Almost a year ago in my first post, I wrote that Location Based Services are the company’s effort to transform geographical positioning information into valuable and relevant data for a customer, to make a profit. Since then I had the opportunity to talk, work and advise leading companies in the industry regarding new products and services in the LBS arena.

LBS are very similar to other businesses in the sense that in order to succeed you need a solid revenue model and a clear value proposition. Sounds simple; but when approaching the LBS market and trying to understand the dynamics of its Value Chain the troubles begin. Many companies are getting this right and are already making profits. Others try to migrate WEB2.0 applications to the mobile world and discover later that in this environment “Free” is an expensive term. No wonder VCs usually look at maps as a feature and not something to build a whole application around.

That’s why I was glad to know about the TheWhereBusiness initiative to organize Metaplaces. I spoke with one of the main persons behind this effort, Thomas Hallauer, who mentioned that MetaPlaces will be the key place for the enablers of the Location market where key thinkers and players swap strategies to make location pay. MetaPlaces is the first conference to focus on the next wave of innovation and revenue generation for mobile and web-based LBS.

When I asked Thomas who is coming and what are their expectations he said “…over 150 location business developers are coming to MetaPlaces to analyze the changing dynamics and revenue models of the LBS market now that the worlds of location content, interactive advertising, Geo enabled web services, and traditional carrier-driven mobile LBS solutions have collided…”

As part of my contribution to their efforts I’ll be moderating the Location Based Social Networks panel composed by Abaqus, Alcatel-Lucent, Loopt, Skout, and Socialight. We’ll have the opportunity to talk about topics like: revenue business models, how to build a community from scratch, how to use existing ones, and how brands can monetize their mobile extension. What would YOU ask those companies? I urge you to add your questions here as comments – I promise to bring back some answers.

The second conference is LBS LATAM in Miami. For many years I worked in the telecommunications market in Latin America and when the Frecuencia Group asked me to chair this event it put together my past and my present in something I see as the future.

Not many people know that the penetration of mobiles phones in Latin America is around 80% and in some countries in the territory over 100%. America Movil (Telmex) and Telefonica Movistar share around 65% of market, meaning almost 10% market share of the whole world mobile market! Besides the traditional fleet management and AVL applications, we start seeing Location Based Services made in CALA i.e. Location Based Social Networks, Friend Finders, Bus routes notifications, and others. However, this is a completely different market with particular value chains and different user profiles in terms of usage and consuming behavior in each country.

I was surprised by the response in terms of registration from the region and vendors interested in this market. You can see companies like Telefonica, Globalstar, Nextel, Ancel, Tele Atlas, OpenWave, AnyData, Position Logic, Xtify, and many others coming to meet their prospect Latin American partners.

Two busy weeks, two chances to meet key executives in different regions, two coasts, and two events with many opportunities to talk business. That’s why you can’t miss them.

Buckley Brinkman – Change Catalyst

These platforms and the technology behind them make the entire world much more visible. Experts will still be valuable, but expertise will become more widespread. The holes in our knowledge will become much clearer. My Dad calls this understanding the periphery of our ignorance. Clarity both makes our individual weaknesses much more visible and collaboration much more important. The ability to embrace the tools and become comfortable with our own personal shortcomings will be the difference between success and failure in the emerging economy.
I believe one of the keys to success is understanding what translates from platform to platform and how each platform works. One advantage for us is that there are no experts. There is a mismatch between management perspective and knowledge of the technology. Younger people generally know the technology and what it can do, but do not have the experience to apply it effectively. Senior managers understand business and have the C-level perspective, but don’t understand all the implications of the new technology. There are no experts. They are being developed day-by-day as we all learn.

Buckley Brinkman

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Peter Kemp – Managing Partner

“The funny thing about mobile marketing is that the technology that makes it interesting also makes it irrelevant. Mobile marketing is a bit of an answer looking for a question. The web has generally made physical location irrelevant for everything but the most basic functions – and ones you are unlikely to need unless you are traveling out of an area you live or work in and already. I think it is a big idea as a marketing tool for travelers (business and leisure), but it may only be a very tactical tool, but then it is really only valuable for businesses for which I already know the quality – starbucks, pizza hut, kinkos – or I need someway to evaluate the quality (telling me there is a chinese restaurant around the corner is almost useless to me unless I know the quality of it. On the other hand, combine it with facebook, twitter, or even Match.com and it suddenly becomes an interesting social networking tool…or a creepy big brother stalking tool. Overall, I think it will be another tool, but not a game-changer.”

Peter Kemp
Managing Partner, Old greenwich partners
www.oldgreenwichpartners.com

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Jonathan Paisner – Founder and President

As our tours appeal as much to locals as they do to tourists, location based social networking has increasingly gained our attention. To date we have had the most success among bloggers with our Rock and Roll Tour of Manhattan, reaching out to those who show an affinity for rock music and history. We will continue to foster relationships with subject matter pundits and thought-leaders, particularly as we reach out into new geographies with our tours. Locally focused community sites are a great way for us to build word of mouth and to look to share the enthusiasm that our customers have for the products. This is less a matter of buying media and more a matter of fostering a dialogue and relationship with opinion makers in local regions. Beyond marketing, we will look to these new networks of customers to help us identify new product opportunities and to engage them in spontaneous events that can add a new dimension to our user experience.

Jonathan Paisner
Founder and President – CityListen Audio Tours
www.citylisten.com

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Mike Wittenstein – Consulting Chief Experience Officer

“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. Location Based Services may save marketers more than half the wasted effort and expense by using “where-you-are-and-where-you’re-going” information as context to interpolate interests and intent. So, the right information goes to the right person with a need to know in the right format at the right time. It’s the way advertising should be!”

Mike Wittenstein
Consulting Chief Experience Officer
www.mikewittenstein.com

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

around downtown? Suddenly the geographic layer of information changed the urgency of the pickup completely. What if you try to locate your grandmother suffering from Alzheimer or if you want to know where is your task force at any given moment. What if instead having the pizza place telling you “…another 5 minutes…” you can go to the web and receive a service “Where is my pizza”!! (No doubt this is a nice application, particularly if your teen son came with friends from a soccer game and they are starving…)
The number of possible applications is limited to the extent of your imagination (and of course some technical limitations…), but the idea is to generate value for somebody and get paid for that service.

3- Make a profit. It’s amazing how many companies/developers forget that the ultimate reason of putting a business together is TO MAKE A PROFIT. Location Based Services is an expensive business. Usually your current location needs to be relayed to certain application server and most of the time this is accomplished through cellular networks; hence somebody must pay the bill. When you buy a personal locator device – PLD (like zoombak, Leipac, and others) they have a cellular device included, usually with a SIM Card, to communicate your location – and that service is expensive.

The number of LBS applications is growing exponentially. Just in the last few months I’ve seen dozens of free Location Based Social Networking sites come alive. The question is how many of those will be alive next year. For me the answer is simple, only those with a solid revenue model and clear value proposition will last. Some are betting on valid strategies based on collective user value, wikonomic “prosumers”, “fremium” services, etc. In that case, the keys to success are a) make sure somebody else pays the communication costs and b) be sure your customers generate real aggregated value you can capitalize.

First post! I will talk about those services and business models, including GeoTagging, WEB 2.0 applications, Location Based Social Networking, Location Based Advertising, Privacy Issues, and many other.

YOUR OPINIONS are welcomed and desired.

THANK YOU!