IWNY – The Future of Location Based Services

Localization-based services have become more popular as GPS-equipped smart phones have become more prevalent.  This means that the future of internet media will depend largely on the Future of Location Based Services, which is also the subject of a forum hosted by the Future of Local Media during Internet Week NY.

Phil Thomas DiGiulio, the founder of Future of Local Media, opened the event by introducing representatives of three start-ups for rapid-fire presentations (LoKast, Postling, and MobileMeteor).  In the spirit of the hosts, each was focused on local businesses.  After the completion of the presentations, Phil introduced a panel of speakers to discuss how location-based marketing would begin to affect how marketers work.  As location-based services become more mainstream, more industries are becoming concerned with the mantra of “location, location, location.”

The panel was moderated by Erick Schonfeld, co-editor of TechCrunch.  Geo-location technologies have been a topic of interest to TechCrunch and have become “a layer of interest for mobile apps.”  The question becomes how do you monetize this, and how do you pick what services to use?  What is the geo-location opportunity?

Ian Spalter, Executive Creative Director of Mobile & Emerging Platforms at R/GA, believes that this opportunity forces brands to consider not only how they are relevant to a consumer’s life, but when and where they are relevant.  Mark Ghuneim, CEO of WiredSet/Trendrr, encourages brands to enable an experience for a customer.  The value to the marketer is the emergence of the real-place web.  Whereas the real-time web gave marketers an understanding of how consumers interacted online, the real-place web offers an understanding of how people live their lives on the move.

Mark started a discussion on how businesses can try to “own” the experience by referencing Starbuck’s current promotion for Foursquare mayors.  Ian Schafer, CEO of Deep Focus, noted that the information that companies gain from these digital loyalty programs becomes more and more useful only as the market grows and the amount of data becomes significant.  Joshua Karp, Digital Media Manager at PepsiCo, added that Pepsi is also looking at how to use geo-location to offer promotions for PepsiCo products (similar to how it is now using a partnership with StickyBits to offer consumers the opportunity to communicate and collaborate in a crowd-sourced marketing campaign.)

Mike Schneider, VP of the Director Digital Incubator at Allen & Gerritsen, discussed the challenge of combining data streams.  A so-called “holy grail” for CPG would be to be able to track both intent and location of consumers. In response to an audience member’s question, Ian Schafer noted that countries where consumers are more comfortable with using mobile devices to make purchases enjoy a greater opportunity to gain an understanding of the consumers’ “purchasing path”, predicting intent from behavior.  Mike also described the challenge of resources that services like Foursquare face in implementing promotions.  Until companies can get enough people focused on this area, the ROI of such activities is likely to be misunderstood.

Erick asked whether it was unnatural to “check-in” to a brand.  Mark likened it to when you “Like” an item on Facebook.  Ian Schafer noted that brands don’t need to use a specific service (e.g., Foursquare) when they can use simple APIs or latitude/longitude information to run their own scavenger hunts and the like.

Mark brought up the importance of geographical and demographical relevance in the success of geo-location.  Walking cities like New York lend themselves to success for programs like Foursquare, while seeing where your friends checked in across town in Los Angeles is largely a moot point (or at least one with which people can’t interact well.)  The usefulness in rural areas, obviously, falls even further.

Ian Schafer and Ian Spalter both believe that CRM is critical to the future of geo-location, whether it’s just coupons or a full-scaled “Minority Report” Gap scenario.  Ian Spalter responded to Erick’s privacy concerns by noting that many consumers will trade privacy for convenience.  Mark brought up the value of user experience and how the ephemeral opportunities (the opportunity, for example, to meet with a long-lost friend for fifteen minutes) pay the cost of lost privacy.

The key, according to a questioner who worked at PepsiCo (n.b., who I found out the following day was Bonin Bough, the Global Director of Digital and Social Media at PepsiCo, a good man to meet in the social media space!), is for large brands to drive consumer behavior in order to make it a natural occurrence.  Erick argued against this point, claiming that people check-in to interact with friends, not to get coupons (something similar to Dennis Crowley’s stance on the topic.)  Mike believes that people check-in to see what happens next, a point that Joshua reinforced by describing Foursquare users’ interest in badges.

To provide value, Mark summarized, location must have value in and of itself, whether it’s a Foursquare-style virtual reward, or just the location tag on a photo or video.  Ian Schafer believes that the game aspect of check-ins will fade, so value must be inherent.  “We have to get why we’re doing it altogether”, Mark explained.

Ian Spalter brought the conversation back to scale, noting that brands with brick and mortar bases cannot make a major impact on their total sales activities through their geo-location activities until there are a significant number of consumers who are utilizing those services.  In other words, “things don’t get culturally interesting until they get technologically boring.”

The last audience question was what a small local business owner should do to leverage location.  Panelists recommended that businesses should focus on efficiency.  Businesses can leverage the popularity of nearby businesses (e.g., posting a nearby special on a more popular business’ Foursquare profile), simplifying the experience for the user, or rewarding the consumer for broadcasting promotional information.  Businesses need to talk to the people who are frequently checking into their business to see to whom they are talking.  Erick describes these consumers as the brand ambassadors of these small businesses.

If you want to follow more thoughts from the audience members to the panel, check out the #futureoflocal hash tag on Twitter.  The feed was projected on a side screen during the panel, and it continued to be active the whole time!

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