Where are you right now?: Location-based services gain popularity

As the internet is made mobile, it is also becoming local. Location-based services like Foursquare, Gowalla, Latitude by Google, and the German service Friendticker are getting widespread attention. Once again, location-based services are being viewed as the next evolutionary stage of the internet and the predecessor of social networks. The difference between location-based services and their forerunners is that these services make use of increasingly-sophisticated mobile networks, connecting the world wide web with the real world.

Jana Lipovski, Consultant Goldmedia

The basic principle is the same for all providers. With the help of relatively-simple software programmes and GPS-capable mobile phones, users of Foursquare and similar services can post their current locations. They can tag bars, restaurants, shops, and other places and offer recommendations and reviews, all while contacting friends. At the same time, the user can see tips provided already by others and which places or friends are nearby.

An Eldorado for the advertisement industry? Perhaps. Location-based services are considered a very promising application for the mobile internet, offering the concrete possibility of profiting from mobile internet. The services allow the connection of a potential customer’s actual location with concrete offers and advertisement info directly at the point of sale. Marketers have long dreamed of such advertisement, which reaches the right customer in the right place. But tremendous planning costs lie ahead for targeted, local advertisement.

Still, these start-up difficulties haven’t deterred the trendsetters. The fashion, club, and restaurant scenes are most keen on profiting from the connection of the online and offline realms. The first to use the new possibilities for interaction are major brands like Diesel. The jeans brand recently sent a special offer to the mobile phones of all Foursquare users who had “checked in” in the vicinity of their flagship store in New York. Unlike many other social networks, applications like Foursquare have succeeded not only in gaining users, but also in earning money with their services and user data.

The growth rate of Foursquare, a start up founded in 2009, is impressive. At the start of May 2010, the company announced the 40-millionth check in via Twitter. Five weeks early, there were only half as many. About 15,000 new users join the service every day, according to Foursquare. With about a million users, the start up doesn’t come anywhere near to the size of industry giant Facebook, but recent buy-up offers from big players like Yahoo and Microsoft show how attractive the concept seems to be. Other networks are also already planning their own location apps. Both Germany’s Qype and seemingly-almighty Facebook announced a partnership with McDonald’s related to location-based services.

The propellant of these services is the increasing penetration of GPS-capable smart phones. Germany is no exception, where their number is also rising. According to BITKOM reports, about every fifth mobile phone user already had a smart phone in 2009, allowing the user to post his or her current location at any time. Like its German counterpart Friendticker, Foursquare incentivises users to post their location as often as possible with different fun features. For checking in at restaurants, bars, and other places, users can collect points, win badges, or be elected “mayor.”

It’s no surprise that these services have caught the attention of user and data protection advocates. The flip side of location sharing is that when a user checks in at a bar, it confirms that he’s not in another location, at home. This fact was picked up on by PleaseRobMe.com in a very charming way. “Raising awareness about oversharing” is the stated goal of the website, which is targeted to would-be thieves. Check ins published on Foursquare and Twitter are aggregated on the site. A live stream, sorted by name and area, could be viewed. When users checked in at another location, apartments were described as “recent empty homes” and “new opportunities.”

The providers themselves placate critics by saying the users have full control of their data and the on/off button. “Where are you right now?” could become the question of 2010, at least for internet enthusiasts.

Author: Jana Lipovski, Consultant Goldmedia GmbH

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