Will 2010 Finally Be the Year of Location?

50 Comments

For most of the first decade of the new century, we all talked about the emergence of location-based services. These services, leveraging GPS chips, were going to revolutionize the world. I remember hearing numerous pitches that envisioned Starbucks offering coupons when you walked by the store. But the future, it seemed, was taking its own sweet time, with the LBS dream constantly being deferred. Fast-forward to today — thanks to new services such as Geodelic, Where and FourSquare, we’re beginning to see that mythical future become an actuality. (Related: our posts on Geodelic, Where)

If 2009 was the year when “geo” became a buzzword and gathered momentum, then 2010 is going to be the year when location-based functionality is going to become commonplace — from mobile apps to consumer devices, even to web services are all going to be geo-enabled. Like me, one man who has been patiently waiting for the future to arrive is Ted Morgan, chief executive of Skyhook Wireless, a Boston-based company that provides location-based service as an infrastructure. His company keeps close tabs on the location ecosystem. (Related: “The Dawning Age of Social Navigation“)

Last week when we were chatting about the industry, Morgan pointed out that he was “surprised how many people were talking about location.” That’s a polite way to say that location finally got buzzy. Or maybe that’s how it seems to me, given that I have been writing about location for nearly a decade. Morgan pointed out that slowly and surely, location has “become part of the mobile nervous system.” (Related: “State of Location Apps“)

Agreed! I think that’s why I’m confounded by some of the offerings of startups that have cropped up. Ask any of the mobile industry insiders and they all say that enhanced location and location-related APIs will become core offerings of major platforms — be it iPhone, Android, BlackBerry or the web. Twitter’s decision to buy Mixer Labs, parent company of GeoAPI, is one such example. (Related: “Who Will Foster the Great Location API?)

Today we “check in” to places, but soon it will become part of the platform, and when that happens we’ll shift focus to applications and services that build upon the concept of checking in. Imagine using the Flixster app in a movie theater, which automatically checks you in when you watch “Avatar” at the IMAX Theater in San Francisco and then offers a 140-character review. Or an UrbanSpoon app that automatically checks you in at the greasy spoon of your choice.

As Morgan explained — we’re going through a phase in the mobile ecosystem where folks are getting excited about location-specific applications. Eventually, all apps will have location-based functionality built in. For now, it seems all the industry is abuzz about apps such as RedLaser, Foursquare and SCVNGR. Investors are happily investing millions of dollars into location-based services such as Gowalla, Outside.in and Hot Potato. (Related: “Why I Love Foursquare” and “Hot Potato Turns Events Into Social Streams“)

Morgan, who in the past has been pretty prescient about location-based services, believes 2010 will see the emergence of two major trends that are going to gain traction in years to come:

  • Location-based ads will become mainstream as advertising and the mobile web become location-aware.
  • Brands will start to use location-based apps to drive sales and marketing efforts.

These two topics were hotly discussed at our Mobilize 09 conference in September. We’ll be keeping you posted about location-related developments as the year unfolds. Both Liz and I are ramping up our coverage of location and mobile apps. If you want to chat with us, drop either one of us an email: om + tips at gigaom dot com or liz + tips at gigaom dot com.

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50 Comments

Cornelius

Great post, I totally agree as a co-founder of a location-based startup from Berlin. Looking one or two years back it was a lot harder to convince people of creating content while on the go and sharing their local knowledge. Now with 4sq or Gowalla convincing everyone to do this, it’s a lot easier for all the startups in this space that location is not just a minor feature (as search was in the beginning before Google).

By the way, today we launched our new Tagcrumbs iPhone application. More about it on our blog: http://bit.ly/tciphone or here the direct link http://tagcrumbs.com/go/iphone Would love to hear some feedback!

Regards,
Cornelius

Brett Glass

If 2010 is the “year of location,” then 2011 will be the year when several innocent people are stalked and harmed via their cell phones and 2012 will be the year of “location privacy.”

onlinehandyman

As a small local business offline as well as on I have been waiting anxiously for this to finally take place. I do see many signs that seem to show that this is the way we will be going, but I still think that there is a lot a lot of work left to do. Even in finding Twitter followers I have to go to third party apps that are difficult to navigate and leave much to be desired. I like this post, I hope 2010 is the year, but I don’t think that we are ready to arrive quite yet at the promised land. Look for 2010 to get us closer and further down the road – how much nobody knows!

ScottD

I think you’re right that this is the year of location, and I suspect lbs ads will be seen more and more.

We have about six iPhone Apps for magazines where people can find the products in the magazine and click either “find nearby” or “buy online”. Even with north of a million active users, about 17x more people click “find nearby”. The conversion to purchase is much higher too (5.1% for nearby stores vs 0.5% for online). I think this speaks volumes for the potential of LBS ads.

