Checking In from SXSW: How Location-based Mobile Apps Can Change Retail, Privacy

Emily Reeves

(Editor’s Note: This is the first of a two-part post by guest blogger Emily Reeves on location-based apps like Foursquare and Gowalla, which have become the latest buzz in social media. Reeves attended the recent South-by-Southwest interactive conference in Austin, Texas, and is sharing what she learned about location-based apps here. You can read part II here.)

An Introduction to Location-Based Services

The buzz at this year’s South by Southwest (SXSW) interactive conference and festival — the conference for emerging technology — was all about location-based services, which are relatively new applications in the social media space. In fact, there were eight sessions over the five-day festival where location-based applications were discussed.

FourSquare, one of the largest of these services, actually celebrated its first anniversary during SXSW 2010. Another app, Gowalla, which launched in 2009, really picked up steam at SXSW this year (it helps that the firm is headquartered in Austin).

Because these services and applications are still fairly new to the mass-market population, there have been many questions about these location-based services. In this post today and tomorrow, I’ll answer them:
•    What are location-based services?
•    Why would anyone want to tell everyone exactly where he or she is?
•    Are there safety and security concerns if I broadcast that I am not at home?
•    What is this game aspect?
•    Why would a business be interested in these services?
•    Will the mass-market population adopt this like they adopted Twitter?
•    More specifically, will Arkansans adopt these services?

We get started, after the jump!

What are Location-based Services?
Location-based applications are services that allow the user to update his or her status (much like Twitter or Facebook), but attach a very specific location to that update, either with a dot on a map, a longitude and latitude reading, or a location defined and named by the users (a restaurant, retail location, ballroom at a convention center, etc.). Popular applications include FourSquare, Gowalla, Loopt and Google Latitude. All of these services have mobile applications, as without mobility, location becomes irrelevant.

Why Would Anyone Want to Tell Everyone Exactly Where He or She Is?
Announcing location can have several benefits:
•    Finding where your friends are (and going there).
•    Finding where your friends have been (to know if it is worth going there).
•    Reaping rewards from businesses that play the games (i.e., discounts for frequent check-ins).
•    Predictive technology (yet to be developed, but is already being imagined).

Users want the information and they have the technology in their hands to share the information. To emphasize the demand and opportunity for location-based services, a startling statistic was revealed at SXSW: about 55 percent of all text/SMS messages sent are some variation of “Where are you?” That equates to almost 650 billion location-based service text messages in 2009.

To further demonstrate the potential, it was revealed that of the 200 million mobile subscribers in the United States, 18.5 percent are smart phones with built-in technology for geo-location. SXSW panelists predicted that in three to four years everyone with a smart phone will use location-based applications because location is what makes mobility fundamentally different.

By defining the location, we are creating a database for future reference of that location. We are giving those locations more meaning by being able to walk into that location at a later date and know not only who has been there before, but also what they did there and what they thought about that location.

The social power of location-based applications is in knowing where friends have been, not only in where they are right now.

The yet-to-be-developed predictive technology services lead the mind to Minority Report-like uses. According to a recent Ad Age article

“It’s the ad served while you are reading the news in the morning on an e-reader that knows you’re at home and three blocks from a Starbucks. It’s a loyalty program on your phone that, through a hotel-room sensor, sets the lights and thermostat and turns the TV to CNN when you walk in the door. It’s finding a restaurant in a strange city on a Tuesday night, discovering that a store nearby stocks the TV you’re looking for, or that a certain grocery on the way home has the cut of meat you need.”

Tomorrow, Part II
Come back on Thursday, and we’ll talk about privacy, location-based games, how retailers award users and the prospects for wider adoption of the technology.

(Emily Reeves is director of account management and research at Stone Ward of Little Rock, an advertising, marketing and public relations firm. You can find her on Twitter @Reeves501 and e-mail her here. She blogs regularly at MsAdverthinker.com.)

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