Places, Please: How Location Changes Digital Marketing

And Spawns a Flood of Useful On-the-Go Brand Experiences

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NEW YORK (AdAge.com) -- You're freezing your fingers off on the corner of 43rd and Lex, just east of Grand Central. It's cold and you're clumsily typing your coordinates into a Google search box on a palm-sized keyboard. Your stomach growls. Where the heck is that sushi spot you read about in the Times?

SHERPA: This Android app is trying to move beyond simple navigational tools to answer the question: What's going on around me?
SHERPA: This Android app is trying to move beyond simple navigational tools to answer the question: What's going on around me?
Remember this miserable scenario -- it's a dying breed. In its place will emerge a new world where virtually every digital interaction is tied to a location and the information you're seeking will be at your fingertips, whenever and wherever you're looking for it. The key for marketers is to understand what kinds of information people want when they're tied to a certain place.

"Simply put, location changes everything," said technology writer Mat Honan in a Wired magazine cover story earlier this year. "This one input -- our coordinates -- has the potential to change all the outputs. Where we shop, who we talk to, what we read, what we search for, where we go -- they all change once we merge location and the web."

OK, that sounds admittedly lofty. And there are plenty of reasons why it won't move fast enough to satisfy the mobile soothsayers, from pricey data plans for the average mobile subscriber to the fact smartphone share is still dwarfed by less sophisticated so-called "feature phones." But it is hard to ignore the manifestation of the long-predicted geo-local revolution. Consider that 70% of the 30 million U.S. iPhone users already use GPS and, in the next five years, smartphones equipped with GPS will overtake stand-alone personal navigation devices, such as TomTom and Garmin, predicts research firm iSuppli. Already nearly every marketer-built mobile app taps into GPS.

To understand why people are so excited, look at the impact other digital innovations have had. Search, for example, solved a big part of the "what" problem -- helping you find what you're looking for. And while search didn't know much about our social filters, social networking came in and offered up a "who" filter. Now we're looking at the "where." And it's the combination of these filters that have the potential to change consumer and marketer behavior.

It's also the first time developers have been able to play with location-based data, which is why there's a rash of new services available, said Kevin Slavin, CEO of Area/Code, which builds mobile games and is starting to incorporate location. Every phone has always known where it is, because it can triangulate its location based off cellular towers, he said, "but we've never been able to get that data until now."

The real lure of location-based marketing, said Rahul Sonnad, the CEO and founder of location-based services company Geodelic, is not finding the nearest WiFi-enabled coffee shop via your phone's mapping application, but combining a person's location, inferred intent and personal affinities to aggregate and deliver relevant information about the real world surrounding them at any given moment. He calls it the "global mobile web."

Geodelic's Sherpa app, available on Android, aggregates many consumer mobile experiences -- Yelp and CitySearch for customer reviews of restaurants and destinations, Zillow for real-estate information, Google Local for business listings -- and associates them with locations that are relevant. The idea is to see everything around you on the screen in your hands. It's largely navigational today, but that's not the end game, Mr. Sonnad said.

"Everybody's got a website, but nobody has a mobile experience right now," he said. "Next year, probably the end of next year, if you pull your phone out and you're in the Hilton hotel and it doesn't tell you information about the Hilton, either your phone is broken or the Hilton's broken. If you, as a business, own a location, you've got an interesting shot at reaching your customer."

That's a bullish prediction -- more bullish than most mobile experts would make -- but Mr. Sonnad is building his business on the premise. He sees the "mobile experience" as something every hotel chain, big mall owner, theme park, or convention center will need, as well as an opportunity for more traditional marketers. Think about a credit-card rewards program, he said, and what it could do with a better understanding of its customers' travel patterns.

The promise lies in the realization that mobile isn't just an ad play but an extension of the services and products businesses already offer. And location is one of the most important contextual clues a mobile phone can provide. "Mobile marketing will move beyond promotions and advertising," said Kenneth Parks, senior VP-managing director at Digitas in Stanford, Conn. "It'll be about mobile services that might be marketing but they'll feel like services."

Faris Yakob, exec VP-chief technology strategist at McCann Erickson, calls this "geo-utility" -- the idea of "making something useful for where you are right then." Mr. Parks cited what should be possible for airlines (Delta is a Digitas client), such as being able to receive seat-upgrade information via mobile, or learning what other flights are available if one shows up to the airport early. "Mobile makes brands look at the customer's ecosystem and ask how does a brand's mobile solution fit into the world of a customer, not vice versa," he said.

Right now, the most-hyped location upstart is Foursquare, a mobile game (it runs as an app on iPhone and Android) where it's possible to earn points and badges for "checking in" from public places like restaurants, bars, parks or museums. You can also see where your friends are and create semi-serendipitous meet-ups. Because you tell it where you are, it's more accurate and contextual than most location-based mobile services, said co-founder Dennis Crowley.

"There's a big difference between location, which is your latitude and longitude, and place," he said. "When you move from location to place you get the context for free. If you're at a bar called The Magician on a Friday night at 8 p.m., I have contextual clues that just aren't there with latitude/longitude."

He points out that on the web, you can see where people come from when they arrive on your site -- and where they go after -- but no such thing exists with physical spaces, and that could be of huge value to businesses. He also said there will have to be important opt-ins and value offered to users in such a scenario, things like geographic triggers that unlock pieces of content or the ability to know what's around the corner before you turn it. But he concedes that's still a ways off. For now, location as a filter is one of the biggest consumer benefits, and the ability to check-in -- or not -- gives the user control over the information they're sharing.

"There's no such thing as information overload but filter failure," said Mr. Crowley. "Location is one of those big filters we've been missing in a lot of stuff." Location can be combined with other filters, especially social ones: Already you can follow tweets emitting from your immediate area and see what Flickr photos were taken nearby -- imagine targeting people through Facebook based on their location. "FourSquare isn't necessarily a response to information overload but it's meant to make what you're doing in New York City easier," Mr. Crowley said. "It happened to spread to whole a bunch of other cities and that's great."

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