Mobile Groove

EDITOR’S NOTE: Mobile advertising is certain the hot topic at CTIA, where Mobile Web And Apps World Forum (Ajit Jaokar’s CTIA partner event) was standing room only. (Well done Ajit!) Players from across the ecosystem are anxious to explore new models to monetize inventory, apps and services. However, as I pointed out during my panel — moderated by well-known analyst and author Chetan Sharma – there’s still is a lot of mileage left in established models such as text and MMS approaches to advertising before we focus too much of our effort on the whiz-bang new ad units and creatives. In his guest contribution, Martin Wilson – MSG columnist and owner of Indigo 102, a strategic consultancy with a focus on media and mobility and a deep understanding of the local space— argues that traditional media owners also have a lot of untapped energy and assets.

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The popularity of location-based services applications – particularly their top-notch position in a variety of app stores – indicates that location apps are crowd-pleasers, but are they really game-changing? Nate Janewit – an MSG columnist and a computer scientist at Stanford University sharply focused on the larger issues around LBS – suggests companies need to think differently about location in order to wring more value out of their vast stores of data.

The recent report on trends in location-aware apps from Apple’s App Store, Google’s Android Marketplace, and Blackberry’s App World released by Skyhook Wireless, itself a provider of a patented hybrid system of location awareness, reveals a buoyant market for LBS apps. Indeed, the Apple App Store was found to have the greatest number of location-based applications, at over 2,300, and the highest percentage of paid for location apps, at over 75 percent. 67 percent of Blackberry apps are paid, and 80 percent of Android Marketplace apps are free.

Clearly, location apps are popular, as their increasing ubiquity and popularity across a variety of app stores demonstrates. But move past the hype and the excitement generated by the flurry of activity in the space, and it becomes clear that location services – by themselves – are not game-changing.

Location-aware data is not enough

Indeed, mobile location-based services and social networking companies such as Loopt, Pelago, and Sense Networks have invested a great deal to achieve their vision, which revolves around the provision of an array of consumer and community services supported by socially-tagged, location-aware data stores. The data they have is impressive and the expansion plans they pursue are ambitious. However, they also face formidable competition from Internet giants (Google, MySpace, Facebook, and Yelp) that have already aggregated their own large sets of useful social content, and are anxious to extend their reach to mobile.

Can companies compete on location data? Many players are positioning themselves to do just this. However, I submit that location services – and the structures and systems in place to deliver them – represent little more than an incremental innovation on top of the immense stockpiles of location data and content that are largely under the control of established Web companies and heavyweights. As a result, these Web giants are well-positioned to leverage location data to mobilize their offers and ultimately dominate the marketplace. There are, however, options and strategies mobile location services companies can employ to win the game – even though, as I argue in this is column, location services on their own are far from game-changing.

Admittedly, not everyone shares my view. Sam Altman, founder of Loopt, told me in a recent interview that he strongly believes in the value of innovation in location-based services and their central position in personal mobility experiences. A prime example is the company’s iPhone app. Loopt’s Mix feature enables users -without compromising their personal privacy – to connect with other users nearby. What’s more, users can find places nearby on Yelp and find what their friends on Loopt are saying about those places.

Beyond this interesting user experience, Loopt’s location-related content is thin, and therefore isn’t terribly useful – yet. However, it’s not so much the company’s progress with their service offering that interests me as much as its business priorities.