If you can recall the definition of social networks mentioned in my previous article about location based services value chain, SNs are: “…online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others.”[1] One thing draws my attention, it doesn’t mention that they must know each other or must have anything in common but sharing interest and activities.
Every morning, I drive over an hour to get to the office. Not only me, but all the other people who are at a stand still on I95 before 8AM. It would be fair to say that we share the same activity (moving at a snails pace on the highway) and we all share a common interest “to get there as fast as possible”. So in that sense we are a kind of social network, we just need the means to communicate with each other and organize our efforts to achieve a common goal. So, if there is a need, there is an opportunity.
Some people have their cellular phone integrated with GPS. Others have cellular phone and a GPS device in their cars. Let’s assume that your GPS device is a new one, and has Bluetooth capabilities in such a way that you can connect it with your phone. At this point we are a social network with the means to communicate.
Assume a nice LBS application developer put together a site for our social network – the “www.SpeedI95ers.com” (fictitious name at the time of publishing this note). If I sign up with SpeedI95ers then I will become what we called in previous articles a “data collector”. As part of my contribution to the network, I’ll transmit my current location every “x” minutes. My location is recorded at SpeedI95ers servers, processed, aggregated with other drivers information to calculate the average speed of my small portion of the road. As there are thousands of I95ers like me reporting, I’ll receive in exchange an accurate view of the road traffic status in real time.
SpeedI95ers developers are happy to see their network growing exponentially, and SpeedI95ers investor are chasing them with “Show me the money before I buy a server farm”
As Tim O’Reilly defined “Data is the next Intel Inside”. Now with the data in hand, let’s see a few possible applications. NOTE: As this is a business forum, I’ll address as much as possible the commercial side without entering in discussion about the technology.
So what would I pay for?
I look at my windshield and I think why my Satellite radio and my GPS can’t be only one device. I already pay for the satellite radio communication, and the road information can be a premium channel for a few dollars more per month. Wouldn’t be nice having your GPS calculating routes and changing the optimal route with dynamic data? Now you can sell the information to/through the Sat/GPS Company.
Here is another nice idea: I would like to save my appointments in my calendar with an associated address. As my phone has a GPS and knows where I am, I will pay a premium price to have my calendar notifying me “Hit the Road Jack” as it knows where I need to be next and the current status of the traffic.
I can continue with many more, delivery routes, movies, etc. But you get the idea.
A few words about privacy. This is a huge concern for many people. What if they use my info to know where I’m all the time? What if the police/insurance companies subpoena my usual speed habits? Technical problems, technical solutions – assure your customers that collected data is ripped of any personal data before it comes to the servers, and once aggregated you save ONLY the aggregated values and NOT the individual contributions. Meaning there is NO individual histories. Information is money, but don’t be so greedy. Most importantly, make sure you have a good Privacy Advocate on board that can direct the company to good business practices.
The business of combining old with new is complex, and requires out-of-the-box thinking. The solution presented in this post can be easily combined with other mobile 2.0 models and strategies presented before.
Can you see the new solutions coming? How can you monetize them? Did you consider milking the off-line cow?
More to come – but I would appreciate your comments.
19 Comments
Comment by Javier — December 30, 2008 @ 6:32 am
Sounds great Claudio and consider a subsidy for a subscription of the service via banner advertisements which has recently commenced in Australia.
Comment by Wbyte — December 31, 2008 @ 2:56 am
Hi Claudio, i think it will work especially when you follow the same route every day. The question i have what are the charges for me as a subscriber for sending every x minutes my positioning. I think that this service would fit perfect as a part of a package but would be difficult to make it profitabelon on it self.
Comment by Julian Bourne — December 31, 2008 @ 12:44 pm
Hi Claudio,
I love the vision and the “hit the road jack” description.
Check out an award winning product called Prompt (http://www.proxpro.com) . Proxpro’s patent pending product has optimized real-time traffic and GPS navigation to the mobile calendar. “On time every time” features make sure a driver is never late due to traffic. Prompt (beta) is available in the US / Canada on certain BlackBerry devices and is extremely accurate.
I agree that this is a premium product. Research shows that being late damages business relationships; sitting in traffic has an opportunity cost; and rushing can cause erratic driving.
Thank you for the post.
HAPPY NEW YEAR,
Julian Bourne
CEO and Founder,
Proxpro Inc.
Try award winning Prompt – Be On Time Every Time
Comment by Beth Harrison — January 1, 2009 @ 4:15 pm
I think Dash http://www.dash.net/ was trying to achieve something similar… dash users create community to share info & communicate dynamically including traffic updates & routing suggestions. I had heard that the venture folded, but not sure
Comment by Andrew Turner — January 2, 2009 @ 9:21 am
@Beth – Dash has stopped manufacturing their own hardware component, and instead will be providing the infrastructure and software to other PND developers.
