Aim Proximity Location Based Services Whitepaper

LOCATION BASED SERVICESPrepared by Keith Pinney

ALIGNED TO BBDO WORLDWIDE

Location Based Services


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For some, it might be hard (or impossible) to cast your mind back to 1979, even more difficult to remember the TPS-L2, or as it later became known in 20th century parlance; the ‘Walkman’.

From that moment in time, and well before the concept and ubiquity of the home computer (much less the portable PC or mobile phone), a dizzying array of devices surged into the public conscience and onto and into the heads of tens of millions of people all over the globe.

Music had moved quite literally out of the pubs, clubs, bedrooms and living rooms and for many, the soundtracks to their lives were created, edited, compiled and shared around on the (now not so) portable media formerly known as the ‘compact cassette’. Later superseded by the Compact Disc, Mini Discs and the rest as they say is history.

Indeed many people would have first heard the term ‘Home Computer’ while listening to Kraftwerk’s 1981 electronic masterpiece LP (Long Player for those not

of that generation), ‘Computer World’, portending a future where we would be forever tethered to technology and data. All while wandering around town or sitting on the subway.

(Interesting to note that much of the lyrical content centered around the privacy of information and how it would be shared)

One could argue that this was the first real moment in history where people and technology were connected to content they could control on the move (bar the car radio), and at a price most could end up affording.

Today, that unit has now been universally replaced by our new best friend the portable digital music player along with a plethora of other portable devices. Our personal hardware now seamlessly integrates with the internet experience, connecting and sharing content with cameras, video, gaming, TV and hundreds of thousands of applications.

We now indeed seem to be living Kraftwerk’s vision of the anywhere, anytime always connected world in the 21st century, albeit from our pockets.

The impact of this constant connection to content, services, networks and each other, whether at home, or wherever we may be, has placed sharp focus on what the potential is for our beloved handsets. And it is very much, just the beginning.

In a recent report published by Morgan Stanley, there is an interesting insight that states we are entering the ‘5th Cycle of computing’, that of the mobile internet which points to the enormous upswing in app usage and content consumption.

This is clearly reflected in leading markets with a high adoption of smart phone technology and with increasingly cheaper access to greater bandwidth.

In fact, when compared to regular ‘feature phone’ shipments, in North America at least, Smart phone sales look set to eclipse these regular handsets in 2011.

Add to that the fact that 550 million of these GPS enabled devices are forecast to be sold around the world by 2012, and it’s not hard to see there is a very interesting story emerging.



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KICK OFFMuch of this initially of course can be attributed to Apple’s introduction of the iPhone in 2007, and the subsequent ‘Techgeist’ of other manufacturers innovating around the model and in every case, looking to improve it.

Rapidly, Google and its Android platform are looking to assail this position. Most recently stating the objective of entering the music distribution marketplace, Apple’s hallowed ground. Watch that space in the coming months, as this will be sure to be a mobile play.

Interestingly enough, even in Japan where it can’t be disputed the birth of the mobile internet truly had it’s genesis with NTT’s DoCoMo in 1999, Apple handsets have taken almost no time in establishing a prominent position (although in 4th place at the time of writing with handset sales behind other Japanese manufacturers).

So, when you add the ability of these handsets (and the rapidly emerging ‘tablet world’) to handle the delivery of a vast galaxy of up to the second content, services and personal networking, to the increasing trend of Telcos offering flat packet rates.

You have the backbone of why location based services are fast becoming the latest, greatest story in this space.

It is also very much linked to the desire by networks to grow ARPU and where there will be sure to be a new battleground as we head toward 4G and beyond.

In essence then, a new context has emerged for advertisers, marketers, content creators, business owners, visitors or just simple bystanders all linked to the real and virtual worlds, on the go.

Some notable pundits have called Location Based Services the ‘Epicenter’ of mobile innovation, so here goes.



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Commerce Utility

Community

Key to the success and adoption of location based services, is the accuracy and relevance of Geo Data and ultimately the accuracy of location determination (LD), for a user to a specific service.

Access to that data (and it’s currency) therefore defines how well a service can interact within that space and deliver salient up to the second information.

