The gold rush of location data

The gold rush of location data

There’s been a lot of talk lately about the utility of mobile location-based social networks. Their growth curves are starting to resemble the early days of Twitter, as early adopters flock to check-in at their favourite spots. Certainly, if SXSW is any indication, and hype is to be believed, 2010 will be a big year for location-based social networking and recommendation.

Much of the focus has centered around why users would participate in location-sharing applications. Foursquare is taking a rankings-based game play strategy. Gowalla is digging into the world of objects, both virtual and physical and how they can interact using location. Yelp is playing with reviews.

Who is going to emerge as the major player in the space? Who knows.

What is very clear though, is that the stakes are high, and the value of this data is immeasurable.

It starts with Analytics

The analytics of tying real world location into a social cloud of data is certainly intriguing. Imagine being a small business owner, interested in who’s coming into your store. You could ask your customers to fill out a card or participate in a loyalty program, or you could simply askFoursquare, who have just announced “real world analytics” to their application, exposing data in a format that businesses care about.

Because these tools all plug into other social APIs (Twitter, Facebook etc), a natural extension of this (privacy issues aside) what if they could show you not only who your most influential customers are, but also where else they hang out, and when they are most likely to be in your neck of the woods.

It ties to in-store conversion

Now this is getting a bit out there, but think of the possibilities. Again, ignore privacy… definitely an issue, but sometimes it gets in the way of creative brainstorming.

Imagine a visitor who stumbles upon your presence online (could be a website, could be facebook…) and interacts with your content from their mobile phone. They decide they want to come to your restaurant. As they walk in, for the first time since paper coupons, visitors are entering your establishment carrying the device with which they interacted with your marketing. What if (big what if), as they checked in on foursquare, APIs connected and your web analytics tool was able to register a physical conversion based on the marketing that they had interacted with.

30% of your foot traffic last week were fans of your facebook page

It goes beyond small businesses

What is one of the first criteria that is discussed when setting up a marketing campaign?

… And an important criteria of targeting is… location.

The advertising networks that we are used to using (Google, Facebook, et al), all use several factors in order to pinpoint your location when targeting ads. Predominantly though, this is done using your IP Address. As I sit here in Kingston, Google knows where I am based on tracing my physical location back to my service provider. Its easy.

Experiment: Try tethering your iPhone to your laptop. Do a few searches on Google. Look at the ads. It all falls apart.

In my case, Google suddenly thinks I’m sitting in Montreal.

Because of the way that mobile carriers distribute IP addresses, location is much more difficult to determine. As 3G proliferates and more people turn to mobile browsing (iPads, netbooks etc are all in play), our location is more difficult to determine; unless we actively tell the system where we are.

Google Buzz, Facebook Location

It makes perfect sense that Google wants you to Buzz your location. It completely adds up that Facebook is getting ready to flip the switch on location. Whatever gaming spin they have to put on it to make it work, is actually sort of irrelevant at this level. Its not about your friends or collecting objects; they are in the business of wanting to know where you are.

Is this a bad thing? Probably not. Privacy will be an issue, but thats what policies are for. Ultimately, this is going to help maintain ads that are more contextually relevant as we’re on the go.

Just don’t be fooled. While you’re busy worrying about who’s going to be the mayor, the major players, startups and venture capitalists are worried about their advertising business – and they’re all competing to be the king.

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  • Tristan Cuschieri

    As usual, your blog has made me look at this issue from a perspective I didn't have before. What's most interesting to me is the point about these services being unable to accurately derive our location when connected to mobile networks.

    I've started to see this even with connections to “standard” ISPs, depending on the technology being used to serve the connection. Case in point: Bell's new Fibe service in Ontario.

    Location services will often mistakenly see a Fibe customer in Toronto as connecting from Yellowknife, NT. So it makes perfect sense that social networks based on location would want their users to tell them where they are, instead of being forced to guess.

  • Phil

    Google Buzz surely have been concern to people but now its much changed and your point of location based in Social Media, already taken care by twitter and other social media networks will be their too