Mobile Location-Based Services on the Rise

Published on: 2015-02-05

eMarketer alerts us to this growing trend:

eMarketer estimates there will be over 63 million location-based service users worldwide this year, and 486 million in 2012.

“Consumers have discovered that the appeal of location-based services extends beyond pinpointing locations, businesses and other points of interest,” says John du Pre Gauntt, senior analyst at eMarketer and author of the new report, Mobile Location-Based Services. “Buddy beacons and friend finders based on location-based service technology allow mobile users to determine each other’s physical location.”

Our take:

Location-based services can indeed be useful, and utility is a major driver of customer demand (along with price reduction, of course).  However, it is not all roses in the location-based services market.  As eMarketer notes, consumer privacy is a major and growing concern for many interested in trying out such services:

“Things are moving fast, but there are some significant hurdles for marketers trying to make location-based services a standard part of the mobile marketing mix,” says Mr. Gauntt. “An obvious challenge is to address both the real and imagined privacy concerns.”

In April of this year, CTIA, an international mobile industry body, published best-practice guidelines for location-based service applications. Two fundamental principles guide the document:

  • User Notice: Location-based service providers should inform consumers as to how their location information will be used, disclosed and protected so users can make informed decisions about whether or not to use the service or authorize disclosure.
  • User Consent: Once users have selected location-based services or authorized disclosure of their location information, they should have choices as to when or whether location information will be disclosed to third parties, along with the ability to revoke any such authorization.

Consumers fear being tracked—and having even minor activities recorded. Or, as Kevin Ho characterized the problem in his blog, each of us is reluctant to become a “human cookie.”

The solution will surely be some combination of a "bill of rights"-like document combined with oversight, hopefully from the private sector.  However, failing that solution, some level of government oversight may become inevitable, as distasteful as that might be to the industry and consumers both.

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