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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.
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