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Here, there, and everywhere: knowing where consumers are can reveal a lot about who they are.

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Talk about being in the right place at the right time:When Natasha Leger debuted LBx Journal, the publication she cofounded, at last May's Where 2.0 conference, she thought of that first issue as a much-needed solution to a long-unaddressed problem--delivering, as she puts it, "location in the language of business."

Location-specific data is a relatively new concept, and the full potential of its enterprise value remains unclear, but the industry has rallied around the statistic that perhaps 80 percent of company data is location-oriented. Even so, traditional geographic information systems (GIS) have been expensive and proprietary, reserved primarily for companies with big budgets or mandatory location-based needs (e.g., utilities or communication companies).

"There's all this advanced technology, [and we] find all this information from a map perspective," Leger says, "but we're still fighting with [technology] to get real, actionable information out of our systems so that we can make better decisions."

Despite the value of location data, GIS has rarely been integrated with business systems such as CRM or enterprise resource planning (ERP). Anyone trying to understand how to tie location into the business, Leger says, had no place to go. "The business processes and systems--and even key performance indicators--haven't really been developed from a location perspective," she says.

LBx stands for "location-based x," a nod to the idea that "all products and services are connected to location. "Though the "x" is unique to each company (e.g., location-based inventory, advertising, product development, supply chain management), readers of LBx share one commonality in that they are the "non-techies," the chief "x" officers (CXOs), or the business managers--the people who need to make important decisions related to location.

Prior to launching LBx, Leger noted a rising interest in location at her second gig as president and founder of market intelligence and strategy advisory firm ITF Advisors. The uptick, she says, can be linked to the consumerization of location technology. More cars equipped with global positioning systems (GPS) or personal navigation devices (PNDs), kids printing out directions to their friends' houses, advanced-yet-user-friendly downloadable tools such as Google Earth--location was, literally, everywhere.

As with many Web 2.0 technologies, businesses struggle to balance the needs of managing organizational stability with innovation. The years of waiting, however, seemed to be coming to an end. "We all have this sinking feeling that the world is moving a lot faster than any of us anticipated ... or are even able to keep up with," Leger says.

HITTING CONSUMERS WHERE THEY LIVE (AND DO EVERYTHING ELSE)

While commercial GIS technology dates back to the 1980s with releases from firms such as the Economic and Social Research Institute (ESRI), Leger says it wasn't until the 2005 public release of Google Earth that location-data interest among business users really took off.

"Consumer technology is driving enterprise technology," Leger says, making the transition "a lot easier than we thought." The shift is most notable in the expectations younger generations have as they enter the workforce--specifically their belief that if they're able to navigate and customize a map at home, they shouldn't have to tolerate an archaic multimillion-dollar system at the office.

Traditional GIS applications typically work with industry standards such as shapefiles and keyhole markup language (KML), explains Tom Link, managing director at SpatialKey. However, he says, "those things are foreign languages to decision makers." Shapefiles originated from ESRI and KML from Google (or, more accurately, from Keyhole, which created the forerunner to Google Earth before being acquired by Google in 2004). KML is also the standard for the Open Geospatial Consortium (OGC), comprising 384 companies, government agencies, and universities that, according to the OGC site, aim to "geo-enable" the Web, location-based and wireless services, and other technologies.

Some decision makers, however, have ambitions that are far more mundane. Armed with simple, lower-priced options such as SpatialKey--which can use (but don't need) shapefiles or KML files to visualize and interact with data on a map--these executives merely want to make sense of the explosion of location-based data landing in their Excel spreadsheets, a newfound bounty attributable to the rise in geolocation-enabled smartphones.

These devices are helping to popularize geolocation by enabling, for the first time, access to location-based data at any given moment at the user level. According to predictions made by ABI Research in the third quarter of 2009, 1.1 billion smartphones were expected to ship worldwide in the calendar year. That would represent a slight decrease from the 1.2 billion shipped in 2008--not bad, analysts say, given the economic recession. More important, however, is the fact that ABI estimated that 21 percent of all handsets shipped by the end of 2009 would have GPS capabilities.

The mass market is increasingly embracing technology once reserved for geeks, especially as prices continue to drop. According to ABI, the share of smartphones that cost less than $200 was only 18 percent in 2007--but that figure is now 27 percent, and is expected to rise to 45 percent by 2014."We may never see a $30 smartphone," said Kevin Burden, ABI's mobile devices practice director, in a press release, "but over time, smartphones will take a substantial part of the mainstream handset market."

