Posted September 9, 2010 11:58 am by with 2 comments

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Aided by the introduction recently of Facebook’s Place pages (so original on that name, huh?) location based services are getting a lot of attention. As the word spreads among the mobile smart phone base there is a lot of room for growth and advertisers are taking heed by speaking with their money and not just in blog posts.

ReadWriteWeb tells us

“It’s huge and it’s increasing,” said Michael Becker, a director at the Mobile Marketing Association. “Location is going to play an increasingly critical role in enabling successful consumer engagement through and with the mobile phone.”

For advertisers, the growth of real-time location data felt like an explosion that “blew up overnight,” Becker said.

Now let’s be honest here. What else is the director of the industry association supposed to say? Where the real proof of concept lies is with the advertisers and those location based services that are herding these nomadic consumers. It appears as if they are doing business together and that is the real indicator of success. Words are hype, cold hard cash changing hands is success.

Big name advertisers seem to be throwing money at location-based services. Brightkite is reportedlycharging between $10,000 and $20,000 for local promotions. Foursquare seems to be announcing a new A-list corporate partner every week, including Starbucks and MTV. And Shopkick, the treasure hunt of consumption, launched with Best Buy, Macy’s and American Eagle among its sponsors – which had to install special audio transmitters in all their participating stores just so the app will know when a user walks in.

The RWW article goes on and asks a great question as to whether the ‘newness’ factor is driving all of this interest. To his credit Becker of the Mobile Marketing Association gave the right answer in my opinion.

Newness may be inflating the numbers a bit, Becker acknowledged, but advertisers will just create more engaging and sophisticated ads as time goes on.

“Location is not necessarily the goal of the interaction. Rather, location is a piece of information that provides context to the user experience and can create a more relevant and engaging interaction with the consumer,” Becker said.

As tempting as it may be to start to throw around numbers concerning market potential I think it is more prudent to look at the behavior of people with regard to mobile interaction rather than the potential. Honestly, the potential is only going to be as big as the behavior allows so it might be best to concentrate on first things first.

When I am in this kind of mode I look at how I do things first then imagine how that behavior would differ based on other demographic information like gender, age, income etc etc.

I am expecting my new DroidX in the mail tomorrow so I know that it will get a workout and location based services are the first on my list. Why? Because this type of advertising and those that are engaged in it are driven, for the most part, by discounts and specials. Based on the new austerity movement that is gaining traction in this country, any way that one can get a deal is something that will get attention. It’s that simple.

So where do you stand on the geo-location and advertising combination? Is it more hype than sustainable reality or is it the true next wave? Be sure to “check in” in our comment section. No discounts or deals today but one never knows, do one?

  • Cynthia

    I saw a start-up yesterday (can’t remember the name, sorry. .anyone?) that pays people for checkins as long as they perform a certain behavior. For example, they get .25 if they tweet a picture of themselves eating ice cream at their local Dairy Queen. I’m assuming that the Dairy Queen manager is paying a percentage of the kick back in order to be listed.

    It’s kind of like the burger shop I wrote about yesterday, asking people to take a behavior they do anyway (tweet pics of themselves) for their profit (kickback from website) and the advertiser gets the benefit. I think it could work.

  • I think even though the hype/usage on location based services increases, people are smart enough to recognize whether it is a necessary or not. So I think if advertisers concentrate more on attracting mobile users they may get only visitors rather real customers! What do you think?