We’ll look at the 3 areas in the developed markets that make up the current offering to users and marketers and how the landscape is moving and converging quicker than with what developers can dream up.

NEO GEO

The 3 Lenses

The Geo Spot



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GEO TAGGING:

Geo tagging is described as the process of adding geographical metadata to media where it can be accessed by a handset.

Or, a little more simply the capability for businesses, content owners, creators and users to place information, comment or deliver offers at a specific place and time.

Although currently much of these actions tend to be more like pins on a map, or made up of ‘badges or mayors’ based on checking in, increasingly with the advent of AR (Augmented Reality), the capability for these ‘points’ to be rich in information is fast approaching. Targeted not only to broad offers, but increasingly specific and detailed content shared peer to peer(s).

The interoperability between various platforms will be key to seeing this become a more powerful socially enabled action, ‘sharing’ the location and aggregating these datapoints, and ultimately creating a virtual ‘crumb-trail’ for others to follow, exchange and interact with.

Many of the players in this space, are still relatively small and leverage other services to promote and enable this function, Twitter on the other hand

although now mainstream, became location ‘aware’ in November 2009. Recently acquiring ‘Mixer Labs’ which they will almost certainly utilise to build out their own location driven applications.

Powerful stuff when combined, especially when considering their current 16 million strong business database and the ability to include media layers to enhance this offering.

Additionally, whilst the powerhouses of Google and Microsoft have extraordinary mapping services, the likelihood is they may seek to further acquire existing complimentary businesses such as Loopt to augment their Geo offerings. A good example of this being Google’s recent interest in Yelp, something that could enhance both their Latitude (formerly ‘Dodgeball’) and Place Pages products.

Geo tagging is also progressively becoming more automated. This will increase the frequency users add locations to their social data, inflate the volume of locality related information and create new opportunities for services that collect, sort and share location based content.



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With the potential offered up by Geo Tagging allied to the enormous projected proliferation of smart, GPS enable handsets, the future on a mobile social scale for users and advertisers looks decidedly bright.

Increasingly, with cross-platform operability, aggregators such as Tweetdeck, Facebook and Wikitude allow users to shuffle between multiple services and jack these into their Geo-Coded location. Sharing content, experiences, data and dialogue seamlessly across these networks.

The potential for brands and marketers to then be placed at the heart of these conversations opens up huge opportunity to create transactional offers or messages. Enabling brands, retailers and businesses to take part precisely at the right time and right place.

The fact that the massive and growing domination of social giant Facebook (in certain countries at least) constitutes 400M+ people with over 160M of these accessing their profile via their handset. It seems very clear that social networks and their instant appeal have a big future in the LBS ecosystem.

Personal location based updates will be as common as changing status and could well develop into one of the most valuable aspects of the social networking universe. As long as marketers understand the responsibility associated with this information and the Telcos continue to play nicely. After all, it is still their infrastructure that provides the backbone of these services to the handset.

GEO NETWORKING:



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So, with all these billions of pieces of metadata, what to do with it?

As with any technical application into the ‘real world’, there has to be a layer or interface that helps connect the relevancy of ‘data’ to the user.

We are no longer sitting behind a captive, fixed screen environment, seated and immobile. Instead, we draw the data to us, accessing in our own time and space, created as a sort of personalized digital ‘vector’.

So, the impact of this is that there is a greater need for the saliency of information and what a location

has to offer to the user. Whether it be content, offers, rewards or simply ‘tips’.

Location-based social networking (or dubbed ‘lo so’) currently forms the best lens to be able to take this data and apply it into a commercial context that resonates with users and businesses alike.

So, looking briefly at some of the current crop there are some clear commonalities across the offering. As this space emerges we can more than likely expect some consolidation as these morph into larger platforms and networks.

GEO TARGETING



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LBS IN MOTION: A SNAPSHOT OF 3 PLAYERSfoursquare:

Like many of the currently dominant location based services, foursquare’s offering is based upon interaction within a social context at a space and point in time. Users either add existing foursquare members to their network, or invite others to join and participate.

They are able to view the locations and activities of others within their network and contribute content, read reviews or absorb tips placed at registered venues by other foursquare users. In terms of cross-functionality, this content has the capacity to be pushed to other social ecosystems such as

Twitter and Facebook.

