As a result of the recent “locationgate” controversy (centering on Apple’s and others’ logging of the location of mobile devices as they are used by consumers) the location-based services (LBS) and advertising (LBA) markets have come under intense scrutiny, with privacy legislation a major focus.
However, ABI Research (http://www.abiresearch.com) believes that this temporary debate won’t prevent the future success of location-based services, marketing and advertising, all of which will be based on location analytics — the aggregation and analysis of location information to identify trends that will enable new services and more effective advertising.”
The firm forecasts size of the location analytics market to reach US$9 billion in 2016. At the moment, the initial LBA trials are largely focused on geofencing, with impressive results. However, the real power of LBA will come through social, geographic, physical and emotional indicators to filter advertisements to a specific user. The best way to combine these indicators and target them to individuals in a non-intrusive, anonymous way is through location analytics.
“While the location analytics market is relatively new, it has been evolving for a number of years and has been the major driver for recent location-related acquisitions by the likes of Apple, Google, Nokia, Facebook and Microsoft,” says ABI Research practice director Dominique Bonte.
Eventually, location will become commoditized and will be treated as just another piece of demographic information. Consequently, location analytics will become the core provider of value in location-based advertising.
— Dennis Sellers