Hearing the Growls of Location Targeting

We’ve written in the past about location targeting: how the capability in mobile devices is starting to show the way for what we can likewise do on the “wired web.”

The Wi-Fi positioning made popular in the iPhone (care of Skyhook Wireless) is entirely possible for online search as well, given that hardware requirements — Wi-Fi — are also ubiquitous in laptops.

Next, of course, comes the software — something to take the Wi-Fi signal and make sense of it. This can take many forms including downloads and plug-ins (see Skyhook’s Loki).

But for users, these require an extra step, tantamount to adoption barriers — especially in a mass market sense. More automatic location awareness that’s “baked in” to the browser has been one solution: We’re already seeing this through Mozilla’s Geode and similar efforts with Google’s Chrome browser.

But it can go even deeper — namely, the operating system. We’ve heard rumors that Windows 7 will come with location awareness. Not to be outdone, similar rumors have surfaced that Apple’s upcoming OS Snow Leopard will have location awareness as an extension of its existing relationship with Skyhook on the iPhone. Makes sense.

Of course, this only provides the foundation. Local search applications still have to be built that utilize this capability and serve content based on exactly where users are. Yahoo’s Fire Eagle is based on this concept. This could also have implications for push-based advertising where display ads are targeted based on where users are — something that 1020 Placecast has begun to pioneer.

In other words, picture banner ads that have specific promotions for the Home Depot down the street, rather than the general impression-based banners we know all too well. The location relevance and specific calls to action will increase engagement and performance (clickthroughs, conversions, etc.).

For many, this will be a welcome evolution from the relatively blunt state of the art: IP targeting. But it will take a while for Madison Avenue to catch on, and for new ways of thinking about ad unit production (i.e., creative) to materialize. More importantly, users have to buy in first, and we’ll hear a lot from privacy advocates.

So the capability will need to be opt-in, and we’re confident it will get more user acceptance through positive reinforcement that it does actually increase relevance. This is a learning curve/comfort issue that we’ve seen play out with lots of online advertising (contextual, behavioral, etc.).

The advancements in the mobile world and the growth of the mobile Web could accelerate this adoption. We’ll also see faster acceptance among younger age groups. There will indeed be lots of moving parts, but the gears are starting to turn.

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