A system of rewards serves as the incentive for using the application and by ‘checking in’, status is attained in the form of badges being accumulated by visitors. Actions such as frequently checking into multiple venues in one day, or a single venue on multiple occasions reward the most active with ‘Mayoral status’ in the form of a badge.

As of March 2010 foursquare was the largest of all location-based services, with over 1.3M users worldwide, and steadily growing.



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LBS IN MOTION: A SNAPSHOT OF 3 PLAYERSBrightkite:

Established in 2007, Brightkite allows users to connect with existing friends and meet new Brightkite users based on the places they visit. Users may check in using SMS, Email, Mobile browser or iPhone, Android and Blackberry mobile apps.

Whilst Brightkite has avoided employing social gaming principles like points, leaderboards and rewards, it has embraced traditional social pastimes such as group conversations and the publishing of images against locations for other users to view and comment on.



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LBS IN MOTION: A SNAPSHOT OF 3 PLAYERSGowalla:

Gowalla is ostensibly based on the same principles as foursquare however there are slight differences. The application itself has a greater focus on design and usability, with emphasis on the application tonally feeling more like a game than a pure social networking tool.

Users have a Gowalla ‘passport’, in which stamps are awarded every time a new venue is checked

into. Items can be collected at certain venues, such as a margarita at a Mexican restaurant or a tour bus at a concert. Items collected replace those previously collected.

Being slightly more egalitarian, Mayorship cannot be obtained at venues, replaced instead by a top 10 list for the most frequent visitors.



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PLATFORMS

Existing social platforms like Twitter and Facebook have succeeded in part thanks to the early publication of an API (Application Programming Interface) for third party developers to consume data and create new utility for the respective communities.

Foursquare, Gowalla and Brightkite all support account sign up using Facebook and possess the ability to publish into Facebook and Twitter. This has no doubt helped accelerate adoption and raised awareness of these new platforms in such a rapid timeframe.

Brightkite and Foursquare both have rich, arguably well-documented APIs. Gowalla has a read-only API, which rather limits the creativity of third party developers. It may come as no surprise then, that foursquare has roughly five times the amount of developers registered in their Developer Google Group than Gowalla.

More and more third party apps are beginning to appear. Yipit analyses your foursquare check in history, then monitors those venues for offers. Layar, the augmented reality browser, can reveal who the mayor is, who’s currently checked in and what tips lay in wait for you when you point your handset in the direction of a Foursquare venue.

Perhaps the most interesting development using all three of these location based services platforms is the release of check.in. Built entirely in HTML5 by Brightkite, check.in aggregates place data from Foursquare, Gowalla, and Brightkite to provide a much richer location data set. Based on user account settings, check.in has the ability to publish into multiple social networking platforms.

However, whilst foursquare, Gowalla and Brightkite fight amongst themselves for the title of Location Based Services ‘Champion of the World’, they face stiff competition from the established players, well entrenched with their desktop and mobile services and with significantly greater populations.

As indicated earlier, Twitter entered the “Place Race” in late 2009 and Facebook are now rumoured to be imminently launching their own native LBS capability.

Both of these networks boast user numbers in the 100’s of millions and a fair number of these users already use mobile apps to share content with their friends when out and about. Enhancing these networks to be location capable is merely an upgrade away.



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THE IMPLICATIONS OF GEOGRAPHYIt’s no surprise that many of the start-ups and businesses in LBS are headquartered in cities with significant conurbation in the United States, Asia and Europe.

Take Four Square, headquartered in Manhattan for example. With a city based almost entirely on a grid system, largely flat (with one or 2 minor inclines) and very much a ‘walking’ city, you have a perfect virtual/physical ecosystem for services that can attract users and businesses alike. Offering the potential to be virtually present on every street corner. From Delis and Diners, to Dry Cleaners.

Even the name Four Square very much reflects the cities spatial characteristics.

In this sense the media overlay seems very logical and the ability to navigate as such, simpler. Largely attributable to these topographical traits being mirrored in the break up of neighborhoods based on what they offer to the ‘walker/browser’.

