receiver magazine      #21 | Space is the place!

Based in London, Andrew Grill is an Australian mobile advertising evangelist and a senior telecoms executive, with particular expertise in the mobile operator space. He has a specific focus on mobile advertising and mobile social networking. During 20 years in senior positions across the entire value chain, he has developed a deep understanding of the telco market from vendor, operator, analyst, consultant and media viewpoints. Grill is a regular conference presenter, providing opinion and thought leadership for a range of publications on issues related to mobile advertising, location and social networking and he maintains a popular blog on these subjects. So what is it about Location Based Services (LBS) that gets everyone excited, yet fails to deliver on the promise of automatic, always-on, location assisted services and content? Andrew Grill explains.

Website: http://www.andrewgrill.com/

Illustration by Marco Schmidt ………………………………………………………………………………………………………………………………………………………

Location in a mobile context is the Holy Grail for many people. The one item we carry with us almost all the time is uniquely positioned (pun intended) to be able to add location information to everything we do whilst mobile.

In theory, getting the current location of a mobile phone and working out an approximate location should not be that difficult. TV shows such as CSI and movies like Minority Report reflect an always-on society where information on a person’s whereabouts is instantly available. In practice however, location is quite difficult and expensive to deliver to a mass market audience.

The introduction of satellite navigation (or Sat Nav) units by companies such as Garmin and TomTom in recent years has brought what was originally a military service to within easy reach of today’s consumer. Some 30 years ago, the US Military launched a series of satellites in low earth orbit that together form the basis of today’s GPS system. It was not until May 2000 that President Bill Clinton allowed the GPS system to be more accurate for the public – until then the military system was more precise.

GPS goes mainstream

Sales of in-car GPS units in Europe have soared over recent years, and now GPS navigation is making inroads into the mobile phone market. Handset manufacturer Nokia is now shipping more and more devices with GPS built in – recent launches of N or E series handsets have all been GPS equipped.

Nokia’s recent €8 billion purchase of Navteq has also shown that they are serious about location and navigation on the handset. At a recent location conference, I listened as traditional personal navigation device (PND) manufacturers insisted that they were not worried by the mobile phone GPS/navigation market, but in private they are concerned that the dominant navigation device in the future could become the mobile phone.

Google joins the party

It didn’t take long for web giant Google to join the location party. Their Google Mobile Maps was made available for mobiles in late 2006, and a year later they added a game changing feature to their product, called My Location. This feature, built into all GMM clients, allows the user to simply hit a button (normally the zero key) and have the application automatically detect where they are – either using the phone’s inbuilt GPS (for a location accuracy to within tens of metres), or more amazingly, for those phones without GPS or those indoors, the program automatically places the handset on a map to within a few hundred metres in built up areas, all in a split second.

This innovation from Google, combined with the increase in GPS enabled handsets, has provided the catalyst for new location services to evolve in 2008.

Since the late 1990s, the only way to locate a mobile phone was by taking a location “feed” from one of the mobile operators, assuming that they had a location platform deployed in their network.

In simple terms, the way this works is that the location server checks which base station the handset is logged onto (ready to accept a waiting call) and the location of the base station is used when calculating a rough approximation of where the user is currently located. Many in the industry predicted that this service would launch a range of location based services but as we have seen this did not eventuate.

One of the reasons behind the very small take-up was that each time the user was located, the operator would need to charge the equivalent of an SMS. For regular location updates, this could become quite costly and the resulting accuracy returned from these location platforms was quite poor. As there were almost no GPS enabled handsets available when these location services were launched, this was the only real way to gain access to a handset’s location.

There are also the obvious privacy concerns around any location service, so great care and attention was paid to the proper authentication around providing a user’s location to third parties. In the end, many in the industry would agree that cost, poor accuracy and privacy issues all but killed any new initiatives in the location space.


