Convergence Of Smart Phone Affordability And Broad Network Access Drives Growth In Location Based Services

I’ve been a big fan of location based services (LBS).  In fact, many of you have followed my whereabouts on Yelp, Tripit, and other integrated Twitter services.  As many of you know, location based services take your geographical position from your mobile device and deliver relevant information services based on your relationship to people, objects, places, etc.  In the 2010 Pew Research Pew Research Center’s Internet & American Life Project, surveys showed, 4% of Americans utilized Location Based Services (LBS) (see Figure 1).

Figure 1. Layar’s Augmented Reality location based service (LBS).

Layar - Augmented Reality and Location Based Services

Constellation Research, Inc. estimates these services to grow and generate up to $10.7B in revenue by 2013.  Among the early adopter set, LBS is on fire.  Among the general population, growth will most likely trend with smartphone adoption, which market research firm IDC estimates a 55% growth from 2009 to 2010 (~270 million units).  You do the math!

As one of those early adopters, I and many others have enjoyed LBS from a consumer tech point of view to:

  • Navigate around places.  Use turn by turn navigation and traffic maps through services such as Google Navigation and Yahoo! Maps.
  • Identify events to attend. See where my friends are by date and location to make time to catch up using Loopt, Rummble, and Tripit.
  • Locate friends near me.  Catch up with people near me using Foursquare and Gowalla as a matter of convenience.  In some cases, track people by mobile device location.
  • Reduce traffic fines. Warn and be warned where speed traps, sobriety check points, and cameras through crowdsourcing apps such as Trapster and Phantom Alert
  • Find places to eat.  Follow foodie friends to see where they check in on Yelp.
  • Receive offers from merchants. Get rewarded for checking in to locations with discounts from merchants.  Take advantage of M-commerce (mobile).

We’ve also helped many of our enterprise clients use LBS for business scenarios such as:

  • Finding people. Skill levels, experience, interests are key attributes. Imagine a nearby emergency scene that requires a Portugese speaking medic within 5 miles.
  • Finding things. Parking spaces, meeting rooms, stolen phones are key examples.  Imagine the need to optimize parking space management, finding empty conference rooms, etc.
  • Tracking resources.  Passive sensors can locate objects with AutoID devices, RF Tags, and other signals.  Imagine tracking of truck fleets, taxis, doctors, service people, equipment, etc.
  • Notifying people and objects. Both a push and pull model can be used to match needs.  Imagine automated check-ins, targeted advertising, safety warnings, automated payments, etc.

Net:net there are some great benefits at hand as the convergence of mobile, analytics, social, and cloud will create new profit pools in value added services and more personalized stakeholder experiences.

Yet, Privacy Polices And User Control Of Personal Information Remains The Key Issue Why I Quit

Despite the great convenience and benefits, there are many risks to publicly sharing your location information.  Frederic Lardinous at Read Write Web talked about the dangers of being robbed through location based social networks via sites such as Please Rob Me.  In April 2010, Melissa Jun Rowley posted on LalaWag about “FourScare and FourScammed”. Meanwhile, Michelle Greer at Silicon Angle brings up good points on legal rights with geo-location services.  In fact, I caught my neighbor stealing my paper a month ago.  I tweeted I was somewhere else and he promptly came by to remove the goods only to be surprised as I opened my front door.

Now that’s not the reason I’ve resolved to stop using these services in 2011.  In fact, there are three key reasons I don’t feel like helping to recreate The Matrix:

  1. Lack of control of my personal information. While a few sites have good granular controls for where and how I share information (e.g. EchoEcho, Loopt and BrightKite), most app providers lack key features such as permission based requests, easy to use security interfaces, and granular blocked lists for groups and individuals.
  2. Minimal awareness on who’s using my information. Too many people have access to my personal information.  Just believing that a third party won’t resell or leak my information is not good enough.  These third parties often do not seek your explicit consent.
  3. Non-existent adoption of industry privacy standards. Even though the wireless association CTIA has put out best practices and guidelines, few LBS providers have adopted all the standards.  After all, these are voluntary and lack teeth until adopted by the FCC.  Orthogonally, the Web Analytics Association’s Code of Ethics still needs to gain broader adoption.

The Bottom Line: Enterprises and Individuals Must Demand Locational Privacy Rights

Call me a Luddite or old fashioned but we shouldn’t give up yet on the privacy debate.  Just because Mark Zuckerberg and some others feel that age of privacy is over, doesn’t mean we shouldn’t put up a fight.  We really don’t want to take away our locational privacy rights.   These are serious rights we are giving up for simple conveniences.

LBS is in it’s infancy.  We still have time to make sure our fundamental locational privacy rights are in place.  Apps providers, carriers, and other location based service and solution providers should quickly agree on end user privacy standards.  Yes, one may argue that you are providing a free service, but is it really free when you are selling our information?

