2010 a Year of Some LBS Success

Depending on who you talk to, 2010 was a year that was full of expectations not met in many cases. “We expected the big deal in 2010 to be the mobile operator’s walled-garden approach to location, and other apps coming down completely. Although that didn’t happen, we saw positive momentum and believe that the operators are well-positioned to make further strides in 2011,” said Bhavin Shah, Polaris Wireless executive director, marketing and business development. “With Verizon’s LTE announcement, AT&T testing LTE, and T-Mobile claiming 4G status, advanced networks able to power advanced apps are on the way. The move toward location-based mobile apps for social networking, such as Gowalla and Foursquare, has already primed consumers for further LBS takeup. These apps also demonstrate the value of high-accuracy location for other purposes, such as mobile marketing.”

Shah believes that 2011 will be the year mobile marketing takes off, with wireless operators going on the offensive to reclaim market leadership in LBS away from the app stores.

One company, Where, says 2010 was a monumental year. “We’ve more than doubled our staff to more than 75 people and have increased revenue 350 percent from last year,” said Dan Gilmartin, Where vice president of marketing.                            

“I expect to see the growth trends continue into 2011, fueled by the accelerated rate of adoption of smartphones driving more engagement of location-based services. The two areas that I think will get a lot of attention in 2011 are location-based advertising (LBA) and mobile commerce,” he said. “Every analyst report for the last 5 years has predicted that ‘next year’ LBA will take off. Well, a lot of us have been waiting for next year for many years. In 2010 however, we have seen more companies, big and small, increase their test budgets and begin to focus on the ROI (return on investment) of LBA.”

Gilmartin believes the increases in LBA are largely due to reach. “In 2010, advertisers finally started to see opportunities that provided enough reach to warrant the investment. Relevance has become a key area in mobile in 2010 and will continue to play a role in the increase of LBA,” he said. “Brands can leverage relevancy — which includes location — to better target ads to an appropriate audience. With LBA gaining steam from increased reach and relevancy, redemption or mobile commerce will not be far behind. In 2011, we will see location based ads/offers presented to users with a means through which consumers can purchase the product/service, paving the way for what many are predicting — the phone replacing the wallet.”