mobilisms.com

December 16, 2009

As noted in a previous Mobilisms blog post, location-based services (or LBSs, for short) has become one of the new buzzwords in the mobile space.  So, one of the first official things that our new Mobilisms team decided to do is test a sampling of these applications ourselves as a kind of mini-experiment. By taking it out for a spin and kicking the tires a little, we would find out what potential these apps had to offer.

The Fab Four

In order to get the best experience, our team decided to focus on four of the leading LBSs currently in use.  We tested Loopt, Brightkite, Foursquare and Gowalla, as these four applications have garnered the most attention surrounding LBSs.

Loopt

Loopt first hit the market and quickly gained popularity due to its prominence in Apple’s iPhone television commercials. The application’s initial functionality was based on meeting other random people through its “Mix” feature. Early adopters criticized this functionality since it leant itself to booty calls (or at least the random hookup) rather than social networking (for business or for pleasure). Hearing the people’s feedback, Loopt spun off this functionality into a different application that is no longer part of the main Loopt application.

The good:

• Longevity – as the first well-known LBS, Loopt carries equity in its name
• Supported on over 100 mobile devices
• Ability to upload and comment on photos
• Ability to export list of check-ins to a journal list or RSS feed for insertion into a blog or RSS reader
• Integrated Zagat and Citysearch listings with some locations

The bad:

• Faces stiff competition in newer competitors in crowded category
• No reward for checking in at a certain number of locations

Brightkite

Brightkite emerged soon after Loopt with a promising two million monthly active users worldwide. Brightkite’s easy-to-use interface meant users quickly adopted the application with little down time.

Brightkite suffered some negative coverage online recently stemming from an article in the Los Angeles Times written by Marc Milian where CEO Jonathon Linner called his positioning strategy for the service “the ladies’ night approach,” in which “things were done in their system in order to make it more inviting to women,” which would in turn, attract men to the network.

These remarks (among others which included an inappropriate off-the-cuff remark regarding younger females that was later clarified by the reporter) were not received well by the Internet community, and when some users began to voice their opinions on the service, their accounts were terminated without cause.  Brightkite issued a mea culpa on its blog, but what long-term effects this will have on the service remains to be seen.

The good:

• Revised interface with greater usability with version 2.0 update
• Ability to upload and comment on images
• Good exporting to social networks like Facebook and Twitter

Asymmetrical network design, users not required to follow back in order to receive updates like Twitter

The bad:

• Some technical issues, upgrade to version 2.0 left service down for 3-4 days

Foursquare

Foursquare – the App Store’s “it app”— combines LBS with a competitive game where users earn points, gain badges, and become “mayors” of locations just for checking into the application. Foursquare develops local/mobile connections between people and their favorite places of business—which in turn benefits small businesses willing to participate on Foursquare. Some bars give away “free beer for mayors” if users check in frequently to a certain location.

The good:

• Fast adoption rate by users (150,000 users as of December 2009)
• High level of engagement by users due to its game-like structure
• Open API for third party developers to create programs and websites using Foursquare’s data set
• Reward system incentivizes users to explore new spots and visit familiar spots more often
• Becoming “mayor” of a site can drive visitors to that location

The bad:

• Inability to upload images or comment on check-ins except through shouts
• Instructions on how to receive each badge are ambiguous unless you go looking for them elsewhere (like online)
• Check-ins do not require you to physically be at that particular location, which can lead to fraud in acquiring check-ins and points/rewards
• Check-ins available only in major cities – not everywhere

Gowalla

Gowalla—the newest LBS on the block—has the most informal and kid-like look but is set to make huge gains in popularity. With emphasis on collecting items from spots, Gowalla looks to build a community rather than create competition among users.  Recently, Gowalla acquired $8.4 million in Series B venture capital funding and has also added other Internet entrepreneurs such as Digg’s Kevin Rose, Mahalo.com’s Jason Calacanis and former Google head of special initiatives Chris Sacca to its list of investors as well.

The good:

• GPS verification ensures where users are checking into sites
• More casual than other LBSs, but not too “cartoony”
• Items and vault concept could be monetized by branding items (pick up a Nike shoe, etc.)

The bad:

• Not many users at this time (only 50,000 as of December 2009)
• No uploading of images
• User customization of application is limited to creating spots only – trips are created by the Gowalla team, you can suggest trips, but not create your own
• Can only import friends from Facebook and Twitter, no available options to import friends via phone number or address book

You can find a comparison chart of features here: LBS Comparison Chart

Thoughts and Implications for Marketers:

According to ABI Research in 2008, location-based services will generate over $3 billion in revenue by 2013.  This means that for the immediate future, LBSs will continue to grow and marketers will be incorporating them into their annual planning.  Location-based networks allow the social network to truly become “social,” and could actually increase the amount of real world interaction rather than just online.  By being able to reach consumers via their mobile phone and these networks, advertisers can reach new levels of personalization and targeting through their social interactions.  At the moment, early adopting local businesses are reaping fringe benefits of directly connecting with their target audiences while being the “cool kids” of the marketing world. But marketers must view LBS as the missing link between consumer purchases and marketing campaigns—LBS will help measure ROI.

However, even with a booming LBS playing field, uncertainty looms for the future as Facebook stands poised to redefine everything. The world’s largest social network recently changed their privacy policy to allow for location-based features and seems positioned to launch into the LBS race. Close your eyes—well maybe not—and imagine if Facebook offered LBS. Alerts and advertising would be geo-targeted to your locations, your preferences, and advertising you’ve been exposed to online. Any purchase—or interesting advertising—could be shared with friends and spread beyond the “pay per click.”

If Facebook does implement geo-location features, perhaps the future in location-based services lies in niche markets (and with niche businesses with loyal patrons).  By tailoring service toward a specific group of users/consumers, LBS networks can survive against a Facebook onslaught. Yelp and Urbanspoon—which both focus on local retail establishments and restaurants—have earned their spots within consumers’ hearts by emphasizing the local and facilitating user-generated feedback.

Overall—LBS will continue to organically grow and change American consumers’ perception of social networking, use of mobile devices and potentially purchasing behavior. While Mobilisms dares not to predict the future—we will say to keep your eyes open and pay attention as more consumers engage in their mobile devices within this explosive new mobile offering.

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