Location-based services (LBS) still represent a wide open business opportunity, but will merely be a key feature for solid business models and be fully taken for granted in a few years. Those were some of the key takeaways from last night’s forum on LBS sponsored by the Northwest Entrepreneurial Network and held at Seattle University.
The panelists agreed that we are still very much in the early days of LBS. Kevin Foreman, CEO of Point Inside, a company that he called “the Google Maps for indoor venues,” predicted that yellow pages would be gone in five years and said that traditional print advertising can’t compete with “permission-based, targeted, timely marketing” including digital coupons.
“How many people saw the Macy’s ad in today’s Seattle Times?” he asked rhetorically. (No one in the very iPhone-enabled crowd raised their hands.)
Kevin Nakao of White Pages, Inc., says they are making $15-30 effective CPM on location-based ads, compared to $.50-2.00 on other advertising programs. He added several other interesting data points, too:
- 70% of White Pages’ mobile services users engage the location feature.
- 50% of White Pages’ mobile services users visit from the mobile web and not a native application on the iPhone, Blackberry or Android (even though they have had more than 3 million downloads).
When planning a mobile strategy, all the panelists encouraged entrepreneurs (listen up local media companies) to keep it simple and not worry about offering a mobile application that does everything on every platform. Just get started with something basic, even if it’s just a mobile website or just an iPhone app. Then learn from the users and improve the experience. (The advantage of a mobile website is the lack of an approval process from the iTunes store that can take weeks so you can start receiving feedback immediately. The downside is there is no iTunes payment process to easily make money if it’s a paid app.)
Bryan Trussel, CEO of Glympse, said his team has stayed true to their mission to focus on a simple but effective service. They have developed interesting features that are “on the cutting room floor” because they made Glympse, which allows you to message a friend with your location, more complicated and more difficult to use.
Everyone knows about a mobile device using GPS to locate the user. So what’s next in terms of technology, business models, and (gasp!) regulation for LBS?
- Augmented or layered reality gets everyone excited (see the Bing demo at TED)
- RFID will intersect with location-based services and be “phenomenal,” according to Trussel.
- Foreman says future mobile applications that are really personalized will be “home run applications.”
- Crowdsourcing with like-thinking people (eg. Waze) based on location will be popular – but profitable?
- Foreman says we won’t have regulation to address privacy concerns regarding LBS. We will course correct ourselves.
Moderator John Cook asked several questions from his readers and one elicited a unified chortle from the panel: do users really want location-based services? “In four years, that question will be like asking whether users want to search the web,” Foreman replied.