More than Navigation: Who Cares Where Starbucks Is?

The location industry is evolving. In the near future we won’t be discussing navigation and mapping as a way of finding the nearest Starbucks. Contextual location driven advertising will start delivering solid revenues, as soon as the market becomes better organized. The value of location information will be magnified as it shifts to the cloud. Vehicle manufacturers will be creating their own rich contextual location information. Near field communication, NFC, with its seat between consumers and cash registers, will provide some of the most valuable location data. These are points all made at last week’s LocNav conference by The Where Business.

Tipping Point. Half of Americans are not using smartphones. Location becomes more interesting when everyone has a smartphone and it reaches a tipping point. Social proximity and location has big benefits. “When everyone has a smartphone, you can connect via wireless mesh,” says Michael Metcalf of Yahoo. “If I’m in a line at JFK for a cab, I can let others know my destination and I can reduce the line and wait by half.” Geo-fencing has been stymied by the battery drain caused by frequent GPS pinging. Wireless mesh technology solves this issue. Another winner in location is near field communications, which works in short range proximity to enable purchases and other activities via smartphones. It creates a valuable database that includes precise location tracking data.

Power to the Automotive OEMs. Unlike the rest of the industry, automotive OEMS won’t need to rely on location integrators or cellular providers to provide them with a driver’s location. With integrated GPS and communications, they are well equipped to understand the context of where drivers are located, what they may be doing, and where they may go next. “In the past, the automotive industry didn’t get a share of the advertising revenue generated in the vehicle by radio, which was usually even installed as OEM equipment. “That will change,” says Lou Brugman of Pioneer Automotive. “In-vehicle infotainment will be adding location-based social networking, which might include automatically sharing your location or estimated time of arrival with specific contacts. The excuse for being stuck in traffic might not work as easily when you’ve actually been lingering over lunch.

Contextual Advertising Road Block. Everyone is talking about contextual location-based advertising, but it is being held back by a complicated eco-system. “There is little conformity. There are open standards and closed standards,” says Chris Peralta of Nokia. “Contextual advertising offerings are operating as separate silos.” Peralta feels that MirrorLink, previously called Terminal Mode, is getting traction. The MirrorLink Consortium is dedicated to cross-industry collaboration in developing global standards and solutions for smartphone and in-vehicle connectivity.

Heard in the Hallways:

“Sensors that use location will change more people’s lives than giving turn-by-turn directions faster. In the future location conferences will have nothing to do with navigation and mapping.”

“Apple required us to add a navigation application for the iPad. We hadn’t even considered that the iPad would be used in a vehicle for navigation.”

“People will accept dirtier data that is cheaper. Mapping that is from a user-generated community will be good enough. There will be some mapping that will sell for a premium for some uses, but map data will be commoditized.”

“In the future, all mobile advertising will be opt-in. It won’t continue an upward trajectory if it doesn’t do otherwise.”

Intelligence in the Cloud. The shift of information to the cloud will have a significant impact to our industry. “The cloud moves localization to a global context,” says Kanwar Chadha of CSR. “In the cloud, it becomes intelligent context and simplifies information that can feed sensors that work on low energy.” It is important to provide the right level of location accuracy for different contexts. For privacy concerns, social networking users don’t want location that is too precise; yet for mobile promotions, the closer the better. Weather can be regional for most common uses although agriculture requires precision. Having the location intelligence in the cloud enables more sensor usage.

Smartphones and Shopping. It sounds redundant, but Google’s research indicates a heavy reliance on smartphones while shopping in brick and mortar stores. A whopping 70 percent of smartphoners use their phones as a shopping aid while inside of a store. Almost 25 percent report researching purchases on a phone, visiting a store to view merchandise, but then buying online. The benefits of mobile advertising are significant. “Hyperlocal advertising has an ROI of about 800 percent,” said Surojit Chatterjee, of Google, “Mobile ad campaigns are seeing 40 percent more calls compared to desktop.”

I will host a free GPS World webinar on Thursday, December 1, with interesting guests.  Details will be provided in November’s Wireless Pulse.