"The most obvious, or most visible, way you can see how popular location is becoming is the number of location apps in the different smartphone-application stores," says Dominique Bonte, ABI's practice director of telematics and navigation. As of September 2009, location-based services provider Skyhook Wireless identified more than 4,000 location-based applications for the Apple iPhone App Store alone (out of roughly 100,000 applications total). Skyhook also noted more than 700 location apps in Google's Android Marketplace, as well as others in Nokia's Ovi Store, BlackBerry App World, and the Palm App Catalog.

As location capabilities grow more prevalent on phones, PNDs may be suffering as a result. "It's going to be difficult to convince consumers to pay for that additional service," Bonte says, adding that a "converged revolution" may make smartphones the Swiss Army knife of applications. "There doesn't seem to be a limit to the creativity," he says.

In late October 2009, the International Telecomunications Union projected the number of mobile subscribers to reach more than 4.6 billion worldwide by the end of 2009, far eclipsing the number of Internet users (fewer than 1.7 billion, as of June 2009). Carriers, handset manufacturers, and application providers all have tremendous amounts of data about where the customer is--data extremely valuable when it comes to personalizing the customer experience.

Data acquisition wasn't the obstacle, nor was the task of analyzing any given data point. "It's very easy to use one location point," says Greg Skibiski, chairman and chief executive officer of four-year-old geolocation services provider Sense Networks. "'I'm here and now find me the nearest pizza place' is super-simple."

On the other hand, making business decisions based on location was "impossible for anyone to do four years ago," Skibiski recalls. "It was much harder than we thought to analyze this." The real challenge, and why Skibiski suspects location data took so long to catch on, is the sheer quantity. "There was too much data to store," he says. "No one wanted to dig into it." To make matters worse, Skibiski says, the tools at the time weren't accessible to anyone without specialized training in geolocation, and the infrastructure simply wasn't scalable.

MAPPING OUT CRM

When GIS first emerged, no one thought about connecting it to targeted advertising, but Leger says that marketing and advertising have become perhaps the strongest drivers. In fact, she adds, location may become "the new common denominator," especially for predictive modeling.

Companies are already using weather reports and analytics, but overlaying the information on a map enhances visualization for better decision making. For instance, a food-and-beverage company interested in real-time ad placements can integrate real-time weather information with the location of each campaign. In cities such as Denver, where Leger is headquartered, the weather can fluctuate between 80 degrees and sunny one day, and 40 degrees and snowing the next. Marketers can regulate the messages being delivered so consumers aren't hearing a radio ad for hot soup when the temperature is at a record high.

Market research, too, is enhanced when social networking is merged with location data. Real-time photos uploaded to sites such as Yahoo!'s Flickr can be geotagged to provide a more dynamic understanding of where people are visiting than, say, a post-trip survey.

Bonte says that location history is even more important than current location. "They call location history the 'fingerprint' of human activity," he says. "Nothing else is so accurate in describing what individuals have been doing."

Alistair Goodman, chief executive officer at advertising-services provider 1020 Placecast, certainly agrees. Goodman says his company has spent the past four years building a platform that has the "largest, cleanest, continually updated set of location data"--based on everything from GPS and cell-tower triangulation to neighborhoods and airport destinations. "Anywhere we know of," he says.

"We've begun to build a rich understanding of locations all across the country," Goodman adds, noting that the system profiles places, not people. In fact, the company made the fundamental decision to collect no personal data whatsoever. "We can only be in one place at one time and where we are reveals a lot about who we are and what we're interested in," he says.

Retailers using Placecast's mobile marketing solution ShopAlerts specify an imaginary polygon, or fence, of any size around their physical trading area. When any consumer who has opted into the service enters that zone, she will be alerted with an SMS, email, or display advertisement that's customized on the fly. On phones with a Web browser, addresses can link directly to a map, and phone numbers can be click-to-call.

At press time, American Eagle and several other retailers were beginning to launch initial runs of the solution for the holiday season. "Retailers are getting it now," Goodman says. "We can finally connect the Web and digital to the physical world." CRM data, though, isn't yet integrated into ShopAlerts. Retailers have expressed interest, Goodman says, and Placecast is exploring this opportunity, but he acknowledges there's "a lot more to learn about how to do this in a way that consumers are going to find valuable rather than intrusive."

Sense Networks offers a seemingly opposite perspective on location-based targeting. "I don't care if you're in Tulsa or New York," Skibiski says. "If the attributes are the same, it's the same to the computer. We take the location data, remove the location from it, and replace [that] with meaning that a marketer can do something with." In other words, a 20-year-old boy and a 70-year-old woman searching for a clothing store from the same street corner may receive identical, generic results; soon, though, they'll receive personalized information.

