April 28, 2009
Location-Based Advertising Measures "Cost Per Pair of Feet"
Twitter popularized the phrase “What are you doing?” Now the question has become “where are you doing it?"
By most indications, location-based advertising will be making strides in 2009. This is despite what has been called a “new fear of advertising,” namely the sort of subliminal stuff popularized by Minority Report and Cory Doctorow novels.
At issue is data—sharing it and saving it. Are we willing to trade our information—past and present—for more personal/targeted/useful content? And will ads become so relevant that they are indistinguishable from that content?
Truth is, we’re all fairly used to sharing certain data at this point—just look at the whole personal informatics movement— but location is very personal. There’s the fear that “Big Brother is watching” wherever we go. However, people are becoming increasingly comfortable with sharing their location to reap the benefits (e.g. where are my friends? is there traffic?). Navteq is enabling this by crowdsourcing GPS devices to determine patterns, as is a company called Sense Networks.
But would one of those “benefits” be more targeted ads? Navteq is building an ad network based on location this year and Loopt is integrating ad-serving as well. Garmin has been throwing in another incentive—free lifetime traffic in exchange for ads (which otherwise costs $60).
The history of this data adds a whole other layer of value. The ability to target consumers by both past behavior and current location is the holy grail for advertisers. But it can also improve the user experience as well. I’m happy when Amazon recommends products I might like, foursquare tells me nearby places to visit, or my phone displays the weather where I am.
This explains why uLocate says they see 15% of users wanting to save "my places” -–and we’d bet that those numbers skew young. And it's the younger users of Loopt, mostly teens, who are more willing to share their location and less concerned about privacy. That said, Loopt does not store location information, neither does Google’s new location service, Latitude. Some companies claim to make your data anonymous, but can we really “obscure” it? According to some, no, and it’s already too late.
“Brands are wise to listen to their hesitancy,” said Sam Altman, founder of Loopt, at a SXSW panel this year. Loopt experimented with location-based advertising back with CBS back in 2007. This year it will finally be getting its ad-serving initiatives off the ground, using an opt-in or “pull” model (meaning the user has to ask for the ads). This practice of requesting permission is becoming standard among mobile location-based services.
It will be interesting how people react to the different ad “experiments” this year, but one thing is certain—the tremendous value they hold. Brands will be able to entice people into stores when it’s the most actionable—in that last 50 feet. As Altman put it, we’ll soon be measuring “cost per pair of feet.”
Note: The initial version of this post mistakenly stated that Garmin is owned by Navteq
