but almost 85 percent said that they were not familiar with location-based apps at all.

The Forrester report also found that those who use apps such as Foursquare, Gowalla and Loopt are almost overwhelmingly young men: close to 80 percent of those who use such apps are male, and almost 70 percent are between the ages of 19 and 35. Only 5 percent of those over the age of 55 said they had ever used a location-based service, and zero percent over the age of 65. The average user of such an app was substantially younger than the U.S. average, with a higher income and more likely to be college educated.

The point for marketers, Forrester analyst Melissa Parrish said, is that location-based services are still highly niche applications, and they target a group that is overwhelmingly young and male – although the analyst also noted that this group tends to also be made up of “influencers,” or those whom others look to for recommendations on products and services. And Forrester said that the market for location is still fragmented into multiple segments, making it even less attractive as a marketing platform.

Interactive marketers see the potential of a technology that connects people with places and points of sale, but they also see the reality of a fragmented technology (and thus consumer) landscape. The social location world is littered with dozens of apps that connect people and places in unique ways but also segment users into app silos.

In another interesting data point from the survey, Forrester’s research found that even those who said they use location-based services don’t do so on a very active basis — only one percent of users post an update more than once a week. That suggests market leader Foursquare needs to work on the way it creates incentives for users to check in with the service, something Om discussed with co-founder and CEO Dennis Crowley in a recent interview. Crowley said that the startup was working on new features that it hoped would increase its appeal. Meanwhile, Facebook is also working on location features, which may include a partnership with Foursquare and other services.

Related content from GigaOM Pro (sub req’d): Is Geolocation a Real Business or Just a Feature?

Post and thumbnail photos courtesy of Flickr user schatz

  1. [...] new report from Forrester should pour some cold water on the massive hype around the supposed mainstream [...]

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  2. I seem to remember a crotchety Forrest report with nearly identical tone and number about Facebook, circa 2006.

    “…no one but a tiny handful of nerdy college kids has ever heard of Facebook, so don’t use it, don’t develop for it, it’s not worth your time…oh, and get off my lawn!”

    Reference
    http://gigaom.com/2010/07/21/facebook-officially-passes-the-half-a-billion-user-mark/

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  3. Great article. Metrics are critically important and really the only thing that will tell us if LBS matters or if it doesn’t. So far, people are making a lot of bets but the reality just isn’t quite there today.

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  4. Very interesting, means the upside for location based apps are huge

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  5. FACT: Most people have never heard of Forrester Research

    (I was also going to point out the Facebook facts but @Todd got there first ;)

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    1. I think you and Todd make a good point, Leigh — and every new service or network has probably suffered from the same early-adopter profile. Some made it past that to broader acceptance, but just as many or more did not :-)

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  6. Funny you mention this. I pitched a location-based marketing campaign to a client and they thought it the idea was ‘too early for its time’. That was 3 months ago..

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  7. I can remember trying to get businesses to buy their websites.
    “I’d never be so stupid”
    Was the usual reply…. when they just could not see the upside. One of my team at the time in Telecoms bought Prada.co.uk and still has it, still makes me smile to this day !

    There’s massive upside in location based media, I’m sure we’re all OK with that, especially with those statistics and in the knowledge that we’ll be exploiting those opportunities ahead of the wave.

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  8. I agree about the early-adopter syndrome – but I stopped badmouthing Forrester after they predicted the dot-com bust spot on – and I ignored them.

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  9. [...] Als Grundgesamtheit gibt Forrester alle US-Internetnutzer an, das Resultat ist für diese Gruppe also repräsentativ. Der Report kostet 499 Dollar, aber GigaOm hat die wichtigste Erkenntnis der Untersuchung veröffentlicht: [...]

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  10. it doesn’t take a non-gamer/businessman too long hanging out at MyTowne, Gowaldo or Foosquaw to realize these apps are not for them.

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