Sense Networks' Macrosense platform takes in an exorbitant amount of data to understand everything from the basic longitude, latitude, and time, to demographic data (Is the area rich, poor, ethnic? What is the educational level? Is it a red or blue region?) and regional data (Are there farms, financial services buildings, or bars in the area?). The technology looks at the environment and the people nearby to segment individuals into "tribes." (See sidebar, "Collision at the Intersection of Real Street and Digital Avenue," above.) Skibiski compares the technology to Google's parsing of inbound and outbound links to understand the context of any given Web page. "We do that for the real world," he says.

Skibiski claims the technology builds models automatically and can identify behaviors better than human interpretation. Someone who goes to a different bar every other night, for instance, is much more likely to be an influencer compared to someone who goes to the same bar over and over again--good to know for a spirits company. "It's funny what comes out of our system," he says. For example, the system has identified various activities that correlate with customer churn: when those around them are churning, which likely suggests exposure to similar influences; increase in entropy (e.g., the disruption of a home-work-home travel pattern) points to a possible life change; exposure to penitentiaries, which suggests the customer is going to jail.

This knowledge comes in handy, particularly for the prepaid mobile carriers that don't have the advantages of acquiring customer addresses, demographics, and even social security numbers, like the post-paid carriers do. Prepaid plans are one of the fastest growing segments in the mobile market, Skibiski says, but carriers have little to no insight on their customers. By looking at where customers are going (e.g., what neighborhoods) carriers can hone their marketing strategies to target the desired demographic--say, the affluent group. By identifying the most-affluent customers and only delivering offers they would find highly valuable, carriers increase the probability that those customer will refer other wealthy customers.

"We don't realize how stupid our mobile phones are right now," Skibiski says. "Why doesn't my phone know that I'm hanging out in this place, at this time, and 80 percent of people like me in this situation did this?" He imagines an Amazon for the real world, powered by the mobile world, but because no one has achieved that yet, everyone's competing to be the victor. The end result could be revolutionary. "Map applications and all the stuff on mobile today," he says, "that's just at level zero."

THERE YOU ARE

According to Bonte, mobile advertising is in an early phase--claiming no more than 10 percent of total advertising budgets. (And most of that is spent merely translating the online world--i.e., display advertising--to mobile.) Where Bonte sees the real value of mobile advertising is in the ability--similar to the promise of Placecast's ShopAlerts--to trigger consumer action on the spot. Advertisers, he says, are willing to pay more for the higher returns associated with that level of interaction. All that stands in the way? Privacy concerns and issues around abuse of personal information.

Paul Hallett, chief executive officer of digital destination guide and mapping solutions provider Schmap, sees a clear distinction between privacy and security. Privacy involves users of an application or service not wanting outside parties to know their information. Security, on the other hand, is often an issue of unknowingly exposing oneself to risk.

Twitter unveiled a new geolocation feature to its platform last August, allowing developers to build longitude-and-latitude options into any tweet. Users will not only see the location of tweets sent by those they follow but even tweets from a particular neighborhood or city. Cofounder Biz Stone emphasized that the feature is turned off by default and users will need to activate the location feature--perhaps on a tweet-by-tweet basis. Moreover, data will only be stored for a limited time.

The notion of people knowing where you are at a given moment may be unsettling, but the industry is aiming for standard policies (e.g., consumer opt-ins) and a framework around the capture and utilization of location data. "We're not there yet," Bonte says, "so there's still a lot of suspicion."

Concerns may be generational, as younger consumers are far more comfortable with sharing their information online, especially if there's a value-add. Foursquare is a mobile application that integrates social networking, mapping technology, and a gaming aspect, allowing people to not only share their locations but see where their friends are and compete for status. In a blogpost about the application, Greg Sterling, founding principal of Sterling Market Intelligence, points to the niche appeal: Foursquare, he writes, "has the potential to be a 'cult-like' hit with a select demographic group (read: college and early twenties) that goes out a lot, is intensely social in groups, and has time on its hands."

For the rest of the world, geotargeting may just take some getting used to. Leger isn't worried about consumer fears hindering growth and cites the adoption of Facebook as an indication of cultural shifts: Initial privacy concerns didn't stop 50 million new users from joining Facebook between April and August 2009, expanding membership to more than 300 million worldwide--or stop another 50 million from signing on by late November as Facebook's population crossed the 350 million mark and eclipsed that of the United States.

