Location based services are making a comeback. And the reason, Peggy Salz says, is because location information and local services are being combined with search
A few years ago mobile phone manufacturers and operators were convinced the advance of location-based services would jumpstart new business models and generate significant revenues for companies up and down the value chain. Today uptake of services centered on location may not be stellar, but consumer acceptance of location-based services ranging from tracking to personal navigation is on the upswing. Wireless research firm Berg Insight, headquartered in Sweden, reckons European mobile operator revenues from location-based services will rise from $180.5 million in 2005 to $780 million by 2010.
Location-based services are making a comeback. The initial excitement about them fizzled out because neither the phones nor the data plans could deliver. What's more, the vision of a service that could push coupons to users as they passed stores and shops was a privacy nightmare, observes Greg Sterling, a senior analyst at Local Mobile Search, an advisory service from Opus Research and Sterling Market Intelligence.
"It was a pipedream, and even if it would have worked in principle, it lacked the context to be more than annoying spam," Sterling says. After all, a coupon for a restaurant is pretty much meaningless unless the service can establish the mobile user is looking for a place to eat. It's an important piece of the location services puzzle that can be provided by mobile search. In Sterling's view mobile search is the ingredient that can turn location-based services into profitable value propositions.
An example of this is NearbyNow, Inc., a company best-known for its online service that allows users to search all products, brands, and sales available at local shopping centers. In December NearbyNow launched a mobile service, extending the company's proximity search capabilities to make participating shopping malls searchable down to every product, brand, and service.
The service lets users find what they want using SMS and – more importantly – enables retailers to target nearby shoppers who happen to be searching specifically for items they have on offer. The outcome is a location-based mobile advertising pitch completely in tune with the user's context. "The mobile search element assures advertisers target users who are clearly in buy-mode and are most likely to appreciate the offers as they are relevant to their original search queries," Sterling explains.
Location information and relevance also enables enhanced directory assistance services. In this scenario, consumers access voice search for free in exchange for accepting ads on their mobile phones. Users looking for the nearby Starbucks might see an ad for a local donut shop, for example.
This new breed of location-based services is bound to take off – but only if it's offered free to consumers, Sterling says. This is borne out by data from Opus and Local Mobile Search that predicts a dismal future for the paid directory service business. It reckons revenues will drop from $3.5 billion in 2006 to $1.8 billion by 2010 in the U.S. alone. At the same time the advertiser-supported model, which offers consumers free directory services, is expected to increase to a $3 billion business in 2010 from $203 million in 2006.
And other numbers have whetted the appetite of operators, service providers and mobile phone manufacturers to take a second look at location-based services. Insight Research Corporation, for example, expects the worldwide market for location-based telecommunication services to reach nearly $1.5 billion in 2007 as more companies provide customized services based upon a location-awareness of their end-users.
But how can companies that lack access to GPS technology or insight into mobile operator Cell ID data cash in on location-based services? Mobile Finder, a service provided by TynTec, a mobile messaging service provider, may have the answer. The service taps the same global network TynTec created through agreements with mobile operators to deliver SMS messages to "guarantee the localisation of any mobile phone" down to a radius of between five and 40 kilometers, according to Michael Kowalzik, Tyntec CEO.
This is possible because TynTec is the only provider with direct access to SS7 connectivity through partnerships with mobile network operators Manx Telecom (Isle of Man, UK), Digicel (Jamaica), Alands Mobiltelefon (Finland) and CTM Macau (China). SS7 (Signaling System 7) is the mobile world's equivalent of Internet Protocol (IP).
"With our service any company that wants to provide location-based services can do it down to a city or district level," Kowalzik says. "It's a level of accuracy that enables companies to return results such as business listings and what's on in the way of local entertainment." More importantly, it allows providers to reach consumers who don't have GPS-enabled phones. Penetration will take time and ABI research predicts one quarter of all 3G handsets will include GPS capability by the end of 2008.
Location-aware discovery
The advance of Global positioning Systems technology (GPS) clearly plays in favour of location-based services. The satellite network is ready for prime-time and can locate objects with an accuracy of about 30 feet. While there mounting concerns that GPS services are inaccurate indoors and could drain on mobile phone batteries, the technology nonetheless goes a long way toward enabling content and services providers a way to push their offer to consumers in tune with their context.
Nokia has already built GPS receivers into select devices including the N95 and the aptly names Nokia 6110 Navigator. The hope is that location-based services will move become the cornerstone of a variety of "location-aware" services. "Nokia believes location context is the most essential features of mobile devices going forward," explains Michael Halbherr, director of Location Based Experiences.
Information about the user's location is not only essential to navigation; it sits at the core of a slew of services, ranging from mobile search to mobile blogging. "If I find cool places, I may want to share them with good friends or add comments and share what I have found with others," he says.
Against this backdrop, Halbherr points out that applications like Nokia Maps are not only popular with end-users; they pave the way for mobile operators to create and market location-based services to a customer base that has come to demand contextually-aware and relevant offers.