The killer LBS ad won’t be “you’re walking by Starbucks”. It’s going to be “you’re already in Neiman Marcus, here’s a 50% off coupon that is good for 1 hour to come down to Macy’s”. Think about it!

SD

Sam Gronner

Om, good post and very interesting comments, but let’s imagine:

  1. I don’t need to “check in” because my mobile service provider already knows where I am (after all, I pay them every month)

  2. Because of my trusted relationship, which includes a promise to protect my privacy, I have agreed to accept certain information (OK, let’s call it “sponsored content”) from certain partners of the carrier (“brands” or ad networks) at certain times (time of day, location, online conversations with my social networks contacts), and

  3. In the right contextual situation, these variables, in combination with profile information that my trusted supplier knows about me, could be plotted into a set of metadata that accurately match the criteria of the demographic sought by the sponsor/advertise/brand, and

  4. In return for my opting in, my mobile operator would provide me with offers like discounts, free downloads of content from partner app stores, etc., then

  5. Wouldn’t that make for a win-win business model for mobile advertising? In this scenario, location becomes only one of the many variables for maximizing the opportunity for opt-in mobile marketing, strengthened by the fact that the recipient’s personal identity is protected, yet if the message does elicit a response, it is immediately measurable by the operator.

Full disclosure: My clients Comverse enable such a scenario: http://tinyurl.com/yeqvlav

Chris K

I’m in the wake me up when it gets here crowd.

I don’t think anyone reads advertisements on their phone as I type this.

LB-services strike me mostly as a gimmick right now. …..As in, kool, this program knows where I am and can do some action based on that information. But the usefulness and practicality of such a program or service is another thing.

Curtis

@Om,

I understand what you’re asserting, but disagree that location based services will be a business of any significance. My view is based on several points, but let me first state that LBS will be an important feature set of most applications and services available for use while mobile, but not the core business.

That said, my reasons for disagreeing are as follows;

  1. Underlying GEO data if mature and commoditized. This game is already over.

  2. Global positioning systems market is not only mature, but in a decline as “GPS features sets” are added to devices and applications such as smartphones, Google Maps, Google Navigator, in car audio systems, and the like. This fact is putting extreme downward pressure on the GPS incumbents like Garmin, Tom Tom, Magellan, etc.

  3. All of the LBS services you outline simply package GEO data and GPS capabilities built into said devices, and add social gaming elements. This is not only a tough sell to the mass market, but social networking is sewn up by Facebook. Facebook can package GEO data and GPS capabilities of devices and game over for all the current industry players.

The core problem of LBS services is unique economic value creation, which is a tough problem to solve. I can text my circle of friends, or call them. I don’t need a game or social service which are clearly available today, but offer no unique economic value. Hence, LBS is a feature set that offers limited opportunities for unique economic growth.

My $.02,

Best.

Brian Driggs

I think location information is going to become increasingly useful, but if it’s anything like Foursquare, I’m not particularly interested in seeing it develop.

Would you be interested in hearing every move your friends make in a game of Chess on your Twitter stream? Why, then, is it assumed that we care when you check in or oust so-and-so as “mayor” of some location? This is not useful. This is marginalizing the concept of real, value-added location-based information in my opinion.

Bring on the universal, Google Maps-based GPS system for my vehicle that operates on a high speed WAN globally. Let me plug my device into ANY car and have my preset interests stored. When I am travelling, have this system notify me of potential points of interest based on MY preferences, NOT on proximity to any outfit which had the funds to hire the flashy digital marketing firm.

As was mentioned, such a system should be opt-IN. It should be universal. It should be focused on providing value for the USERS moreso than the businesses. There are no doubt thousands of people interested in this concept for the singular purpose of finding another broadcast channel for the same, marketing garbage they’ve been pushing on TV and radio for years. Those who would dominate in this new frontier are the ones who will approach this from the users’ perspective and seek ways to improve the users’ lives before generating leads and sales.

Interesting read.

Paul E. Ester

It’s not that you click a button and you auto-locate that is revolutionary. What foursquare and other apps are doing is creating a data layer on top of existing real estate. This data is independent of the property owners title or control. Sunglasses that display yelp ratings/other meta data when looking at a storefront can’t be too far off.

The biggest losers are the telcos who have realtime location data and remote capabilities that could provide amazing services if they were allowed to be exploited for anything other than national security/law enforcement purposes.

ronald

The question is why did it take so long. Or have we overcome the barrier to successfully implementing the service.