Handset based location

Until Google launched their GMM with My Location in November 2007, there were only a few companies developing operator independent location services. Companies such as Cambridge Positioning Systems, Seeker Wireless and Skyhook Wireless all developed handset based solutions to remove the reliance on the operator location service, and hence drive down the cost for regular location look-ups.

Skyhook Wireless has spent a great deal of time and money in developing a global database of WiFi base stations by literally, driving around cities and highways “listening” for WiFi base stations and recording their location via GPS. As the handset base station client detects a new base station, it checks the Skyhook database, and if present, the location is provided back to the phone.

The iPhone (both the 2G and 3G versions) both use this service to provide very good location accuracy when indoors and close to a WiFi base station.The iPhone/Google maps experience is then very close to what we have all been expecting for a while – automatic and always-on cellular location.

Not to be outdone, Google and Nokia have also built massive global databases of the cellular identifier (or cell-ID) code that is transmitted by every base station in a GSM or UMTS network. In the same way that Skyhook uses WiFi, the Google and Nokia mapping clients are now able to automatically locate a user on a map when GPS is unavailable or not present.

This handset based approach is what the location and mobile advertising industry have been waiting for, so that a user’s location can be easily added in real-time to make a decision about what content might be provided, based on location.


Open source location

Halfway through 2008, Google went one step further and launched their open source Google Gears geolocation API for Windows Mobile. This is a browser plug-in that provides the location of the handset by sending the cell-ID heard by the phone to the Google cell-ID database and returning the location co-ordinates to the handset application requesting it.

The Gears plug-in will be released to other handset operating systems over time, but once again, as with the web based Google maps, Google has provided to the masses a utility that the average consumer or developer (mapping and location) could never afford and which will drive location innovation across the industry.

Yahoo have also developed a location broker service called Fire Eagle that takes location information from any source and securely manages applications and services that can have access to this information.

Now that many of the building blocks are in place for low-cost, reasonably accurate location services for mobiles, we should start to see a range of new location services hit the market in the coming months, and into 2009 I predict we will also start to see location based advertising trials underway.


Now the pieces are in place, which location services will take off?

As a location advocate, I have had heard many people talk about the “Starbucks example” where a subscriber walks past a Starbucks … and you know the rest. I don’t believe that this type of location based advertising (LBA) will work, for a number of reasons.

First of all, let me kill off the Starbucks example. It is unlikely that this would ever work in practice, because in cities like London Starbucks doesn’t discount its coffee, and Starbucks stores are simply everywhere.

A more realistic use case would be for a movie chain. They most likely will have a movie club and a list of subscribers who have opted in to receive movie news and discounts. If the movie chain wished to fill seats on a slow Thursday afternoon, they would want to know how many of these opted-in members are near one of their cinemas.

Importantly, they do not want to know if they are actually at the cinema (then there is no point in sending them an offer as they are already there seeing a movie) but if they are close enough, and the offer is compelling enough (eg 50% off any movie in the next 30 minutes) then they are more likely to respond to the offer – creating a very targeted and instantly successful marketing campaign. It is this sort of approach that advertising agencies and brands have been waiting to explore.

In the real world though, the movie campaign example above would be difficult to execute with location technology available to the mass market. Let’s assume for a moment that all of the movie club members have a GPS enabled phone. What percentage of them have the GPS turned on (battery life is measured in hours when a mobile phone has the GPS on), and what percentage are not indoors, and hence able to provide a location fix?

Also, how often would you need to check the location of each of these users to see if they are close to the cinema? What is the cost to the subscriber, or advertiser, for each of these regular location requests, and how many are wasted if most of the movie club members are nowhere near a cinema?

The most effective and efficient way to provide this sort of location campaign is with a concept called zone detection, which has been pioneered by companies such as Seeker Wireless. In this scenario, a small piece of software resides in the handset, or the SIM card, loaded with all of the movie chain’s cinema locations.