The proof is in the growing popularity of personal navigation devices. "Spend on these [devices] has bypassed the mobile operators and the mobile handset makers entirely," Halbherr says. People are willing to pay for navigation services and now it's up to operators to make their move. "We don't see the operator as a competitor in this at all; we see the operator as a partner that create interesting solutions and make additional revenues on top of what we are doing today."
Right place, right time
One operator that understands the appeal of location-based services is Vodafone in the U.K. At press time the operator was gearing up to offer Google Maps as a location-aware client application that would enhance the user experience and offer advertisers a new channel to the customer.
According to Mike Eaton, Vodafone UK head of content, the new service will enable advertisers to display their destinations as icons on the map. In additional to graphical representation, the service will enable click-to-call functionality, allowing users to click a link to call business listings when they are nearby or simply in buy-mode.
Vodafone has also taken the wraps off several location-based services, including a property search service it offers in partnership with RightMove, the U.K's number one property website. The mobile version of the Internet site is accessible to all networks and handsets which enable mobile internet browsing. However, Rightmove has partnered exclusively with Vodafone to launch the mobile service with a "find me" facility. This advanced function means that the user can ask the Vodafone mobile network to find their current location using satellite technology – and can then see all available property in the area and be directed towards their nearest Rightmove agent.
"Brands are extending their presence beyond the Internet to deliver an enhanced experience via the mobile Web," Eaton observes. "Location takes this experience to another level." Indeed, adding location to the mix takes advantage of the unique benefits of mobility and allows brands to do much more than simply replicate their Internet offer on the mobile Web.
A prime example of this is the Time Out service available on the Vodafone portal and produced by Mobile Commerce, a UK-based developer of mobile search facilities. MC specialises in local mobile search, and has also forged business relationships with companies including Yahoo!. MC effectively links Yahoo! advertisers, who bid for keywords, with all the operators in the U.K.
Altogether MC counts around "half a million local search requests a month," according to Steve Page, MC's CEO. "People are looking for what to do nearby. They're interested in dining out, going out and generally having fun." Users also require relevancy in both their results and the mobile advertising messages that accompany them. To this end MC enables Vodafone's Find & Seek service to deliver a balanced mix of contextual and location-relevant results and advertising. "A search for Wimbledon, for example, would also list where users can place a bet or watch the matches on a wide-screen TV," Page explains. "People want a broad array of options, they want to know contextual results that they can also make use of."
Wayfinder, a mobile map and GPS services provider headquartered in Sweden, believes location search and services should offer mobile users personalized information – results the company can deliver by linking into a wide variety of external databases.
"Most services ask the user what database they want to search in – we turn that whole process around and allow users to make search in a way that is very much like a Google search," says Magnus Nilsson, Wayfinder CEO. In his view consumers should be able to enter in "fish and chips" and – without inputting any other information – receive results that include local restaurants that serve the dish. The service should also navigate users to the restaurant of their choice.
The external databases delivering the results could be linked to Google, Yahoo, Yellow Pages – or any other company that provides data. "It all depends on the business models and what the particular mobile operator prefers," Nilsson says. "Operators can also differentiate themselves on top of our technology through the content they provide on top of basic map coverage." Wayfinder customers include operators such as Telenor and Telefonica, as well as mobile phone manufacturers Sony Ericsson and Nokia.
Buddies and 3D buildings
Moving forward, location will be a must-have component in a wide variety of applications and services, ranging from blogging to multiplayer mobile gaming. "It's not just about providing location-services; it's about creating and benefiting from communities," Wayfinder's Nilsson says. "I believe you'll see services flourish that allow uses to see one another on maps and chose meeting places to connect."
In Japan one service gaining traction doesn't connect people; it delivers location-based information linked the direction in which users point their phone. The new release service – an upgrade of an earlier service provided by CyberMap Japan, owner of Mapion, a mapping services company, and Geovector, a location-based services company – is now available on over 2 million Sony Ericsson, Kyocera and Casio mobile phones using the KDDI network.
The service lets users point to and receive information about over 700,000 points of interest (POIs) across Japan. GeoVector has also added 3D capabilities to create a world-first mobile search service that not only finds and identifies buildings, but allows objects inside to be visible to users standing outside. In practice users can point at a building and see which floor an office is on, and the addition of historical data allows users to view a site as it was decades, even centuries before, observes John Ellenby, GeoVector president.
Moving forward, Ellenby can envision new forms of location services and the emergence of "immersive local search." In this scenario users would be able to point their phone in a direction and see the shops and destinations in that area that accept a particular credit card, for example.
But it's not just about a better user experience; the approach would be a significant boost to mobile advertising, Ellenby says. "By pointing the phone to request information or offers, users are telling the advertiser what they want at exactly that point in time. Other methods send users messages based on their location or their previous shopping habits. GeoVector's pointing access protects users from location spam and provides them with the convenience of requesting offers only when they are ready to buy."