@BDNoozyour – pretty good list. Major ones you missed are WhereYouGonnaBe – I’m mixed on the name, but the concept of better connecting through trajectories is interesting. It doesn’t so much matter if I’m near someone at this moment when I may be busy, but if a system lets me know that we’ll be crossing paths in the future, we can plan for that.
You should also consider Dopplr and Tripit. And in general, I think this is the better trend. Not building Geospatially focused social networks – where location is the first and foremost component – but instead location will become a key underlying component of *all* social networks.
Comment by Philip — January 2, 2009 @ 11:40 am
Please feel free to check out the new beta of Traffic.com (http://beta.traffic.com/Miami)
Sign-up for MyTraffic and create your drives. It’ll then provide you with real-time alerts about traffic conditions, incidents etc.
Let me know what you think about the service.
Comment by Jayant Ramchandani — January 2, 2009 @ 5:41 pm
Hi Claudio – You make a great case for an LBS apps to capture vehicle position inputs and provide an accurate view of the traffic conditions.
The application of GPS for LBS certainly has a bright future but there are some limitations when we focus on indoor applications.
I have been working on a slightly different application of traffic patterns — foot traffic in physical retail stores — for the past of couple of years. In the retail environment GPS may not be as effective because you need to know where people are exactly in a store — down to the last 3 meters.
We call this “Presence Marketing.” Presence Marketing captures in-store shopping behaviours and delivers targeted marketing messages that influence buying decisions as they are about to happen (consider this another type of LBS). And I believe the only way to accurately deliver these types of messages is with Active RFID.
I would be happy to elaborate on this with you if you like.
Jayant Ramchandani, COO
Novitaz Inc.
Comment by Claudio Schapsis — January 3, 2009 @ 6:52 pm
Thank you so much for all your input. I’ll try to address some points mentioned here.
@ Javier – You got the idea
!
@ Wbyte – The idea of the service relies on the information coming from thousands of users that are not necessarily following the same route. It’s like a big canvas, and every one is adding a small spot of color every day – most probably the picture will be completed for the benefit of all. Regarding the profit, as I mentioned in previous posts, the whole idea of social networks business models is to provide a free service in exchange of data collection. The challenge is to find the right buyer for that data.
@ Julian. Really like the product idea. I’ll try to get a Blackberry to try it. Any other platforms on the way?
@ Beth Do you have more info about the reasons they folded?
@ Andrew. Thanks for the comment. I checked WhereYouGonnaBe in the past. This application is based on the manual input of future location – like a trip planner – rather than based on your current location. Both are valid models, but my list was focused on the latter. I agree with you, Location became one important component for every social network (see my post on “the Case for LBSN”). Many wrote me about the “future location” type of networks – I think you convinced me that there is a merit to include those in the list. THANKS!
@ Philip. Nice site. Where is all the underlying information coming from? I assume it’s not from user data aggregation, isn’t it?
@ Jayant. Thanks for your comment. You are right. GPS is not effective indoors – and as you mentioned is not intended for the type of applications you describe. RFID is indeed the right solution. In the past I was looking into a business model that included a broad concept of contextual marketing having RFID as part of the store credit card. The idea was to deliver not only targeted marketing messages, but to provide employees directions on what merchandise to show a specific customer, based on past purchases (item, prices, quantities). Other applications included kiosk monitors at the entrance where the customer receive recommendations, sending SMS about the arrival of new merchandise and much more. This is a hot topic. If you want to send me something more elaborate, we can post it here. I’ll also pass it through one of my networks MENG (Marketing Executive Networking Group) that associates senior marketing executives around USA.
Comment by Shaili Jain — January 4, 2009 @ 9:37 pm
A powerful use of realtime location data is to aggregate this geodata and analyze it to identify & predict consumer behavior. You mentioned a few examples in your post including p2p based traffic analysis and forecasting. Other uses include: ROI analysis on outdoor advertisement & retail marketing; social navigation (discover where people are hanging out this evening, forecasting these crowd-activities and planning for it etc.).
Take a look at SenseNetworks who are doing some interesting work in this area. Jayant’s work at Novitaz sounds interesting too.
Comment by Dion Lisle — January 8, 2009 @ 3:39 pm
I like the idea – but has anyone noticed that when you go to mobile shows CTIA / GSM etc. SMSs take forever and phone calls fail frequently. That is because the pipe is full. Well if everyone on Hwy 101 here in Silicon Valley had this – the pipe would be full. I like the idea, but unlike internet, i think the wireless bandwidth issue would prevent complete success. Yes 3G helps, yes all of the other clever technologies will help, but ultimately there is a limited amount of pipe and if it gets filled with non-stop updates, basic communication will breakdown. Can this be solved in 2-5 years?
