Location, Location, Location - Infographic

Location, location, location - this is the most known marketing phrase ever, but it's as well the most true marketing phrase ever! Now in the era of location-aware devices and networks, where people, emotions and content is spatially identifiable it is even more true. Kissmetrics created nice infographic summarizing how one can use location for marketing purposes broadly describing it as geo-marketing. 

Well... I would argue if it's a correct definition of geo-marketing that is historically linked to advanced spatial analysis with GIS tools but lets forget about science and enjoy this cool infographic.

CLICK ON THE PIC TO SEE FULL INFOGRAPHIC

source: Kissmetrics

User Motivations and Behavioural Patterns on Foursquare

Why people broadcast their location?

Foursquare and other Location Sharing Services (or Location Based Social Networks) have been used for marketing purposes from the begging of their existence. In order to investigate what value does those networks bring to marketers we need to understand what is the user’s motivation for location sharing. Well of course each of us knows why we broadcast our location to friends, but until its proved by science these are only personal impressions.

In the paper published in 2011 "I'm the mayor of my house: examining why people use Foursquare" Janne Lindqvist have investigated the topic. The quantitative survey with 219 participants revealed several motivators for participants that can have some relevance for marketers:

• Gaming, fun, badges – the most perceived value seems to be linked with the element of gaming, collecting points and badges contributes to the perceived fun of Foursquare.
• Social connection – interacting with friends seems to have a big value for users. The most important aspects are: knowing where the friends are and keeping in touch with them and checking-in to the same places and the same time. The social aspect of Foursquare is very important here, majority of participants claim that Foursquare is fun because their friends are using it.
• Place discovery – majority of users have discovered a new places or where motivated to go to new places because of Foursquare. Most participants where pleased with tips about venues that they have seen on the service. The discounts offered by venues were not that important for users – less than half of them addressed it as a motivation.

Where? When? How often?

The other significant issue is linked with the question: where when and how often do people check-in?  The same research displays on a figure below  frequency of check-ins for various places.

From the bar charts one can observe that restaurants and bars are the most popular places to check-in at even several times a week, which seems to prove the social and place discovery usage model of Foursquare. From the other hand participants hardly ever check-in at schools and homes, which might be caused by privacy concerns. There is a small group of users that are willing to share their home location and a bigger one that share work location even more than once a day. The survey showed that there are people who are interested in gaining as many points, badges, and mayorships as possible, and check-in everywhere.

The other reseach  by Cheng in 2011 investigated patterns from more than 22 million check-ins globally. Generated from the data tag cloud of the most popular venues that users check-in shows

that the most popular places are restaurants, coffee shops, stores, airports, and other venues reflecting daily activity (e.g. fitness, pubs, church). The result seems to prove several points from the previous paper presented. Cheng researched as well the temporal distribution of check-ins in the World:

 

This pattern provides a glimpse into the global daily activity intensity. One can observe there three major peaks: one around 9am, one around 12pm, and one around 6pm. 

Conclusions

The end purpose of social media is not to simply push out a message through yet another channel, but to deliver a message in a way that is both compelling and shareable, and that the recipients will want to share with their network. Marketers using Location Sharing Services must look at ways in which they can provide an interactive experience in-store that leverage the technology in the pocket of their visitors—an experience that will convert them from browsers to buyers and from one-time customers to loyal fans who act as advocates in both the real and virtual worlds. You will not do it with a simple discounts, the study proved the gaming and social aspect is more important. Discounts - yes, but make them more valueble and let customers be more engaged to get them. They will come back for more. Social-gamification - this seems to be the key to success. 

This Week in Location Based Marketing – Episode 57

"This Week in Location Based Marketing" is a weekly video podcast from the Location Based Marketing Association and Untether.tv by Rob Woodbridge and Asif Khan.

In the episode # 57 aired on December 26th, 2011 they're discussing:

Show highlights:
1. Brightkite shuts down service, to, er, rethink, yeah, that’s it.
2. Tennent‘s Beer parters with JiWire in Scotland
3. DDR launches ValuText powered by PlaceCast
4. Layar releases Stiktu for consumers
5. Hallmark Channel brings QR codes to TV

Product of the Week:
Zaarly: With special guest Eric Koester

Funding News:
1. Citysourced closes 1.33M Series A
2. LocationLabs buys Seeker Wireless
3. Tracks gets $1M seed round



source: LBMA

Types of Location Based Marketing

Marketers have many choices to location enable a campaign based on campaign objectives. In most of the cases Location Based Marketing campaigns are leveraging Location Based Social Media but besides that there are several different ways to promote the product or service making use of location and mobile device:

1. Location Based Social Media:  

Presence in Location Based Social Media including services like Foursquare, Facebook Places or Twitter gives possibility for a two-way communication  and direct contact with the customer. 