Every minute or so, the software in the handset checks to see if it is near one of these zones, and if and only if they are “in the zone” will a message be sent to the ad server. In my opinion, for LBA to take off, it must have an element of zone detection for the push-ad campaigns to work at all. Mass market location campaigns will also have to consider location-enabling all of the inventory – this is not a trivial exercise, and is worthy of an entire article on this subject alone.

One commercial example of this concept is Starhub in Singapore who have recently launched their own LBA service. Checking a subscriber’s location from the network side as Starhub are doing consumes massive amounts of network resources that are also required to send revenue generating SMS, voice and data traffic. It will be interesting to see how successful this service becomes and what the return for Starhub actually is.

Location aware advertising opens up new frontiers for brands to place their advertisements in front of consumers at or near the place where they can obtain them, thanks to the ubiquitous nature of the mobile. In the most basic sense, if an ad server is made aware of a user’s location, then a decision can be made to deliver an advertisement based on either the user’s current location, or a history of where they have been, coupled with a user profile of their interests and previous purchases etc.


Location will emerge to become a key component of mobile advertising campaigns – but there are a few other things to get right first

I believe there are four key areas of focus to ensure mobile advertising as a whole is a success:

1. Flat rate data plans for all. The UK and other markets have made a good start here but the realisation by other operators that flat or low rate data plans will drive mobile advertising is key;

2. A common framework for mobile page rendering and addressing. Since the beginning of 2008, there is strong evidence that the “m.” address is winning over “.mobi” but the industry has a long way to go on the issue of page rendering to ensure mobile compatible pages are presented to mobile users;

3. Customer profiling. Smart collection and use of subscriber information goes hand in hand with location information. Location can be seen as one of many targetting and profiling inputs. If you already know I am a 39 year old male, living in postcode W11 in London and I like gadgets and technology, the type of ad I am likely to respond to is fairly well defined. Layering this with real-time location information is icing on the cake, as I am most likely to respond positively to an ad that is targetted correctly and is sent to me when I am close to a location where I can take immediate action on the advertisement; and

4. Mobile location without GPS but instead using a mix of zone detection and handset based location. Existing location technologies available today, such as cell-ID from the network operator and GPS via the handset, are not suitable for mobile advertising on their own.


What are the barriers to handset based location services from Google and Nokia taking off?

As mobile operators add, remove, and change mobile cell towers, the quality of the Google and Nokia databases will suffer. There will come a time when enough Google Mobile Maps users have essentially re-surveyed the area – at no cost to Google – and corrected errors in the database. However, this process will take valuable time that even Google can’t afford.

Put another way, Google will have to plug the holes in its database quickly and accurately – otherwise it risks losing users who are likely to vote with their feet when the device display tells them “Your current location is unavailable”.


Location + mobile social networking = mobile 2.0

One area that will benefit greatly from the advances in location technologies and services described above, will be social networking services delivered to the mobile.

Mobile social networking is the natural extension from the web based versions of these major sites to the mobile. It is the mobile’s ability to provide real-time location, and in turn presence (“I’m seeing a movie in London”) that will provide a real boost to the mobile versions of these sites. I think it is unlikely that a mobile social networker will want to publish a map of exactly where they are for all to see but they may wish to promote where they are relative to their profile, community or local area.

So, instead of just being a cut-down version of the main site, the mobile version of a social networking website could add real-time value with presence from location services.

What is encouraging is that social network users are wanting to take their web 2.0 experience with them in a mobile web 2.0 way – and this is good news for the mobile industry as the social networking boom experiences another surge via the mobile channel.


Location goes mainstream in 2009

The real excitement for me is not about the cool services on the horizon, it’s the recent emergence of disruptive tools and technologies that allow content companies and developers to deliver location-enabled and presence-aware apps without having to rely solely on the mobile operators.

Now the building blocks are in place, we should see more adventurous location services emerge through 2008 and into 2009. Location based services is once again a space to watch closely.

This article was written for receiver

For more thoughts on mobile advertising, mobile location, and social networking visit Andrew Grill’s blog (London Calling) at andrewgrill.com/blog

Contact: Andrew Grill