In the technology world, location is kind of a big deal. Social media users have been busily checking in and location-stamping photos and updates for years now. It’s a status thing to let others know we are at Blue Bottle Coffee or the hot new food experience in the neighborhood, ‘South Whatever.’ For some, it’s just checking in at Target twice a week.
As consumers, we also love location-based tools that make our lives better. The map wars between Google and Apple have been widely publicized and now Facebook is reportedly wooing Waze. In fitness, apps such as Moves and Fitbit track us to help us monitor our activity. Automatic is going to give our automobile a beautifully designed brain.
Data generated from these services has become extremely valuable as marketers look for ways to better target customers. Bricks and mortar businesses have been losing the insights war against the Amazons of the world, and location data has the potential to flatten the playing field. Where you have been and where you are going is highly relevant to what you might buy. Location is the cookie. And with mobile advertising starting to mature, there are now ways to reach you while you are on the fly.
Before smartphones, it was difficult to obtain rich location data on individual consumers. The best source, point-of-sale transactions, were tightly held in vaults by banks and payments companies, and shared with only select strategic partners. Mobile carriers have for some time been aggregating user data through tower triangulations and WiFi grabs. To protect relationships with customers, mobile carriers have been reticent to share this information with partners and have used it themselves to limited effect.
The smartphone revolution has changed that.
Smartphones have enabled a much more democratized form of location data collection beyond the telecom and hardware incumbents. Social check-ins (Foursquare, Facebook, Twitter), location stamps (Instagram), intermittent GPS data (Google Maps, Waze) and ambient tracking (Google Now, Nike+) are contributing to an explosive growth of individual user location data.
The thesis for many technology investors is that the volume of location data will be ubiquitous, collectable in a distributed manner, and essential to business competitiveness. What businesses really need now are tools to gather relevant, proprietary data, run powerful analytics, and improve engagement with customers. ABI Research predicts location analytics will be a $9 billion market in 2016.
For consumers, this is great news as the services yet to come will bring tremendous value and will be highly contextual. I am very excited for the ever-present Candy Crush Saga ads in my news feed to be replaced by enticements for amazing local coffee shops such as Two if By Sea. And while I won’t necessarily be checking in when I’m at Target, you can bet one of our benevolent overlords will know I was there and will find a way to make going back worth my while.
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Thomas Rankin is the investment director at Innovacorp, a Halifax-based early-stage venture capital fund making investments in internet, mobile, cleantech and life sciences. He tweets @rankinthomasand blogs at impossibleconfidence.com.
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