Factors such as commercial density and physical land attributes very much play a part in defining what services create the best fit for inhabitants or visitors. Remembering we are of course blurring the boundaries between the real and virtual environments and therefore, there should be a simple and elegant match as to how these worlds interlock through a superimposed interface.

In all metropolitan environments there are different areas of intensity. Whether they be socially driven (pubs, restaurants, bars and the like), dwellings or business hubs. Increasingly there is a trend toward vast vertical developments and building clusters offering mixed usage. Including of course, residential.

These areas are where high population and traffic provide the bases for complex interactions where content can be created, fed and exchanged.

It’s no surprise it is also where traditional media tends to cost the most.

Conversely. If we take a look at a city not reliant on dense and sophisticated public transport hubs with geographic sprawl and where much of personal transportation is by car. You naturally have less of a place where people walk. A different set of conditions then might apply. Los Angeles or Auckland would examples of this.

Again, marketers and advertisers should be cogniscent of to whom it is they are trying to connect with, and by what means and point in time this contact will have the greatest effect and resonance.



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GRAB A SLICEA fitting example of the differences might be 2 pizza restaurants offering specials on a slice of Pizza. One on Bleeker Street in Manhattan and the other in a mall in Reseda, CA.

Both share one trait, in that their street array is set in grids, but that is where the comparison ends.

With the vast numbers of commuters in New York, using high frequency public transport, walking or cabbing, the city is very much about numerous and frequent shorter journeys between points and neighborhoods.

Individuals in general are walking past large numbers of separate businesses in a single day. Due in part of course to urban density and the compactness of the location in terms of physical area. The chance for ‘drop in’ traffic for example then is high. Particularly if the offer of that discount pizza slice occurs as you are walking past or in the near vicinity around mealtime (especially if you are identified as a regular). The business thereby, creates virtual occassionality with its customers.

In the instance of a more suburban environment, which may represented by longer stretches of arterial roadway with distance to convergence points being greater, you will often find clusters of businesses or hubs such as malls or business parks for example. Much of the ‘traffic’ therefore is vehicular.

The timing of offers and the draw to a location may therefore be less frequent and more suited to be a planned experience for potential shoppers. The occasion may be centered around managing a visit to a location for multiple reasons.

To that point, that location may be well serviced by having clusters of businesses link or aggregate their respective offerings, in order to maximize ‘dwell time’. This thereby creating the opportunity to have multiple transactions or interactions in one locale, or framed up all under the one roof.



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COMMERCIAL APPLICATIONS

Still staying on the fast food tip.

Let’s have a quick look at the McDonald’s digital coupon mobile service in Japan. A truly ubiquitous and mass-market application specific to a localized mobile Ecosystem

This is particularly interesting due to the structure of a joint venture between the fast food giant and NTT’s DoCoMo; an abbreviation of “do communications over the mobile network” and also from the phrase ‘dokodemo’, meaning everywhere in Japanese.

DoCoMo is the largest mobile operator in Japan closely followed by KDDI’s ‘AU’ and Softbank, who interestingly are to date the only carrier supporting the iPhone in Japan.

Leveraging the vast network of McDonald’s retail footprint and the love of coupons, users register themselves to the service and are sent up to the minute specials based preference and location specific data.

Coupon redemption can be via simply showing the coupon on screen at point of sale or by simply passing the RF enabled handset over the integrated iD scanner (as below).

This not only facilitates an update on your profile activity and redemption to the database, it also facilitates cashless payment and sets up the next offer to be sent to the user.

With nearly 80% of handsets all RF enabled in Japan, increasingly these near field capabilities are anchored to promotions driven around specific locations.

A simple mechanic to illustrate this is releasing coupons at around the time schools get out, and where there is proximity of that school to an outlet.

The ability to resist that temptation just got a little harder for some.

The difference here is in the way the Telco has embedded a service into a mass outlet presence. It hasn’t tapped into a social ecosystem such as Mixi, the largest SNS in Japan (much loved on mobile), but rather a bespoke offering around POS and location services augmented by handset capabilities.



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PRIVACY AND CULTURAL IMPLICATIONSSo, if we are all increasingly mobile, dwelling in greater numbers in urban centres and letting friends, very distant cousins and the world know exactly where we are at any given moment in time, how secure is this personal data and what degrees of control are available to us, the end user?

