Sunday, September 25, 2011

6 Players in the Location-Based Services Ecosystem

My last post on location-based services set the scene on the reasons why location-based services are picking up with the the growth in on-the-go consumers who are more freely sharing information socially, and with more location context.  With mobile phone-based location-based apps driving  business recommendation services through integration with the social media internet, multi-channel merchants that sell online and via physical stores have, in many cases, have been very effective in using these services to boost both real-world and digital traffic.

Who are the players of location-based services?  I have attempted to put together the location-based services ecosystem in the following value chain for our discussion.

  1. Map Data Providers provide:
    1. the base layer map data.
    2. enriched hyperlocal POI (point of interest) data.
  2. Application Software Providers
    1. technology partners who build upon the map data providers' base layer map.
    2. develop the user interface to work cross-platform, with customized features.
  3. Advertising Network Providers
    1. provide the connectors to ads in the LBS app.
    2. and the field salesforce to sell the ads to brands.
  4. Location-Based Content and Services Providers include
    1. backend partners who serve out hyperlocal and relevant ads on behalf of merchants in partnered web and mobile sites.
    2. front-end eShopping partners who vend free vouchers, paid eCoupons, aggregate deals.
  5. Access and Provisioning Providers (Carriers / Operators) provide
    1. affordable data plans to consumers and enterprises.
    2. promotions in various marketing touch-points (Retail, SMS, MMS, PC internet, EDMs, DMs, Print, TV) to their targeted customer base.
  6. Device Providers
    1. work with the Carriers / Operators to provide out of box experience through preloading of the location-based services apps.
    2. comprise the N-screens of mobile devices across PC, laptops, tablets, smartphones etc.

What are the revenue streams in location-based services?
Through Strategic Analytics, ABI research and various lit search, there are 3 main pillars of revenue streams in location-based services - some more immediately relevant, whilst others like community set to grow in the next 5 years.
  1. Utilities
    1. more immediate rational driver, referring to search, turn by turn navigation, personal tracking
    2. for parents who would like to track their kids
    3. for exploring and looking up places of interests and getting there on car or on foot
    4. for enterprises for fleet management
  2. Commerce
    1. location-based eShopping deals
    2. restaurant booking
    3. mobile advertising
  3. Community
    1. social media integration leading to crowd-sourced sharing of recommendations
    2. peer to peer value exchange
    3. enabling more engagement with consumers through gamification

Before ending this post, I will leave you now with
2 real-world examples of how location-based services bring value and innovation to businesses in the ecosystem.

(1) Nokia Thailand Foursquare Campaign
Here is a first in the world campaign when a phone manufacturer (Nokia), a local operator/carrier (DTAC) and local Thai retailers came on board and collaborated to provide brand awareness of Foursquare check-ins with Nokia smartphones, value to DTAC consumers and driving real-world traffic to the retailers.  (Disclosure: I was involved in the working team for this campaign with my Nokia Thailand colleagues during my career at Nokia)

(2) Nokia Gift Vending Machine Social-Location-Mobile (So-Lo-Mo) innovation
A pretty neat program which provided real-world treats to people who checked in.  Delight: you never know what you are going to get!

  1. How do the players in location-based services differ in your market?  
  2. How do the campaign mechanics from location-based apps in your markets provide value as ancillary channels for businesses?
I look forward to hear from you on your comments to this post, and write more on these topics.

Later soon,
Nelson Wee
engage with me at @nelsonwee

1. Infographic: Location-Based Social Media – Every Move You Make
2. Location Based Services Usage & Perception Survey from Microsoft

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