While those tuned into the industry know good and well that innovative marketing potential exists in LBS apps like Foursquare, it’s easy to forget the audience for such apps is very small in comparison. Such is the tone of a new study published by Forrester.
The study found that only 4% of the adult, Internet-using population has used any kind of location-based service, and just 1% of all adults check into a location at least once a week. By contrast, more than 11% of Online adults have used Twitter, and an estimated 28% of all Internet users have signed up for Facebook. Diving deeper into the demographics of LBS apps, the study found that users are likely to be 19- to 35-year-old, college-educated males who are “influential among their friends and family.”
These users generally do a lot of mobile-based web research when considering making a purchase, from a refrigerator or a car to a movie ticket or dinner at a restaurant, the report notes. Their average household income is right around the six-figure mark as well — around $20,000 higher than consumers who don’t use an LBS. While the audience of such apps may be small, it’s a prime sample to market to based on these findings.
Forrester warns that while expecting huge returns from marketing via LBS apps, early adopters are prime to take advantage of the medium — using Starbucks recent campaign with Foursquare as a prime example. “Starbucks, by connecting its existing loyalty program to a startup LBSN, got not only great press initially but also the opportunity to test an emerging technology. Adventurous marketers like Starbucks see a consumer market of early adopters that will hopefully grow into a new and active audience.”
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@phil_hendrix
Forrester data say little about LBS…
Forrester's conclusions appear to be based on the following question: "To what extent are you familiar with geolocation applications ilke foursquare and Gowalla that you can access on a mobile phone." Given the narrow, peculiar wording of this question, the results say little about location-based services in general.
In literally hundreds of interviews we’ve done with consumers, not a single one has used the term “geolocation,” so I’m not surprised that few consumers say they’re familiar with “geolocation apps.” In addition, while Foursquare, Gowalla and other check-in apps get enormous attention in the technology community, these apps represent only a small slice of the broader category of location-based services (see http://bit.ly/9yVYhl for an illustration and http://bit.ly/9ugm2M for a more comprehensive discussion of location-based services). Had the question referenced “mobile apps that provide information or results based on your current location, such as Google Maps, Yelp, etc.” the results would have been very different. Finally, most location-based services are designed for smart phones – the sample for the Forrester study appears to include both smart phone and feature phone subscribers. Familiarity and usage of LBS among smart phone subscribers is undoubtedly much higher.
Despite these qualifications, I don’t disagree with Forrester’s conclusion that “The social location world is littered with dozens of apps that connect people and places in unique ways but also segment users into app silos” (as suggested in the illustration at http://bit.ly/9yVYhl).
Dr. Phil Hendrix, immr and GigaOm Pro analyst; see report, Location – The Epicenter of Mobile Innovation (http://bit.ly/9ugm2M)
karanicola
Location based is another way of saying, "shrinking of the target market". To reach everyone you must use a method that can impact the maximum amount of people such as SMS>