I have been following the location-based services industry for the past couple of months and, after various interactions with industry players and analysts, I noticed something was missing: the big picture. Every new player wants to stand out from the competition, but they often fail to develop an ecosystem to make their business model viable.
As location based services keep growing in popularity, two key questions need to be answered: What exactly is the LBS ecosystem, and what is the big picture?
Location-Based Ecosystem Infographic
After analyzing different examples and models of LBS ecosystems, I came up with six key strategic layers which I have summarized in one easy-to-understand image.
1 | Geo-Data or Geoinformation
Wikipedia defines “geoinformation” (a portmanteau for geographic information) as follows: “Geographic information is created by manipulating geographic (or spatial) data (generally known by the abbreviation geodata) in a computerized system. Systems can include computers and networks, standards and protocols for data use and exchange between users within a range of different applications.” Learn more at wikipedia.
Without geo-information (listings, phone numbers, reviews, etc.), interaction is impossible. It is the most important kind of information and represents the raw data of an LBS app.
Learn more about location data on the following blog post: Hoping Location Data Becomes an Open Commodity.
2 | Location-Based Business Rules (Geofencing)
Wikipedia defines a “geofence” as: “A virtual perimeter for a real-world geographic area. A geofence could be dynamically generated — as in a radius around a store or point location. Or a geofence can be a predefined set of boundaries, like school attendance zones or neighborhood boundaries. Custom-digitized geofences are also in use. When the location-aware device of a location-based service (LBS) user enters or exits a geo-fence, the device receives a generated notification. This notification might contain information about the location of the device. The geofence notice might be sent to a mobile telephone or an email account. Geofencing, used with child location services, can notify parents when a child leaves a designated area.” Learn more at Wikipedia.
There are three types of geo-fencing (set-up boundaries and alerts):
- Those that define an interaction with an object or product;
- Those that define an interaction with an area or zone;
- Those that define an interaction when two people or two objects are in the same area.
To find out more about geofencing, visit the WaveMarket website at Locationlabs.com.
3 | Interactions Layers | Make Your Presence Known
When it comes to interacting with a location, a user and a product or service, one element we can use is Cheking-In or Social Check-in.
Since the LBS industry is gaining momentum and will continue to grow and develop in the future, it is important to 1) clearly define what the LBS ecosystem is and 2) to explore the “big picture.”
Wikipedia explains social check-in tools as follows: “Many social networking services such as Foursquare, Facebook, Gowalla and Brightkite allow users to “check in” to a physical place and share their location with their friends. Users can check into a specific location by text messaging or by using a mobile application on a smartphone — the application will use the phone’s GPS to find the current location. Many applications have a “Places” button or tab where a user can see a list of nearby places into which the user can check in. If a location is not on the nearby places list, the user can add the location directly from the phone. Once a user has checked in, they have the option of sharing their location with friends in services such as Twitter or Facebook.”
4 | Rewards & Loyalty Programs
Loyalty programs are structured marketing efforts that encourage and reward buying behaviour in the LBS world. TopGuest.com and Shopkick are two models that have added an important rewards feature to maximize user value.
Read more about the Pepsi-Co experience here: Pepsi rolls out multifaceted LBS mobile loyalty initiatives
5 | Location-Based Analytics
It is impossible to even talk about location-based marketing, or to enhance performance, without having a clear strategy and the right tools to follow performance per location.
6 | Transactions (NFC chips)
Transactions — this is the most promising element of an LBS strategy and is something banks and credit card companies should familiarize themselves with. Transactions are available today as a result of the NFC chips Google implemented in Gingerbread Phones and Apple in the iPhone 5.
Wikipedia defines NFC as: “A set of short-range wireless technologies, typically requiring a distance of 4cm or less. NFC operates at 13.56 MHz and at rates ranging from 106 kbit/s to 848 kbit/s. NFC communication always involves an initiator and a target: the initiator actively generates an RF field that can power a passive target. This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. NFC peer-to-peer communication is also possible, where both devices are powered.” Learn more at wikipedia.
And read more here: NFC FORUM Website.