Comment by Jayant Ramchandani — January 9, 2009 @ 7:08 pm
Claudio, Appreciate the reply. Shaili, thanks for the pointer to Sense Networks.
When it comes to brand loyalty, Todd Morris, a Senior VP of Catalina Marketing says in his AdAge Article “Forget the old B-school nostrum that 20% of customers account for 80% of sales: It’s a gross overstatement even for mass-market package-goods brands. Only 2.5% of consumers account for 80% of sales for the average package-goods brand, according to a yearlong study of more than 1,300 brands and 54 million shoppers by Catalina Marketing, operator of the Checkout Coupon system”
In the case of Iams pet food, the 1% of consumers who account for 80% of volume spend $93 a year on the brand. And the 1.2% of shoppers who account for 80% of Budweiser sales buy a whopping $170 worth of Bud annually. Why is that??
It is because there is no way for brands to communicate directly to consumers in a retail store – where 70% of the purchase decisions are made!
What brands/manufacturers need is a mechanism to capture in-store shopping behavior and thereby quantify the reach of the in-store audience, much like the television channel knows viewership demographic or the internet captures session-metrics. Once this is done, brand manufacturers have a platform to deliver targeted in-store marketing messages that influence buying decisions as they are about to happen. What I would like to call “Presence Marketing”
Using Active RFID with a combination of mobile technology is the appropriate platform to enable Presence Marketing. A loyalty or credit card embedded with Active RFID technology would allow a card carrying customer to be identified the moment they enter a retail store. This would be done with the permission of the customer on an opt-in basis to address any privacy concerns. Active RFID technology would also allow the capture mechanism of the in-store “session metrics” – the browsing pattern of a shopper analogous to the navigation pattern in an on-line e-commerce site. And the delivery mechanism for brand communication would be the mobile platform.
Presence Marketing together with Social Networking could also heighten the effectiveness of brand communication within a store.
Here is how it would work at a department store. When a card-carrying customer enters the department store a brand-specific communication is sent to the mobile phone. Note, this does not include a promo or a coupon. It is meant to direct the customer to a brand display. Example “See the new ImPulse Premium Denim Casual Sportswear.” If the customer visits the ImPulse section a promo/coupon is sent to the customer. On the social networking side, this event causes the customer’s brand affinity score to increment. If the brand affinity score increases beyond a certain threshold then they are a candidate for being a “brand influencer” and the brand company is notified of this. The brand-affinity score would be a new dimension in the social graph connecting people with similar brand interests and enable word of mouth marketing.
The benefits of this approach to Presence Marketing for the brand company would be an increase in basket size through effective in-store branded communication, and any word-of-mouth marketing through brand influencers. For the retailer this would result in increased co-op marketing dollars, and increased same-store sales derived from effective brand marketing.
One closing thought I got from Mike Wittenstien “In my opinion 90% of marketing dollars are wasted. Why? Because we have to communicate to people who have no interest in a particular product or service when it is mentioned to them.” Presence Marketing allows for targeted in-store marketing to a desired target. Furthermore, the true value of Presence Marketing is that the targeted marketing happens when purchase decisions are about to be made – at the shelf!
What’s your view? We would love to know …
Jayant
Comment by Jeroen van Bemmel — January 11, 2009 @ 10:39 am
Jayant,
Your justification and rationale on why what you call “Presence Marketing” makes sense, are sound. However, I have a different view on the technology implementation and the corresponding eco-system.
In my view, ideally this would be based on the fact that most customers already carry a mobile phone. A public Femto cell in the shop will detect it, and for those customers that have opted-in your scenario kicks in.
In Europe, I believe consumers are more wary towards a system that would track and trace them wherever they go, without control. Here I would implement this using passive RFID tags ( initially distributed to customers, and once penetration of NFC in mobile phones becomes high enough reverse it and put an RFID tag in various places in each shop ). This gives consumers more choice and control over what information gets collected about them. Also, physically Active RFID tags are more bulky, they are more expensive and require batteries that wear out. Lastly, requiring customers to carry around an Active RFID card for every brand they have affinity with does not scale.
For the eco-system, there needs to be a place for the mobile carriers, doing more than just supplying the mobile pipe. The carriers could host the opt-in system and everything needed to comply with privacy regulations (such as giving consumers insight into what information is collected about them, the ability to correct such data, delete it, …)
Pingback by More on Business Models for GPS navigation devices, Location Based Social Networking and RFID applications | Location Based Services - Business Only — January 11, 2009 @ 11:09 pm
[...] would like to refer you to the readers’ contributions on my post on business models for navigation devices combined with social networking. There, new applications were exposed, a few questions remained unanswered (wireless guys, your [...]
