Death of a Smartphone, Birth of an Ad Trend

December 1, 2010  - By
Kevin Dennehy

Kevin Dennehy

From a distance, the Garmin-Asus partnership to produce GPS-enabled smartphones looked pretty good — particularly during the market erosion for portable navigation devices. However, published reports indicate that the companies will not renew their partnership in January 2011.

Switzerland-based Garmin and its Dutch competitor TomTom have seen steeply declining sales for personal navigation devices (PNDs) since the high point of the market two years ago, industry observers say.

“[The Garmin-Asus divorce] was predictable. The product didn’t sell very well and no partnership can survive forever if there’s no revenue coming,” said Marc Prioleau, Technology Growth Advisors principal. “The smartphone market is incredibly competitive and navigation is a pretty standard feature. So you’ve got small revenues, limited differentiation…not much to build a long-term partnership around.”

Since the Garmin-Asus strategic alliance in February 2009, the companies said they have developed and marketed six devices. These products are available through carrier and retail channels in several countries. One of the phones, the Garmin-Asus A10, a touchscreen smartphone running on the Android platform, is optimized for pedestrian navigation.

Location-Based Advertising. TeleNav, which now has 17 million subscribers, recently launched a navigation-based mobile advertising platform that allows businesses to place a sponsored listing at the top of the search results located in its mobile navigation applications. The company says users can click on a sponsored listing to receive additional information such as coupons or menu information.

The user can call, map, or receive turn-by-turn directions to the business — all of which are actions TeleNav measures and reports as metrics to advertisers. Sounds like an interesting concept — but are carriers committing to it?

“We see location-based advertising (LBA) as a natural and important extension of our business. As an industry, I feel that we are only at the tip of the iceberg on advertising within the intersection of location and mobile,” said Ky Tang, TeleNav director of marketing. “This is new for us and for the industry as a whole. While it’s difficult to speak on behalf of a carrier, in general, I’d say that they too see a significant opportunity here.”

TeleNav released data saying which brands are winning the battle for the attention of the mobile consumer. Through analyzing keyword searches of millions of its mobile users, the company is able to identify where consumers are looking to go while on the road.

“We do not in any way, shape, or form provide user-specific information to our advertisers,” Tang said. “We only provide aggregate information of how our users are engaging with their ads within our application. So in addition to the traditional impressions and clicks, we let advertisers know how many people conducted a ‘drive to’ to a specific business.”

Tang said that, in regard to the company’s data analysis, it does provide aggregate data on what users are searching for when using the application. “We believe that this type of information is insightful for brands to really understand how users who are on the go remember and prefer certain brands over others,” he said. “For those whose brand equity isn’t as strong — as measured by how often our users search for their specific name — we give them the ability to promote their brand to the top of the list. One of the implications behind this is that in the mobile, location-based arena, perhaps there’s an opportunity for more brand equality.”

While it remains to be seen whether the LBA space is close to seeing rapid growth, some advertising agencies are taking notice. “Some leading, innovative ad agencies see it and get it right away. But by and large, there’s still a lot of education that is required in this space,” Tang said. “Location-based advertising is very powerful and we see it to represent the next major wave of digital advertising. But in the same way that it took online advertising some time to blossom and become more mainstream, we see the same thing here for location-based advertising.”

This article is tagged with , , and posted in Mobile, Opinions

About the Author:

Kevin Dennehy is GPS World’s editor for location-based services, writing a monthly column for the LBS Insider newsletter. Dennehy has been writing about the location industry for more than 20 years. He covered GPS and location technology for Global Positioning & Navigation News for seven years. His articles on the wireless industry have been published in both consumer and trade magazines and newspapers.

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