Source: Financial Chronicle
Mobile or location-based advertising (LBA) is a new form of advertising that integrates advertising with different mobile technologies. LBA uses different types of tracking to pinpoint consumers’ location and provide location-specific advertisements on their devices. Perhaps, LBA is today’s most personal and direct marketing channel that allows marketers to reach a specific target audience: Marketers can create campaigns aimed at specific age, gender, income and lifestyle segments.
However, the fact that LBA is so personal can be its both strength and weakness. Many consumers are concerned about LBA’s invasion of privacy and the risk of being monitored.
LBA services refer to applications that use knowledge of geographical position of a mobile device to provide services based on that. Such services include navigation assistance, identification in cases of emergency or disaster relief, social networking through finding friends, and map assistance through location points of interest.
Suppose you are in New York and have no idea where to dine. In that case, location-based restaurant ads could come in handy. Yelp, a location-based food app, is a great example.
According to Sheila Buckley, senior vice-president for national digital sales at The Weather Channel in the US, LBA companies such as Dodgeball, Foursquare, Gowalla, and Google Latitude promise to connect users to their friends with a game element that encourages participation.
In September 2010, Pew noted that LBA was still an early-adopter activity used by 4 per cent of the population. These sorts of services took a giant leap forward when Facebook turned on location sharing in August, 2010. However, there is no report on how many of Facebook’s mobile users are engaging in it. Actual usage numbers are tough to come by as these companies typically report how many people downloaded the app – rather than the frequency of usage of an app. The latest public data for Foursquare shows 7 million people have ever downloaded the app and that 40 per cent of their users were outside the US.
LBA services have the potential to associate lifestyle habits, behaviours and movements with a consumer’s personal identity. Says Sheila Buckley, “Understandably, as a female, I am not sure I would want my entire Facebook network to know my precise location.” In fact, it seems many other women agree – all reports examining the phenomenon of social-location sharing – from Pew to Nielsen to comScore – note a distinct male bias in usage.
According to Darren Yan, assistant VP for consumer banking group at DBS Bank, privacy issues surrounding LBA can be separated into two main categories: location tracking and unanticipated incoming messages. By tracking location over time historical location data is collected and stored in databases; this information may enable advertisers to deliver helpful, location-specific information to wireless users. However, this information also enables a service provider to build a very detailed and invasive dossier of wireless user’s travel patterns, movements and other personal habits.
Secondly, incoming messages would be used to send advertising messages to wireless user supposedly at the right place to make the message relevant, which could also be very intrusive if such advertising is unanticipated by the user.
In India, the second largest wireless network in the world with more than 260 million wireless subscribers, LBA provisions are still in a very nascent stage. According to Sumit Kale, chief economist at Indicus Analytics, work towards LBA in India started in 2006 when BSNL signed up US-based firm Telenity to provide 14 LBA services to its customers. These services include real-time fleet and asset management, friend finder alerts for subscribers, mobile yellow pages and tourist information on places of interest.
Some of these services were launched in 2007 and the fleet and asset management solution has picked up an impressive customer base with companies like Mahindra & Mahindra, Hindustan Lever, Chetak Logistics and others showing interest.
In parallel, Airtel launched its enterprise LBS solution with Indian firm Mobiance, with a much wider and more versatile set of LBA services. These include tracking fleet, mobile workforce management, directing consumers to retail stores, enabling brand managers to track representatives across rural India, providing search and navigation abilities to customers, and aiding governments in transmitting knowledge in the time of a natural disaster and public unrest.
However, important point in the way of adoption of LBA in India is the traditional Indian lifestyle which is unique from the western world. The success of LBA services in the US and EU has been due to the high car density and these cars are self-driven. In major cities, there is one car for every two people. However, in India cars are generally owned by only higher income households (there is a ratio of one car for every 250 people), and the popular use of chauffeurs in such families reduces the need for personal LBA-based navigation devices.
LBA technology is set to become the new norm in the coming years. Location has so much power in mobile, and marketers who use it responsibly will certainly increase the effectiveness of their connection with consumer. A marketer might want to position oneself and take advantage of this emerging field in the future. And remember, LBA is one worm that you will want to be early enough to get!