Simply put, much of that will depend where you are and under what laws the network you are tied to operates within.

Ironically, in Japan which has increasingly implemented almost impenetrable privacy laws to protect the consumer. The Government enacted a policy in 2007 that states that any phones bought on new plans from that date would have their handset’s GPS chips permanently enabled. This was stated to be in the interests of ‘Law Enforcement’.

As probably still the most advanced mobile marketing enabled economy, Japan and its 109 Million handsets still have roughly only 2% of adspend applicable to the mobile space as of 2009. This still represented a growth of 60% from the previous year and double the global numbers for that period.

Interestingly, while millions globally are happy to share information over the PC centric web, operators and advertisers are not sure what levels of tolerance users will have regarding the monitoring and sharing of their location based activity from both a personal and commercial standpoint.

From the early adopters view and for those now reared in the era of the social web, the concept of privacy and personal content differs greatly to many from the preceding Geny Y or X’ers. For many others, as was the case with e-commerce, familiarization and trust could well take a little longer.

Four Square, although relatively young, has around 1.3M users and is the largest of the LBS providers at this time. Quite a small number when you think of the global scale of Facebook’s dominion.

But despite the size of their ‘digital continent’ with a massive population of over 400M+, they are still not granted access to China’s over 1 billion souls. China along with many other countries who have their own well established social networks have strongly integrated cultural and local attributes that have created a firm foothold that will be hard to shake. This notwithstanding governmental controls that are also imposed in many states.

This is especially evident in the mobile sphere where in certain countries it is quite normal to be pushed advertisers messages and offers when users are in proximity of an advertisers message or offer. As indicated little earlier, this kind of conduct would be illegal in certain countries in the APAC region incurring heavy penalties unless adhering to strict guidelines.

For many the thought of allowing brands that close may be too close for comfort, essentially viewed as ‘people tracking’.



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PRIVACY AND CULTURAL IMPLICATIONS CONT..

It is this safeguarding of privacy that has to date, remained firmly in the hands of the Telcos.

Application developers o n the other hand (some merely months old as start ups), have the clear responsibility of adhering to the principles of user notice and consent. Being acutely aware also of the differences from market to market, ensuring users know how and to whom their location information is to be disclosed.

To further highlight just how quickly this domain is evolving, at the time of writing the iPhone ‘iOS4’ has recently been released. Interestingly (if not slightly concerning), the new terms and conditions regarding location information highlight what is clearly Apple’s next play.

They state they have the right to “collect, use and share precise [your gadget’s] real time geographic location”.

Whilst Apple have been using location information gathering for a while, the difference here is that by

consenting to accept the upgrade license, you are giving Apple the license to both store and share that information with 3rd parties.

This kind of information has usually been only available from networks to the emergency services in times of crime, or crisis. It begs the question where AT&T is in all of this.

So, the ongoing question of privacy will need to be anchored to degrees of transparency. Essentially, what you as the individual are prepared to give up for these services in terms of how, where and to with whom your location and personal details may be shared with. Doing this with the trust that those who hold onto it (often in perpetuity), will do so responsibly.

When you consider the speed and dynamics of the M& A space in this sector, it is fair to say that who has your information today, may not necessarily be the company who uses it tomorrow.



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THE 4TH DIMENSION: AR IS THE NEW VRSo, where to next?

Probably the most interesting and creative interpretation of Location Based Services is the advent of interpretive augmented reality.

Applications such as Layar or Acrossair, combine multiple functions of Smartphones into a visual overlay, that has been referred to as ‘Terminator Vision’.

These applications blur the lines between the virtual and non-virtual spaces, combining the video/camera functions, GPS, and accelerometers. Many view this convergence as the truest expression of LBS.

In essence, It’s a real time merging of two parallel universes. The cybersphere with the biosphere.

Science Fiction? Maybe 3 years ago. But if we look at how rapidly this integration of a few simple handset features has taken shape, it does seem that the marveled sequences in certain movies just 5 years ago are now fast becoming the domain of anyone who buys a new smart handset.

We are indeed entering the era of the ‘Geoweb’ or ‘V-Sphere’.

