The 2nd Wave of Location-Based Services

By Jason Dempsey

Though still in its infancy, location-based service (LBS) applications have experienced tremendous growth. Now that we’re seeing more rapid adoption, we expect the environment to change and start to show new innovations as services begin to mature. Let’s look at where the next wave of LBS applications is going this year.

Beyond the Check-In

As the market evolves, companies that offer location services will need to look for new ways to beef up their offerings beyond the check-in and fulfill more mainstream roles. While we all love checking in and sharing info, users will tire of the many steps that now exist (think about the many questions on if you want to share, where you want to share, associated confirmations, and on and on). The “check-in” as a popular concept in LBS will be in for some serious changes in 2011 as consumers look for more convenient, private, and rewarding ways to declare where they are.

Better Deals integration: Facebook has intimately linked its Places offering with Deals. The service is a natural extension of its local marketing initiatives – small, medium, and large businesses can all benefit from linking their company’s Facebook page to a physical location on Facebook Places. Business owners can then use the combination of Places and Deals to increase foot traffic. Facebook Places check-ins have also become a focus of the Sponsored Stories ad units. Brands can have friends’ likes and Places check-ins turned into small ads that show up next to a user’s newsfeed. For example, if someone’s friend check in at Starbucks on Facebook Places, he would see that check-in called out alongside the other Facebook ad units.

Social recommendation engine: Expect growth in conversations around places. People do not just want to share that they’ve been somewhere, they also want to share what they think about it. Foursquare’s Tips feature makes it easy for people to leave behind tips about a location like what to eat, what not to eat, and what to do. Other apps will follow and extend this content from a supporting role to a key component of the experience.

Users will also start extending recommendations to other places outside of the current location. For Google, this means making robust updates to its suite of location apps. Google has already rolled out updates to make its Latitude and Places products more appealing to everyday consumers, such as Google Places’ HotPot, a location recommendation tool that is fueled by Netflix-like ratings of locations and a social recommendation system based on places friends have liked. Yelp has started using Facebook’s Open Graph API to make social recommendations based on reviews Facebook friends have posted.

Specialty Services

Another big evolution will be LBS apps focusing on utility or specialty services with location at their core.

  • Droplat creates location-based virtual storage: users have a virtual drive that follows them around from location to location, and each location has its own drive filled with files others have left behind. The service is small but shows how location can add a new twist to file sharing.
  • Tasker, a robust location app for Android, can automate a phone’s entire behavior based on the location it is in. Users can set the phone to automatically switch to silent when entering the office, turn the volume up when entering a loud workspace, turn off 3G, and switch to Wi-Fi when entering one’s home.
  • Broadcastr, a startup, links locations to audio stories. One of the first projects on the service is a series of audio stories about the World Trade Center that people can access when they’re close to where towers stood. Broadcastr’s service shows how location-based media can add context for people who want to learn more about a location.

Privacy Concerns

Privacy will remain a major issue for many consumers, regardless of all the whizz-bang awesomeness that these location-based services offer. Microsoft’s LBS research found that just over 50 percent of consumers are “very concerned” about their identities being stolen via LBS. Just as job hunters have grown to protect their Facebook activity from the eyes of human resources and recruiters, the pitfalls of over-sharing one’s locations with friends and colleagues is also a concern. Smart startups and marketers must take data security and privacy seriously and will not abuse consumer trust.

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