Date: 02 September 2010

Version: 1.0

By: Green Orange digital marketing

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Contents

1. Introduction

2. Location based statistics

3. Opportunities

4. Threat

5. Case studies

6. Conclusion

7. Sources

Lifan Shiudigital marketeer at Green Orange digital marketingwww.greenorange.com

www.greenorange.com

Introduction

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What are location based services? Location Based Services are applications, that users can use to check-in at certain venues or places and let other people/ friends know where they have checked-in.

Will it be a short lived life just like Google Wave or will LBS become as popular as Twitter?

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Some figures about Local Based Services (1)

Loopt has reached over 4 million users.

Foursquare has over 3 million active users, with an average daily growth of 19,000 daily users in the month July. With a growth of 350% from January to August 2010.

MyTown has around 3.1 million users.

Brightkite surpassed 2 million users.

Gowalla has over 390,000 active users with an average daily growth of 1,800 daily users. With a growth of 15% over the same period of the year.

Whrrl has around 350,000 active users, with an average daily growth of 2,500 daily users.

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Some figures about Local Based Services (2)

Two in five social network users use geolocation

4% of US online adults have ever used location based applications and only 1% of them uses them more than once per week

84% of US online adults weren’t familiar with location based apps

Location Based Services (LBS) users in the US are 80% male and 70% are aged 19-35

70% of those LBS users have a college degree or higher

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Some figures about Local Based Services (3)

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Key points why LBS could growNo, there are several key points/ factors why LBS could grow.

Increasing sales of smartphones.

Increasing number of people who uses mobile internet.

Increasing integration of GPS in mobile phones.

Current LBS users are still early adopters. Early adopters are also called influencers most of time, because they have a huge social network and set trends to influence large number of people/ groups.

You can also see it as a chance to outgrow the niche market, if 84% of the respondents are still unfamiliar with location based services.

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Expected growth of LBS Mobile location-based service revenues in Europe are forecasted

to grow from € 220 million in 2009 to reach € 420 million in 2015.

Surge forecast in location-based service use. The prediction are that just within a few years location based local search and information will be used by nearly 1.5 billion people.

Primary driver of this increased usage are the availability of more sophiscated and user-friendly devices along with more people accessing the mobile internet.

Total revenues from all mobile location-based services are expected to reach $12.7 billion by 2014.

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Worldwide smartphone sales

Worldwide 314.7 million mobile phones were bought by end-users, that is a 17% increase over last year.

The sales of smartphones to end users reached 54.3 million units, that is an increase of 48.7% if we compare it to the first quarter of 2009

In Q2 of this year, the shipments of Android based smart phones grew an impressive 886%

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Worldwide/ Europe Mobile internet usage

71 million Europeans browse the mobile Internet in a typical week and, with almost an hour a day actively spent going online via their mobile (6.4 hours per week)

In Europe almost a quarter (24%) of 16-24 year olds and 21% of 25-34 year olds already using the mobile Internet

The forecast is that Mobile phones will overtake PCs as the most common web-access devices worldwide by 2013. It‘s estimated that the combined installed base of smartphones and browser-equipped enhanced phones will surpass 1.82 billion units by 2013 (PCs total will have 1.78 billion by then).

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Integrated GPS in mobile phones

The forecast is that 79.9% (318.3 million units) of cell phone shipments in the fourth quarter of 2011 will have GPS functionality. This is up from 56.1% or 187.8 million units that shipped in the first quarter of 2009.

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Obstacles to overcome for LBS to succeed

PRIVACY

Privacy could play a big role why LBS won’t grow more than it is and will be forecasted. For example the website: http://pleaserobme.com/ is trying to raise the awareness about over-sharing.

LACK OF BUSINESS ADOPTION

Lack of business adoption. If a user keeps checking into a business repeatedly, and the business doesn’t know that he is checking in, and doesn’t even know what Foursquare is — at some point the user will become fed up and defect.

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Case studies

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Domino’s Pizza UK saw an increase in profits by 29% (roughly $26 million) with the help of social media and LBS.

Starbucks offers discounts on drinks and food to Foursquare mayors or to people who check-in at special happy hours. This an incentive and also creates customer loyalty.

National Geographic offers 15 walking tours to explore destinations like the Seine in Paris. This gives National Geographic bigger and better long term interaction with the brand.

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Conclusion

There are several key points/ factors why LBS could grow more: increasing sales of smartphones, increasing number of mobile internet users, increasing integration of GPS in mobile phones.

Mobile location-based service revenues in Europe are forecasted to grow from € 220 million in 2009 at a compound annual growth rate (CAGR) of 12% to reach € 420 million in 2015.

LBS is still in the starting fase, but it is wise to try it out and look which way works best for your company. This way you can keep ahead of your competitors.

Besides revenue, building your brand name and customer loyalty is also very important reason to start with LBS.

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Sources

http://www.gartner.com/it/page.jsp?id=1278413

http://33rockers.com/2010/07/28/putting-percentages-into-perspective-is-facebook-better-than-foursquare/

http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=3275&Itemid=67

http://www.spinsucks.com/social-media/the-time-for-location-based-marketing-is-now/

http://woorkup.com/2010/08/08/the-state-of-social-location-based-services/

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