We must have strong advocates to protect our privacy given the fast pace of disruptive technology adoption.  We must act soon.  There are two types of privacy that must be protected.

  1. Individual subscriber level. We need to control who, what, when, why, and how location data is used by an application and by third parties.  Opt-in should be the norm, not opt-out.  If you want to pay for my location, then be explicit.  Let me know when something is turned on.  Show transparency in how this information is being used.
  2. Enterprise corporate level. As part of an organization, we may lose our individual rights, but that doesn’t mean the corporation doesn’t want to mask where their employees or resources may be deployed.  In the middle of a merger, would you want to give away where two merger teams would be meeting?  If you are about to launch a new product or service, would you want certain competitors to know where key equipment would be placed?  No one wants misuse in location based information so enterprises should ensure that their corporate polices match with their location based providers.

There’s one more thing – I bet you the VC’s will start funding services that will protect and hide our identity again!

Recommendations:  For Those Braver Than I, Follow These Best Practices
Here are a few best practices I recommend to friends who are all in for location based services:
  1. Run a search on yourself. Use your favorite search engine to see what networks are exposed.  A quick check will show you what pictures, what locations, what information has been shared.  You can’t change the past, but you can stop the future.  If you want to confuse people, start checking into random places that make no sense, create few patterns, and hopefully confuse the algorithms that marketers and governments may use in the future.
  2. Default your location based services to disable. Many services automatically leave geotagging in “On” mode.  The settings should be set to opt-in as opposed to opt-out.  Keep track of privacy settings as some mega offenders such as Facebook go with opt-out not opt-in as the default.
  3. Get choosy about who’s in your social networks.  I am actually on Facebook.  But only those who I’d invite to my home to stay the night are on the list.  As you build out your social networks, be careful who you include in groups.  It’s more cumbersome to worry about what’s shared than keep a good list of who’s in or out.  Why not just include those that matter and leave it as such.  Another option, keep networks purpose built.  For example, I use LinkedIn for work, Yelp for foodie acquaintances, and Facebook for close friends.   We use a closed network at work and that keeps confidential information, well confidential.
  4. Understand that everything you do is on the record. As private as you may hope, nothing is fully private.  Think about what you post could be used against you in public.  Tying your home address with your kids school information with when you leave the house can be a recipe for disaster.  If you are going on vacation, don’t tweet from the destination as everyone will know you are out.
  5. Check in after the fact.   If you are avoiding stalkers or feel vulnerable, don’t check in before you arrive.  Those following could use that as an opportunity to confront you or engage you when you least expect it.  Better yet, don’t check in if you are worried.
  6. Donate to the Electronic Frontier Foundation (EFF). There are lots of organizations fighting the fight.  I’ve only listed one I just contributed to today.  Because locational privacy continues to be attacked by the rapid development of disruptive technologies, we need policies that not only protect us from the dangers, but also help us gain the benefits.  If you are in alignment with this point of view, donate here.

Your POV.

Have you used LBS?  Are you using it more or less in 2011?  Do you feel that the age of privacy is over? Add your comments to the blog or send us a comment at r (at) softwareinsider (dot) org or info (at) ConstellationRG (dot) com.

Please let us know if you need help with your business strategy in 2011. Here’s how we can help:

  • Disruptive technologies. Assessing the market for social, mobile, cloud, analytics, UC, and internet of things. Providing vendor selection frameworks. Comparing vendor capabilities. Negotiating vendor contracts. Providing independent validation and verification.
  • Next gen business models. Advising management teams and organizations on disruptive technology adoption leading practices. Designing next gen business models in Social CRM, digital marketing transformation, cloud adoption. social business, virtual commerce strategies, business process innovations, and cloud services.
  • Legacy optimization. Reviewing existing technology strategies for cost savings. Renegotiating existing maintenance contracts. Providing go forward optimization plans.

Related Resources

October 29, 2010 Australian Communications and Media Authority “Online Social Networking – Location Based Services”

March 23, 2010   CTIA – “Best Practices And Guidelines For Location Based Services”

February 25, 2010  Electronic Privacy Information Center – “Locational Privacy”

August 2009  Electronic Frontier Foundation – Andrew J. Blumberg and Peter Eckersley “On Locational Privacy and How to Avoid Losing It Forever”

May 13, 2008 O’Reilly: Where 2.0 – Sam Altman “Best Practices for Location-based Services: Privacy, User Control, Carrier Relations, Advertising & More”

Location Based Services Privacy Policies

Here’s a good list of some corporate policies that are in place.  If you’d like to build one with us, let us know as we have a few templates we can put to use.

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Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.