Comment by Romi — January 14, 2009 @ 9:59 pm
Interesting post but I can’t see how this is different from what European and Asian Mobile Operators are already doing.
As your car passes along any road signals are being used to calculate it’s spend to determine cell tower hand over (amongst other things) anyway.
These are already being used to detect real time road speeds and this information is being fed into navigation systems so that customers get realtime directions.
To my mind this is inevitably why convergence will happen from PNDs to mobile phone based navigation systems. BUT this is already being done
Comment by Dorene Weiland — January 15, 2009 @ 2:10 pm
@Jayant Ramchandani
Jarant,
I must agree with Jeroen that individual store RFID cards are not practical for the consumer in the long run and since I always carry my mobile phone, and it already has RFID capabilities, that seems a natural. It will take some large stores to get it started though and they could offer the option to their customers at time of purchase, billing of store credit cards, or customer service counters.
The mobile operators offer a service to the retailer and control to the end user to monitor, add subscriptions to like services, and modify as desired. They also have many in-building advanceement options to offer the real estate holder to improve coverage and capacity, LBS improvements working with and without RFID, and new integrated applications that can work with common privacy policies and databases. like IMS (IP Multi-media Subsystem) and others. “Presence Marketing” enterprises and others can utilize customer, device, geography, and application specific data to create the apps that will drive their needs.
Bottom line, use the mobile phone and make it do what your business needs it to do. Everyone has one and keeps it with them. If you want to know more let me know, it’s what I do.
Dorene Weiland
Independent Contractor Consultant
Mobile and IP specialties
Comment by Jim — January 15, 2009 @ 6:14 pm
In mobile, 90 percent doesn’t have to be wasted. But you don’t have to waste 50 percent, either. It’s not just a matter of Presence, but inclination. And only one person can provide that – the customer.
These issues – privacy vs. discovery, ads vs. content, visibility, control – all of these were in mind when I first formulated what became Earthcomber. This works as a business model to those who can conceive advertising and “targeting” in a complete reverse current. Store owners get it pretty quickly.
You have to be willing to set aside the traditional view of ads as volume, exposure, and all the rules that go with it. Instead, we have to look at the value of appearing only to someone who is already interested in that specific thing, and who is near enough to consider making the transaction.
When the individual using the technology controls what appears to them, this also is a new and uncomfortable position for advertisers – or more specifically, advertising companies. They make big dollars by making big splashes and throwing around big numbers. There is still plenty of formats for brand-building and high-profile campaigns. Just not on mobile, for to slap banner ads on top of content is to waste the opportunity.
Pushing coupons in a grocery store probably comes off as a positive experience. However, random bargain offers lose appeal quickly with each step away from the store. (You walk by lots of stores you’d never have any interest to patronize. Even if it’s a two-for-one Arturo Feuntes cigar.)
The Earthcomber approach is, people set their own interest profiles, and GPS does the rest, matching at the database level which places have the things they want to do, to buy, to eat, to enjoy. When any place has something or someone that matches that individual’s interests, *ding!* They get an alert. They can open up details, or just keep going.
People who know mobile very well have played with Earthcomber and asked, Where are the ads? We have to point out that the information they were seeking, that served their decision-making, itself *is* the advertising.
Another factor to consider is to make the experience itself more than commercial. Like commerce is in real life: part of it. So, the “on business” profile somebody makes may contain as many non-paying items (post office, airport, etc.) as commercial listings (office supplies, coffee, WiFi, bank). The essence is, if a person regards a mobile environment as helping them with their whole personal agenda, they are likely to stay tuned into it longer than experiences that require lots of entry, or that assault them with (to them) junk.
So in this model, the advertiser is trading volume at high dollars and hit counts, and in return, getting maximum positive exposure for the most (as they say in ad speak) qualified prospects. And it’s priced lower – advertising as a utility cost. They don’t have to pay more to jockey for top place in search results. They just have to offer a really interesting and/or really close to where the user happens to be.
This still leaves open all the other avenues for making big, sensational impressions, but that once slice of the pie that LBS / mobile / personal interest gets you is what all advertising ultimately is about – a transaction.
- Jim Brady
Comment by Mobile advertising blog — January 20, 2009 @ 8:51 am
Hi Claudio.
It was very nice post and very useful to us. Pls do post more blogs.
Thanks
Comment by Danielle — April 6, 2009 @ 11:10 am
Haha ^^ nice, is there a section to follow the RSS feed
Comment by directory submissions — May 8, 2009 @ 12:08 pm
That’s an interesting article. I just wondered if you could tell me where to find more info on this topic ?
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