This article presents an additional business model associated with a Location Based Social Network, this time applied to a mature market – your automobile GPS devices and fleet management.
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Another Location Based Services – Social Networking Business Model – Old meet Web2.0
Sunday, December 28th, 2008Location Based Services Value Chain – Part 3 – Business Models for Location Based Social Networking
Monday, December 15th, 2008From conversations I had with friends and colleagues, I believe this will be the first of a series of “last parts” regarding business models for Mobile Location Based Services.
I’ll assume through this post that you have read the preceding articles (LBS Marketing Concept / Value Chain 1 / Value Chain 2 / Location Based Social Networks 2.5) as many of the keys for further business models discussions reside there.
In my first post I defined the “Location Based Service concept” as the company’s effort to transform geographical positioning information into valuable and relevant data for a customer, to make a profit. The question here is: who is the customer that is willing to pay for that data?
Tim O’Reilly defines in “What is WEB 2.0” Data is the next Intel Inside and he presents a key question: Who owns the data? And I would add, What Data?
In the following Business Model the LBS service provider owns the data. I reviewed many Location Based Social Networking sites and in most cases “some kind” of lack of privacy is the base of their business model. Differently from carrier fee based pushed services (top – down), this model is based on bottom-up. The LBS provider enables a platform for people to interact for free. In this scenario the handset is usually subsidized by the carrier, interested in generating traffic. The free service is now growing in viral mode and at this point the customers should be called by their real function: “data collectors”.
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Location Based Services Value Chain – Part 2
Friday, November 28th, 2008Have you read PART 1? I’ll strongly recommend reading part 1 first.
As mentioned in part 1 the main components in the LBS Value Chain are: the location based service provider or developer (LBS APP), the data carrier (a cellular provider like T-Mobile, AT&T, etc), and the customer.
As Part 3 will talk about Web 2.0 strategies for Location Based Services and particularly for Location Based Social Networking, we need to completely understand every piece of the puzzle. Otherwise your model will be leaking money (pouring in some cases). Moreover understanding the players and trends will allow you to craft long term solid strategies.
A more comprehensive value chain shall include:
Location Based Services complete Value Chain by Claudio Schapsis
MAPS: Most LBS applications utilize maps; therefore their cost shall be added to the equation. The map market can be considered a duopoly dominated by Navteq and Teleatlas.
Consider: those companies were acquired recently by Nokia and TomTom.
Ask: How can they affect your business by controlling the LBS market. Can your application change the map provider easily? Do they cover all the areas you plan to service? Can you grow to other markets (internationally)? Does your international strategy fit your provider’s existing maps? What are their plans of expansion? How are you getting charged? What layers of information are included in that charge? The list of questions doesn’t end here and is closely related on the type of service you are planning to offer.
MAP INTERFACES: If you want to use map providers like Navteq and TeleAtlas you will need to pay a premium price to companies that provide interfaces to those maps – such as Autodesk, Decarta, etc. Your applications can also be based on Google maps (TeleAtlas data) or Microsoft maps (Navteq data) API’s.
Location Based Services Value Chain – Part 1
Sunday, November 23rd, 2008As I mentioned in my previous post, the main components in this chain are the LBS service provider or developer (LBS APP), the data carrier (a mobile operator like T-Mobile, AT&T, etc), and the customer. We can identify 3 basic types of relationships.
In the first one the LBS APP provides an application to the carrier and the carrier provides the service to their customers for a fee – or free of charge to encourage the use of data services. For example companies like Loopt are offering their LBS social networking services through carriers like Verizon Wireless, applications like Autodesk family finder, and others.
Location Based Services Value Chain 1
The main challenge for the LBS APP is to find one of the mobile operators willing to buy and offer the application through their network. Once the service is running, all the promotion, billing and collection is performed by the mobile operator. The LBS APP revenues can be smaller but the risks are reduced as the investment in infrastructure and operations are minimal. On the other hand, the ownership of the customer usually remains with the mobile operator, minimizing the LBS APP possibility to up-sale other products.
First post – Marketing and the Location Based Services Concept
Tuesday, November 18th, 2008Back in business school, we learned about “The Marketing Concept” as the total company effort to satisfy customer needs at a profit.
Location based services are booming and as marketing professionals, we have real challenges on how to integrate these new technologies to our tool set together with Wikis, Blogs, Social Networks, Podcasts, etc. Are you ready for new ideas like Location Based Advertising?
From a business perspective, I would define the “Location Based Service concept” as the company’s effort to transform geographical positioning information into valuable and relevant data for a customer, to make a profit.
The Location Based Service concept, like the marketing concept has 3 components
1- Get Geographical positioning information. This can be accomplished in many ways. The obvious way is a GPS device through cellular network, IP address mapping, user input, etc. (will address this in future posts)
2- Transform this data into valuable information. Your kids are calling for a pickup at midnight; would you consider the same situation knowing they are at a friend house or wandering
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IMPLEMENT YOUR LOCATION BASED MARKETING STRATEGY
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