2. Check-in Based Contests and Games:  

Reward the user (typically with discounts or coupons) for visiting retailer locations and “checking in”. LBS  are used to verify that the consumer was at or near the retailer location at the time the consumer is checking in.

3. Geo-targeted Text and Display Advertising:  

The paid placement of a promotion or sponsorship message within mobile media that is integrated with LBS. Two types of targeting are common: 

a. User Targeting: 

Advertisers who wish to only reach users in a certain geographic area can use this type of targeting. 

b. Message Targeting: 

Presenting a different message to users based on their location. 

4. Embedded Icons:  

(Sponsored embedded advertising) the sponsorship deals can be map-embedded or on-the-page/in-app. Sponsored embedded advertising that displays without a search term but is based on end-user's interests and/or brand affinity. Icons or logos displayed in maps or augmented reality to help user determine relevant proximity/location.

5. Local Search Advertising:  

Advertising for listings of local merchant retailers. For example, CitySearch, Dex, YellowPages all fit in this category. Generally these campaigns will include some form of user targeting to show listings only to users in  a relevant geographic area. 

6. Location Triggered Notifications:  

Uses proximity information (Wi-Fi, Bluetooth, GPS or Network-based) to provide App Alerts or Messaging based on user preferences and opt-ins. These services can be automated (vs. requiring a check-in or app) and can run on both smart and feature phones. Once opted-in, alerts are delivered whenever a consumer is nearby a store, and can be tailored to a specific location (e.g. incorporating address or directions) and an offer specific to that nearby store.  

7. Location Branded Application:  

The usage of LBS technology to enhance brand-owned mobile media services. Media brands are the most ardent supporters of these apps. 

8. Click-to-X Routing:  

Routing either calls, data from broad campaigns to local call centers or localized information. For example a nationwide auto dealer might use LBS to route calls from a nationwide click-to-call campaign to the nearest  local auto dealer based upon the consumer’s precise location. 

source: Mobile Marketing Association

Podcast: Best Practices on Creating a Successful Location Based Marketing Campaign

Today I found this interesting podcast from Inbound Now with a guest Aaron Strout - co-author of Location Based Marketing For Dummies. It's really worth watching:

source: inboundnow.tv

What can we learn from LBS market forecasts?

This year I've seen release of several LBS market reports and forecasts: 

- Berg Insight

- Pyramid Research

- Strategy Analytics

- IE Market Research Corporation
- ABI Research

and other... of course like most of market reports they are massively expensive for an individual (starting from  €1500) but each of the companies provides more or less detailed summary, so:

What can we learn from them?

First of all that if there are so many new LBS market reports it means that there is the demand for it.  If companies are investigating the industry it probably means that they want to enter it. The market of location-based social networks (4SQ, Gowalla, FB Places, Twitter), and of GPS navigation is already saturated but there is an increasing need for a local search, local information, local news, local entertainment... consumers are getting spatially aware and so is the web. Significant part of web content is already geo-tagged. In fact some scientists say that web 3.0 is not semantic... Web 3.0 is spatial. 

But let's get back to the numbers. Most of disclosed data is pretty limited but it is possible to derive some knowlegde out of it.

Pyramid Research

Pyramid Research apart from its report has published video on the company's youtube channel that reveals some useful information.

We can see here that according to Pyramid Research B2C LBS market will grow from around $2.9 bn to $10.4 bn. Until 2012 the biggest growth driver will be navigation but from 2013 advertising will start bringing the highest revenues. The report highlights that sales of major GPS navigation providers like TomTom or Garmin is flattening. The competition in this sector is really intense especially when Google and Nokia are changing the business model from payment to advertising-funded. This is shifting revenue stream from navigation pool into advertising pool. We can see as well huge predicted growth in mobile advertising (from around $4 bn to $18 bn) and from the first graph it can be estimated that location-based marketing will account for around $6.5 bn out of it.
Moreover we can learn that smartphone will be the major navigation device and by 2015 dedicated PNDs will be account for less than 10% of the market and their sales is actually already declining. GPS enabled mobile phones penetration is forecast to achieve almost 100% in US due to E911 regulation  and in Europe this number will be close to 50% which is as well promising from LBS industry perspective.

ABI Research

ABI Research forecasts that US location-based analytics market is set to overcome privacy concerns and grow to reach $9bn in value (not revenues!!!) by 2016. It is very optimistic prediction but in fact it's probable as the analytics are the core provider of value in location-based advertising. The aggregation and analysis of location information to identify trends will enable new services and more effective advertising. Just to clarify it is important to state here that market value (the market capitalization plus the market value of debt) is something else than market revenues.

