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For Sale By Google: Traditional Advertising. Price: Free


Google’s Location Based Advertising Storm

Google’s recent moves in Location Based Services (LBS) advertising are like dark clouds on the horizon, all moving toward each other, while they suck in energy and gain speed. The collective LBS world is becoming jittery, and for good reason. Google is redefining location based advertising and is setting the stage for a takeover of traditional advertising, using free location-based consumer functionality as effective and unobtrusive cover.

On October 12, 2009, well in-advance of predictions on this subject, Google ditched map provider Tele Atlas and rolled their own proprietary base map as fuel for the massive Google Maps engine. On October 28, they dropped the “free navigation bombshell” by announcing that the Android platform (running on approx 35 mobile phones, including the much-touted Droid) will feature no charge turn-by-turn.

Ads In Disguise

While the “Free Nav” story captured headlines and the stand alone navigation world is still reeling, few seemed to notice that Google added clickable, tracked POIs (Points Of Interest) on their newly copyrighted maps. With no search needed, business listings populate the map, based solely on one’s propensity to be in physical proximity to these listings. A consumer can redeem Google Coupons fed into Google by the merchants and make a (web) purchase through Google Checkout. The listings are packed with tracked functionality such as photos, reviews, click to call, website links, brands carried, average prices, etc. Google collects all the information from the actual business owners, through the Google Local Business Center (video link).

These on-the-map business locations are ads in disguise. They function like ads but look and function like free increased functionality. Google is proving, as it did with their turbo charged cash printing behemoths Adwords and AdSense, that location-based advertising carefully masked as contextually/location relevant functionality that improves the mobile user experience will be not only used by millions, but welcomed.

Recently, Ulocate Communications (the people behind the Where platform) dropped banner ads for their Where app via their new Spotlight program. Their users rejoiced! What they really did was change the format of the ad to look like a business location and the effectiveness of these “non-ads” soared by 3X!

“(Our strategy is to) provide a successful monetization tool that doesn’t compromise the user experience, but rather serves to enhance it,” said Lacy Garcia, director of marketing and communications at uLocate, Boston. “We have received positive feedback from users thanking us for removing ads, when in actuality we have not removed them but rather replaced them with Spotlight.”

The Secret Sauce

While brand agencies of record try to catch up, scramble to build mobile sites, or dive headlong into branded apps, a powerful, easy way to compete with Google is for LBS companies to provide platforms that allow national brands to leverage their secret sauce. Only the brand owns the right to use their mark and only the brand really knows where its locations are. Stores open and close and phone book databases for sale can be months or years out of date. While Google is smartly tackling the hardest part first (local businesses), there is an opportunity for platforms to target national brands with simple, tracked, branded POI programs.

Navigation device  manufacturers have been selling powerful drivers of incremental store visits, without taking advantage. Connected PNDs should all be, at least, tracking POI search display and counting the consumers directed to these business locations. Every off or on-board navigation application should be doing the same. Even if they are not used to hit up brands for ad money, these metrics are powerful proof to the power of infusing maps with Alternate Value-Add and these metrics will be important when new programs are rolled out to brands that do not want to park their entire LBS marketing budget in one Google parking place.

Metrics Now For Money Later

Google is collecting metrics regarding the effectiveness of these branded locations, for the future. Google controls what businesses are displayed, and to whom. Imagine the value proposition of a program with a proven track record of driving real consumers into real businesses, versus to their websites? Imagine the impact of removing a business from a Google LBS advertising program, once it is established and Google can prove the impact of ending participation?

While Google has populated the map with generic icons for now and is not charging the business owners for being on the map (literally), it will not be long before we will see their Ad Extensions program kick in, allowing advertisers to upload entire store location lists, with brand icons, and link them into tracked performance-based campaigns.  These icons-as-ads will infuse powerful cooperative name brand recognition into Google Maps and will be a potent new weapon in the Google ad arsenal.

Like a bullet shot in the vacuum of space, most navigation devices and platforms are fired once (at the point of sale) and then speed off forever, loaded with untracked POI searches and untold millions in incremental revenue generation, with very little of it currently tracked or measured. These platforms can and should take advantage of their user base and the fact that millions of business locations are being delivered today. Smart agencies will seek out these opportunities to partner with the platforms now, so their brands can learn and actively participate in shaping how the programs evolve and the agencies can offer their clients more than just an integrated Google campaign, going forward.

