Looking back, 2010 saw increased usage and understanding of location-based services as geo-fencing went mainstream and location data emerged as a new mine for marketing insights. From Apps to Operators, everyone jumped into location-based mobile technology offerings. We all know about Foursquare and Gowalla, but did you know that carriers like O2 turned on geo-fence mobile marketing for brands like Starbucks and L’Oreal for over 1 million opt-in customers?
Local mobile advertising will be a new media darling market. BIA Kelsey has reported that mobile local advertising in 2011 will reach $692 million and climb steadily to over $2 billion by 2014, and Google has recently gone on the record to say that this market is their priority. In addition to businesses and advertisers, we will see carriers playing major roles in the acceptance and understanding of location-based services in countries all around the world next year.
It’s silly to say any particular year is the “year of mobile.” Mobile will have golden years, in some respect or another, for a while. What will 2011 bring? 3Ms; Maturity, mass-scale and Microsoft’s big bet.
Here’s my crystal ball.
1. Carriers make a comeback and will reach 50 million opt-in consumers with location-based marketing at mass-scale.
2011 is the year that carriers take back the lead in location-based mobile marketing, leveraging the trusted relationship they have with their subscribers in combination with access to location information. Carriers will combine to reach over 100 million consumers with their own location-based marketing programs in 2011, making them a major player. Expect to see more carriers rolling out opt-in location-based offers, coupons, and other services that help consumers understand the environment around them and what’s available at that moment. SMS will beat the sexy app stereotype as carriers’ preferred method of contacting consumers.
2. Facebook wins the location wars – Foursquare pivots and Gowalla goes cult status. Apps aim beyond the check-in for cool factor.
The game-mechanics of just-checking-in will not be enough to maintain media buzz and interest, even according to Foursquare CEO Dennis Crowley.
For that reason, coupled with Facebook’s own Places product, both Foursquare and Gowalla have under 10 million active users each in 2010. Despite Foursquare’s push into deals and discounts, Facebook will combine its scale and engineering talent to surpass both startups in 2011. Most will think this is solely their integration of “deals,” but Facebook will invest in traditional offline marketing to drive their leadership in the space. But look out – Marc Andreessen, an investor in Foursquare and board member of Facebook, will most likely still lead Foursquare into new areas that won’t be touched by Facebook with the hopes of helping it pivot beyond the check-in. Gowalla won’t be so lucky.
Companies like Foursquare and Gowalla will need to go beyond the check-in and find ways for consumers to connect once inside a location. Expect more interest in the technology of proximity-based sharing “after the check-in,” such as the interest developed by apps like Bump and LoKast.
3. Location land grab comes to an offline location near you.
2011 is the year that location-based mobile begins to play a substantial role accessing in the $133 billion local media budget*. The use of location tracking, combined with the “buy local” trend, we can expect to see Yellow Page companies, Facebook and Google all launching hyper-local mobile offerings for consumers that tap the SMB budget and siphon dollars away from traditional channels. Expect bigger marketing and advertising budgets by location-based services, and more TV programming, commercials, stadium announcements, and other offline events ranging from the Super Bowl to NBA games and NASCAR races. Groupon will continue on their seemingly unstoppable hot streak, integrating more mobile and location-based (beyond just city input) into their offerings in 2011.
4. Google’s Android platform matures and catches up on infrastructure to match Apple’s iOS.
2010 was a big year for Google. After finally getting approval from the FTC on the AdMob acquisition, the company showed signs of integration at the end of the year, with much more to come in 2011. From a developer standpoint, Android will be challenged a bit by device fragmentation, but the platform will finally crack the code on in-app payments, improve app discovery and continue to buy mobile startups. Also look for Android to explode in markets like India, thanks to groundbreaking concepts like Bollywood music streaming via Google OneBox search and cheaper smartphone handset availability.
5. Microsoft needs to do something big, and will buy Nokia.
Microsoft has a viable mobile operating system to replace Symbian, as well as brand reach, consumer base, and the ability to build a developer ecosystem, while Nokia brings handset manufacturing and the distribution power of hundreds of millions of handset sales each year around the world. The combination creates a viable third competitor to Apple and Android in the smartphone handset market. This year Nokia replaced its CEO with Microsoft exec Stephen Elop, so the bond remains for a potential “speed-dial deal” between Espoo, Finland and Redmond, Washington. Other players to watch include Dell, HP and Comcast.
And one to grow on: Will location-sensitive apps come to interactive TV? Not yet – but the potential will be there, with millions of dollars in marketing investments by the TV industry, Google, Apple and so on. Maybe 2012?
* Kelsey Group U.S. Local Media Forecast, 2009-2014; published September 2010.
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