IE Market Research Corporation

IE Market Research Corporation - the Canadian-based provider of market intelligence released their 4Q 2011 LBS and GPS market report. The only free information that they provide are: "global market for GPS navigation and location based mobile services to rise to $15.2 billion in 2016, a CAGR (Compound Annual Growth Rate) of 22.7%". First of all by $15.2 bn they mean 'total spend' which is similar to 'revenue'. Than knowing revenues from 2016 and CAGR we can derive that they are predicting 2011 revenues at a level of $5.6 bn. And that would be all...

Thankfully they are revealing some more information in their 2010 report and youtube video. In 2010 they have forecast that the market will rise up tp $13.4 bn in 2014.

Comparing numbers from 2010 and 2011 we can observe that they are much less optimistic this year. In the table on the left I have compared both forecasts based on CAGR. We can see that when assuming stable growth rate, this year report predicts in 2014  $3.2bn less revenues then last year.

In the information revealed from 2010 report we can find again that they are forecasting massive growth of location-based marketing. Nizar Assanie, Vice President at IEMR said: “The future of GPS navigation and location based services is definitely in Location Enabled Search and Advertising. Location Enabled Search and Advertising will see the biggest growth in terms of market spend, growing at a CAGR of 131% over the next five years to reach $5.9 billion in 2014”.



Berg Insight


Berg Insight brings data about the European market. After a little bit of digging on the company's website I was able to find reports about European LBS market from three years in a row.

We can observe that Berg Insight was very optimistic in 2009. The company has forecast that after €214 mln in 2008, the following year will bring around €300 mln and will grow up tp €580 mln in 2014. It was a beginning of LBS not offered by mobile operators in Europe. The adoption of Location Based Social Networks was still very low. In 2010 the report verified over-optimistic predictions from the year before. The found out that in 2009 the LBS revenues were at the level of €220 mln. The market growth was minimal and Berg Insight was significantly wrong, that is why in 2010 the company was cautious and has forecast market to slow down and to reach the level of €420 mln in 2015. The latest report released just couple of day ago seems to prove the predictions. In 2010 the European market achieved €205 mln and is forecast to grow up to €435 mln in 2016. In North America, revenues are forecast to grow from US$ 620 million in 2010 to an estimated US$ 710 million in 2016.

Strategy Analytics


Finally the report of Strategy Analytics that managed to reveal the least number of information of any kind.  The forecast states that consumer and advertiser expenditure on LBS will approach $10 billion by 2016, with search advertising accounting over 50 percent.

Conclusions


What can learn from all those reports?
Knowing the industry we can easily say that the number of LBS users was growing every year. Despite that the revenues were growing very slowly and were significantly overestimated. Why is that? Although LBS are gradually achieving mainstream market acceptance there is still lack of profitable business models to monetize growing number of users. Google, Nokia and popular Location-Based Social Networks like Foursquare or Gowalla accustomed users to free services. To monetize it developers and provider are shifting LBS business models to freemium and ad-funding. There are however still several issues that need to be resolved including user privacy and geo-data pricing.

Advertising as a revenue and market value driver was mentioned in all of the reports. It significant role in the LBS market will start growing in 2012 and will probably reach in total much more than 50% of revenue stream. Parallel there will be whole new market for location-based services and marketing analytics as the companies will have to measure the rate of success of location-based ad campaigns.

From the other hand we can observe that operators are continuing to lose control over location information with the growth of GPS. In 2008 operators gained around 80% of all LBS revenue. Although now they are getting less than 50% of whole revenues the market has grown more than fivefold so they are still better off. The important question for the future is whether operators will use market opportunities to gain a bigger slice of this cake.

Up-date 21 Dec 2011: 
I found another market LBS report from Vision Gain research company:
Location Based Services 2011-2016: Monetising Opportunities and Challenges

New Pew Report - 28% of American adults use mobile and social location-based services.

According to the report published by Pwe Research Center on the 6th of September 2011 28% of American adults use mobile and social location-based services. That number includes all kinds of using location information on the mobile phone including getting directions or recommendations based on location of the user. That result is not surprising knowing that according to the Nielsen in the study made in July 2011 74.6% of Android users have opened the Google Maps app on their smartphone during last month.  What needs to be commented is that in 2011 only 4% of all adults use geosocial services like Foursquare or Gowalla. This means that the number hasn't change from a similar study made by Pew in 2010. Growth of those services might be driven mostly by non-american users. Geo-social services are growing extremely fast especially in Asia.

What is interesting are demographic changes. In August/September 2010 6% of men used geosocial services, while only 3% on women shared their location with others. In 2011 the gender difference is only 1%. Does it mean that women started to be less afraid of publishing their location? It seems so. In my opinion the difference comes from the fact that in August 2010 Facebook has launched it's 'Places' which increased popularity and trust to such a services among women during one year period.