A Google Future Based On Percentage Of Incremental Sales

The real end-game could be for Google to collect a percentage of actual, tracked sales via Google Checkout in real stores. Forget pay per click or run rates on text ads (or Google/AdMob’s banner ads) that drive traffic to websites, the Google “non-ad” model fueled by the “secret sauce” of brand plus location could-well lead them to a future where the business only pays for incremental actual converted sales. It’s not a stretch to imagine Google actually giving their much-anticipated Google phones away for free, with subsidized carrier plans, to enable the armies of millions to go about their daily lives while their phones get smarter and deliver opt-in services and offers and what they want when they want it. If they can make more off the phone in advertising based on a percentage revshare of actual proven incremental sales than the device sale or the Carrier use fees, why not lower the barrier to entry completely? I doubt the Carriers care if Google or the consumer pays them. Then there is the 700 MHz spectrum Google won at auction…

A Google Future That Is Already Here: Google Favorite Places

A missing link in the “tracked incremental sales based on location” future is already here. It was announced yesterday Dec 6 and it’s called Google Favorite Places. It is hard to overstate the potential power of this new Google program and I hope the LBS world sees the potential impact it has. While I thought sneaking in branded POIs on their new maps was big, this is far-bigger.

As I type this, Google QR (Quick Response) code store front stickers are being shipped to nearly 200,000 Google Local Businesses. These are those funny rectangular 2D barcodes you see on packaging and they will allow a consumer to stop in front of a business, scan the barcode with a smart phone and access time-sensitive specials, brands sold, coupons, reviews, photos, etc. Imagine the power of knowing that a specific consumer was standing in front of your store and when and if they came in and took advantage of the information on the Google listing in the form of a redemption! If Google Checkout was used, they could obviously track sales volume and whether or not the promotions on the Google listing correlated to what was bought. Imagine the impact of this to local businesses, let alone national brands?

Cost to the business? Free. Cost to download the $1.99 barcode reader for the first 400,000 that access it on the non-Google iPhone App Store? Free (courtesy of -you guessed it-Google). Cost to download the barcode reader on the Google Android App Store? Free.

Speaking of national brands, Google announced today (Dec 7th) that inventory control systems will be fed into Google search for a “Near Me Now” functionality element that will allow a consumer to locate a specific item and find the nearest location that has it in-stock. Once found, a user can use the new Google Goggles to obtain more information about a product.

By giving away all this functionality, Google takes the wind out of the sails of those who might complain about seeing advertising within a paid-for service. Google can then hook consumers on the fact that the advertising is not only non-intrusive and contextually relevant but is linked to location and behavior in a way that actually enhances the user experience, allows the platform delivering the location based “non-ads” to seem smarter and more intuitive, and drive a gold mine of metrics up the rainbow into the Google cloud.

What Can Be Done

What does this all mean? The navigation platforms should seek ways to track metrics using the POIs they deliver today and be working with brands to populate their platforms with ads that do not look like ads. Agencies need to provide innovative solutions and teach their clients about the larger LBS environment, versus simply plugging them into banner ad networks for mobile or building iPhone apps.  It means the collective Western LBS industry should look East to see the future, if they cannot see the Google storm front yet. Companies like NTT DoCoMo have been pioneering tracking incremental sales for years and most people in Japan now use their phones to make purchases.

Advertisers and brands and agencies and platforms all need to watch the LBS horizon to learn from what they see coming and use this impending front as incentive to create and offer local and national brands innovative solutions that can be shown to be effective, as the Google clouds gather and build.

_________________________

Wilson Kerr is the founder of LBS consultancy Location Based Strategy, LLC. www.LBStrategy.com

Wilson@LBStrategy.com    iPhone: 303-249-2083 (BOSTON)


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More Stories By Wilson Kerr

Wilson has 11+ years experience in the Mobile and Location Based Services (LBS) space. Recently, he became Director Of Business Development and Sales for Unbound Commerce, a Boston-based mobile commerce solution provider. He has deep expertise in the areas of mobile commerce, social media, branded location integration, branded content licensing, and is knowledgeable in a broad range of navigation technologies. Wilson has worked with top tier brands, content providers, device manufacturers, and application developers, including Nokia, Unbound Commerce, Tele Atlas/TomTom, The Travel Channel, Langenscheidt Publishing, Intellistry, Parking In Motion, GPS-POI-US, and others. Wilson is a blogger on all things location-based, edits the LBS topic page on Ulitzer, teaches a Social Media 101 class, and has served as a panelist and speaker at Mobile LBS conferences and networking events. Wilson has held positions in Business Development, Sales/Marketing, and Digital Licensing at The North Face, Outdoor Intelligence, Fishing Hot Spots Maps, Tele Atlas North America/TomTom and, most-recently, Unbound Commerce. Wilson left Tele Atlas to start Location Based Strategy, LLC in 2007. Company Website: http://www.LBStrategy.com. Twitter: @WLLK