One of the keys to having a good business, the old adage goes, is, “Location, location, location.” Now, despite what a Pew Center report says that location-based services like FourSquare and Gowalla have not caught on–the measure is not mass, at least not yet.
As mentioned in this space in August the reality is there are people out checking in, and leveraging location-based apps and services. If the Pew Center numbers are correct, 1% of adults in the US use LBS apps and that number is 4% of US adult internet users. Yeah, percentage wise that’s a small number–but mass wise, that’s a pretty big number.
And something to keep in mind, is something Larry Kramer (like me, he too is former CBS Digital)–those users are a premium to advertisers today. Kramer actually said this morning on Bloomberg TV that the future of TV advertising is actually positive if you add in the ability to target–demographically and via geography.
From experience that can be more than 3X an ad buy.
Again, smallish numbers today, but numbers that get better and as the data is better mined, and the targeting better refined–that premium goes up.
On the product side–as I opined in August, Facebook would help drive the LBS market–and is slowly is. This week, an updated to Facebook places went live. Add to that some innovations going on–like what another former boss of mine is doing at Shopkick taking LBS into the store–and the actual user experience is becoming richer.
As the user experience gets better–which means the likes of FourSquare, Gowalla, Bright Kite-and the ones we don’t know about yet make their apps better–the user engagement goes up. That 1% easily becomes 3%. The 4% becomes 10%.
And the driver for this will be the ad dollars on the table now, and in the future. It is a business. Yes, it’s a moment when product is ahead of consumer demand–but as that gap closes–winners will survive, losers will be cut and ultimately a viable product will be left.