Each individual identifier in the client data analyzed by Sense Networks has been replaced with a code that only the client can decipher--once the data's back in the client's database. "You never want to store anything that's unique about somebody's place," Skibiski says. "Take the data in real time, process it ... then delete the data so it's never sitting around." With that policy, he says, privacy becomes a nonissue. Sense Networks, in fact, declared a "New Deal on Data," giving customers the full rights of possession, use, distribution, and disposal of their information.

"The issue right now is that people don't know because they never thought about combining this in the past," Leger says. "Privacy needs to be addressed but it's not clear what the real answer is right now." With more information, people and companies are empowered to make better decisions, but the good things rarely come without the bad.

Bonte brings up concerns around crowd sourcing, where, for example, how fast people are moving can be collected en masse and used for public services like real-time traffic reports. While the information is not necessarily private, it does bring up concerns around being tracked, and whether drivers should be rewarded for their contribution.

In a reverse perspective, location intelligence also gives the consumer insight into the company's activities. User-generated networks, social media platforms, Web content, and mobile content, combined with location information, can be aggregated to create transparency in the organization. Just as companies can learn more about their consumers, consumers can, in turn, learn more about the companies they work with. "If your customer has become more location-savvy than you," Leger warns, "then you'll need those systems in order to keep up with your customer."

Hunting Down Disease

How Sense Networks' mobile-tracking service is helping to fight tuberculosis

Infected patients being treated at Helen Joseph Hospital in Johannesburg are asked to opt in to the program, permitting Sense Networks to track their travel patterns--all while the individual remains anonymous. By monitoring their movements, the system can determine where the individuals travel to most often and whether there are any commonalities in their patterns. In doing so, Sense Networks can identify highly probable locations where an outbreak might be occurring, allowing the medical team to send aid to those regions much more quickly.

"If you can find and identify an outbreak just one week earlier," says Greg Skibiski, chairman and chief executive officer of Sense Networks, "you're saving thousands of lives."

Time to Clear the Pipes

A location-based time-tracking solution keeps Roto-Rooter technicians flowing smoothly

Xora provides mobile resource management (MRM) solutions prevalent in the "guys-in-trucks verticals"--service technicians, for example, or food-and-beverage delivery personnel. Companies use the technology to keep track of their workers, vehicles, and other assets in order to optimize service delivery. Moreover, the solution unchains employees by enabling them to activate their time cards via mobile devices--a concept also referred to as "punch to paycheck."

Fleet management may be old news but, according to Dominique Bonte, practice director of telematics and navigation at ABI Research, more companies are trading their dedicated devices for mobile handsets and running applications there. Along with many other benefits, the shift has made it easier for smaller companies to take advantage of location-based services.

With Xora's etrace, a time-tracking solution built on the global positioning system, plumbing company Roto-Rooter was able to optimize the performance of its 1,800 field service technicians. Armed with location data on every technician, the service provider can now monitor job performance and ultimately decrease customer wait time.

Since implementation, Roto-Rooter has been able to dramatically reduce its call centers from 60 to three. Moreover, job close-out times have been reduced from 20 minutes to 90 seconds by using the etrace SmartTalk voice menus that have pricing databases and business rules to streamline invoices. Point-of-sale capabilities allowed workers to collect payments directly from customers, thereby eliminating paper forms for an annual savings of $140,000.

Collision at the Intersection of Real Street and Digital Avenue

Emerging technology maps individual movement patterns onto a social graph

As creatures of habit, people reveal a lot about themselves based on where they go, what they do, and who they interact with. At the 2009 Where 2.0 conference, Alex "Sandy" Pentland, a professor at the Massachusetts Institute of Technology and cofounder of Sense Networks, demonstrated technology that maps individual movement patterns onto a social graph.

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Pentland's presentation, "Reality Mining for Companies: How Social Networks Network Best," pointed to applications of the service with regard to corporate strategies (Why isn't customer service involved in discussions to improve the customer experience?), employee satisfaction (increasing face time among employees has been shown to increase productivity, especially creative productivity), and even community development (high rates of interactivity among neighbors have been associated with prosperity).

"The fundamental [objective] is moving from [a] static view of the world to a dynamic view of how an organization really works," Pentland said.

As a final thought, Pentland emphasized the ongoing concern of privacy, reiterating points delineated in his company's "New Deal on Data." Nevertheless, regulations have yet to be explicitly defined. "You should all be creeped out," Pentland said. "If you're not, you weren't listening."

Contact Associate Editor Jessica Tsai at jtsai@destinationCRM.com.
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Title Annotation:GEOLOCATION
Author:Tsai, Jessica
Publication:CRM Magazine
Article Type:Company overview
Date:Jan 1, 2010
Words:3588
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