Virtual Reality essentially provided us with a world that was tangible in a visual and spatial sense, but largely based on fantasy. What we have with Augmented Reality is the real world practical application of vision, experience and information

at a human level, overlaid with real time data into a system that is both sensory and participatory.

Sekai Camera (or world camera) is an application from Tokyo based Tonchidot.

It is similar in many ways to Mobilizy’s ‘Wikitude’, but takes the concept of cross-networking between businesses and individuals to a level that might strike the right balance of how the social, virtual and commercial layers harmoniously converge.

Although still in Beta stage, there is a logical and personal way that metadata attaches itself to a specific location and encourages exchange within the app.

The concept here is that visitors, brands and businesses literally ‘Air Tag’ these spaces. So as an example, a restaurant may leave its location data, directions, menus, reviews and specials of the day. A previous visitor or patron can leave their comments in text or voice or upload images or video of their experience.

The application of this in the sense of a traveler turning up in a new city for the 1st time on the recommendation of a peer, could turn up and have their friends experience left for them in rich detail. A sort of rich, virtual Lonely Planet.

The restaurant, being aware of this exchange, could leave coupons or offers for that person to take up there and then.



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Taking that to another highly creative expression is iButterfly. Created by Behemoth (no pun intended) agency Dentsu.

By loading the app, maps depict active locations and by simply holding the camera up, ‘virtual butterflies’ float around, which you need to swipe at and ‘catch’. Each butterfly collected may contain a different offer, which can then be redeemed at

the location you are in.

Again, a simple, elegant and highly creative use of 3 core functions of the handset.

This is still in trial, but clearly illuminates the potential for rich creative territory for marketers and advertisers alike.

THE 4th DIMENSION: AR IS THE NEW VR CONT..



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WRAP UPA great many of the readers of this piece will already be active users of some, or many of the services we have covered briefly here.

The key question for many however, will be what are the real and practical applications for brands, agencies and marketers when it comes to activating the potential of the LBS ecosystem.

The truth is, we are very much at the gates to a new frontier if we indeed believe this is the ‘5th cycle of computing’. Many of the services in play today will evolve and innovate independently, or in turn be acquired by the ‘bigger fish’ to form part of a wider service offering.

Moreover, as every service sits on a small but increasingly powerful piece of hardware, it remains to be seen where handset innovation will lead and drive how these services may evolve and expand their influence. Initially for the end user and then importantly, how these platforms move from making connections, to actual monetization for brands and businesses.

There are a few key points to be considered when looking at how LBS can integrate into marketing activities. Not surprisingly these resonate with the traditional social media tenets of finding an audience (or a voice), and tapping into the potential for dialogue, collaboration and exchange.

Consider the kind of targeting that will mix well with the platform offering and ensure that the tone and creative approach matches the technology, interface and user/audience expectation

Assess and tap into the utility and community aspects of what the service provides to the user. Why are they there? These applications are essentially ‘enablers’ so getting in the

way of these core functions might not work to advantage if perceived as interruptive

As devices are proliferating and evolving, there will increasingly be new hardware to consider.With this in mind also, the functionality of these services will need to continually adapt. It’s important to think of how any integration will fit the experience, no matter what their handset capabilities are

Think of the physical landscape. How this overlays with the objectives of the activity and what the user will respond to based on the social and geographic attributes in each location

Plan for and understand the privacy implications dependent on the service and what parameters and legislation may be in place. As indicated, dependent on where you are, there may be significant differences in how this is managed and how you would then plan activity around compliancy. Mitigate any risk to the business objectives and the user

So, whilst we have a uniquely fresh take on the role of the handset and a very interesting potential future with a vast global audience. It is still a nascent era for mobile marketing and LBS. It remains to be seen how marketers can prosper from what has been established as a beachhead from these start-ups and their early adopters.

One thing however is certain. It is one of the most interesting plays in the digital space when combined with the almost exponential growth of mobile social networking, and will be sure to be among the most hotly contested for dominance in the coming 12 to 18 months.

Watch that space.

Prepared by Keith Pinney, Channel Planning Director, AIM Proximity, Auckland

With assistance from Ian Hulme and Tenzin Pooch.


Technology

Aim Proximity Location Based Services Whitepaper