Currently due to several scandals the location tracking technology in mobile devices in under constant intense scrutiny but the fact is that the market of is growing and analysts are pretty optimistic about it as well in Europe. From the report it seems that the investors should concentrate on Location Based (Aware) Services that are providing information more than on Location Based Social Networks. We'll see soon where the market will go.

source: Pew Internet

The location-based analytics market in US is set to overcome privacy concerns and grow to reach $9bn in value by 2016

According to ABI Research - technology market research company - the location-based analytics market in US will reach the $9bn in value by 2016. Currently due to several scandals the location tracking technology in mobile devices in under constant intense scrutiny but ABI but reckons this will not get in the way of the market blossoming in the future.

According to senior analyst Patrick Connolly this temporary debate will not prevent the future success of location-based services, marketing and advertising, all of which will be based on location analytics – the aggregation and analysis of location information to identify trends that will enable new services and more effective advertising.

The firm said that the “real power” of location-based services will come from a combination of analytics and advertising, when consumers can be anonymously targeted through social, geographic, physical and emotional indicators. While the location analytics market is relatively new, it has been evolving for a number of years and has been the major driver for recent location-related acquisitions by the likes of Apple, Google, Nokia, Facebook and Microsoft. Eventually, location will become commoditised and will be treated as just another piece of demographic information. Consequently, location analytics will become the core provider of value in location-based advertising.

source: research-live.com

Zaarly - realtime, local marketplace

Zaarly is a web and mobile service that connects buyers and sellers in a localized market place. In other words it links people who want to buy something with those who want to provide it. Zaarly was officially lunched to the public today. 

Start-up

Zarly is a story of an incredible start-up. The company’s founding team built the prototype for Zaarly in February 2011 at Startup Weekend Los Angeles. The company won this competition, raised 1 mln dollars funding from business angels and investors,  including Ashton Kutcher, Felicis Ventures, Paul Buchheit, Bill Lee, Naval Ravikant and Lightbank and then debuted a test run at SXSW in March, where Zaarly processed over $10,000 in transactions in less than 48 hours.

How does it works?

Basically you post what you’re looking for using mobile application, how much you’re willing to pay for it and how soon you need it (for example "Tickets for a concert in 90 minutes for 100$". Zaarly will then share your request in the local community through the platform, as well as Twitter and Facebook. People or businesses nearby can access and see your request and then anonymously message each other to complete the transaction of delivering the cupcakes you want. Sellers bid for the tasks, and the buyer chooses the best one, with Zaarly connecting the two via an anonymous Twilio-powered phone number. You can use cash or Zaarly’s integrated credit card payment system to pay for the transaction.

What's innovative about it?

It is actually the first time when buyers are in charge of what they want to buy, how much do they want to pay for it and how soon do they want it. So basically it is the first service based on buyer driven model instead of seller driver model. It's an innovating way of approaching the market. It creates new way of looking at a time value of money: How much are you willing to pay for something to be delivered in 5 min versus if' need to wait for it for 3 couple of hours.Time will show if consumers will go for it...

Learn more how Zaarly works:

Presentation of Zaarly on LA Startup Weekend:


source: Techcruch, Zaarly

Geotoko - managing multiple location-based marketing campaigns.

Geotoko is a location based marketing platform using services like Foursquare, Gowalla, Facebook places, Yelp or Twitter to allow brands, business and agencies to create their own branded location-based promotions. Founders of Geotoko realized that managing deals in multiple location-based services might be challenging and by leveraging existing API's, they have created platform that integrates all of them in one. By creating simple self serve tools to create, manage and track promotional campaigns and reward loyal costumers, Geotoko aims to reduce the friction for businesses to get into the growing geo-location trend. 


Geotoko allows to:

• Build Promotions On Multiple Location-Based Platforms – With Geotoko’s easy-to-use campaign wizard, you can create engaging location-based promotions for Foursquare, Facebook Places & Gowalla within minutes.
• Live Visitor Tracking & Heat Map Technology – Get access to powerful real-time location analytics, analyze user check-in behavior and gather competitive intelligence using Geotoko’s Heat Map technology.
• Manage Multiple Locations In One Place – Easily upload and manage thousands of locations on one powerful platform. We’ll automatically match your locations to venues on Foursquare & Facebook Places.

Besides integrating most popular platforms Geotoko provides users with tools to perform analysis of the campaign: real-time analytics to measure your campaign’s performance and ROI, customers’ behavior, and how various locations and services perform. 


Watch a demo of Geotoko:

Watch an interview with Adarsh Pallian - co-founder and CEO of Geotoko:




source: http://geotoko.com/