I think at least one of the problems was/is Battery life. I just don’t want to log into something, just call me to old and distracted with some incomprehensible math problem how the brain augments visual data with timing data to create 3d vision. I want my computer to work for me, I don’t want to work with it. Which requires lots of background processes, like my todo lists should sync up with location and time and calc proximity and available time to provide a service. Don’t provide another stupid ad I will just ignore or write a program to reach me.

So do we have enough CPU cycles(background always on) and battery power to drive smart LBS? Otherwise count me out.

AbhishekB

LBS is not an independent service category but just a feature in most cases. It’s safe to say that most applications will be location aware and mash location data with their native functionality.

2010 might be year when the hype finally dies down and the real usage begins.

Todd

For all my cheerleading of activity streams with a location attribute assigned to them, this post ( and the comments ) make me think the future of LBS is spammy.

“No”, don’t throw coupons at me. I do not want to know viagra is available 2.81 miles from my current location. “Since you are at Whole Foods, why not pick up some Fuzion fruit drink?” is not a welcomed auto DM.

The future of LBS must be opt IN, not opt out, and it needs to meet or exceed the user control high water mark set be Fire Eagle, otherwise it’ll be just more noise.

Jeff Hilimire

First off, when are you going to get disqus as a commenting option on this blog?

Having played with almost all of the services you have listed here, I completely agree with the direction you’re describing. I think what will really kick this off is when the “checking-in” and geo-awareness starts happening automatically. So for ex, I tell Foursquare that anytime I’m in a specific GPS location, it should check me in to Chick-fil-A. Right now the manual process of doing this takes a few minutes and until it becomes more automated it will detract most people.

Declan Metcalfe

Great post Om.

It’s not on anyone’s radar yet but what immediately excites me about mobile is using it to get real time ‘As you pass it’ Ad campaign feedback.

I have this image of a market research respondent sitting on a bus and getting a text as the pass a billboard and being asked what they think of the context, message, visual etc of the ad. That would be valuable data for sure.

Rahul Sonnad

I think that 2010 will be a transformational year for Location Based Services, as they move from a history of niche activities into a widespread web trend. A lot of the smaller companies will evolve from experiments into businesses.

You should also see large experimental budgets on the advertising side. This will be accompanied by a significant evolution in the advertising technologies which will begin to treat location not just as a DMA, but as one of the key contextual variables for a mobile user.

That said, if pressed to answer the question, I’d have to say “No”. In 2010 the iPhone/Android type of device, that really shines on location/Web 2.0 interactivity, will remain a minority market segment. Unlike some web based phenomenon such as Twitter/Facebook that spread like wild fire, the new location services are handicapped by their inability to reach the majority of people.

This should be remedied by 2011, the year in which I think we will see location revolutionize the web. By then, the data networks will be much faster and reliable again (LTE/HSDPA). Location technologies including network assisted GPS and enhanced wifi-tri (google/skyhook) and possibly pressure sensors (for elevation) will start to really accurately pinpoint your device.

With this infrastructure, locational awareness and pervasive mobile broadband will allow a fundamental and profound conflation of the internet and physical reality.

Together this will affect the web in a manner that will combine the consumer impact of Social Networking (i.e. facebook) and the business impact of online CRM (i.e. Salesforce).

I think that’ll be the year of location, and it’s not far off. I expect it’s going to be really fun watching what happens in the market this year on the way there.

Cory O'Brien

I wrote a post recently about the Gowalla/Incase partnership, and in it, I predicted that location-based social networks will be THE space to watch in 2010: http://thefutureofads.com/gowalla-and-incase-team-up-for-location-based-sponsorship

As Gowalla and Foursquare have shown, the checking-in aspect of services like Twitter can easily be turned into a game that adds to the overall experience, and with a few easy tweaks, they can advertise alongside that experience in a non-intrusive way that actually adds to a user’s enjoyment of the service. Add to that the futurist’s dream of geo-located coupons and hyper-advanced loyalty rewards programs, and it’s easy to see why LBS will be a hot topic in the coming year.

Mark Evans

Cory,

Excellent points. Geo-located coupons will really take off this year. Also interesting are apps built on top of services like Foursquare, i.e., photocheck.in….

We will be discussing the opportunities and challenges in the geo-loc space (Geo-Loco!) next month during Social Media Week. Discounts for Foursquare super users.

http://geo-loco.eventbrite.com

Matt

Great post. Given us all a lot to think about. I suspect the first company who decides collect user location data, repackage it and sell it to businesses will become very, very rich indeed. There’s quite a lot of data generated when you start putting users in context of their location that isn’t being used optimally.

Om Malik

I am not sure it was intentional. Sometimes when writing, things just happen and you go with the flow. Appreciate the reminder.

Comments are closed.