What Facebook Places Really Means to LBS

September 8, 2010 By: Kevin Dennehy

LBS Insider, September 2010

The recent Facebook Places launch — and a New York Times article that says only a small percentage of people over 35 use location-based services — are the big late-summer events that folks are talking about in the industry. To learn more on how Facebook and other companies will change and shape LBS, Lisa Peterson will be leading a webinar for GPS World and will also be on a panel at GPS-Wireless 2010, which is October 5 at the CTIA Enterprise & Applications conference in San Francisco.

Some say that the Facebook Places launch last month will drive the mass consumer market that has been needed for serious location-based services growth. Others believe that it will be tough to entice older LBS users, as was portrayed in a recent New York Times article.

“I saw a report in the New York Times that appeared to agree with my suspicion about the slow and somewhat limited uptake of [LBS], particularly those services tied to social networking,” said Mike Dobson, TeleMapics president.

Dobson said that a recent Forrester Research Study by Melissa Parish titled Location-Based Social Network: A Hint of Mobile Engagement Emerges, and also quoted in the Times, said less than four percent of Americans have tried LBS — and only 1 percent use them weekly. In addition, 80 percent of those who have tried LBS are men and 70 percent are between 19 and 35 years old.

Apparently not deterred by these statistics, Facebook announced its entry into the mobile-local marketplace with its Places feature in mid-August. “Those interested in the dynamics of this tool should look at the Facebook FAQ [frequently asked questions] on the topic to understand what [the company] is attempting,” Dobson said. “While I am interested in the social networking concept of ‘checking-in’ and even its commercial correlate offered by Shopkick, I am not convinced that functionalities such as these will result in an upsurge of business that we might classify under the category of LBS.”

Dobson says that social networking could be one key to targeted advertising on mobile devices, but it is unclear that either the current aficionados of checking in, or that members of other generations, will be more likely to check in because this action might be accompanied by the wireless delivery of a coupon or a deal. “After all, you check in after you have arrived at a location, hoping to meet others you know. The idea is to stay there until your crowd gathers based on your check in, so why would the owner of the establishment want to offer discounts to patron already captured?” he said.

Dobson said another fly in the LBS ointment occurred when he was using Shopkick. “I checked in at my local Best Buy to explore the application and earn some points. I could have earned more points by scanning four items that were shown on my screen,” he said. “When I went a little farther into the store to try and do so — field research, of course — my mobile service signal strength degraded and I could no longer use Shopkick or the coupons that were shown on my phone when I entered. I suspect that the current iteration of social networking related to checking in will provide a limited boost to mobile commerce, if any at all.”

However, Dobson said he was intrigued by the ease which users of Facebook Places can create new places, as well as optionally providing a description these places. “Will Facebook use crowd sourcing to evaluate the existence or description of these new places? When some cad describes a strip joint as Bobby’s Balloon Palace and notes that it is family friendly, what will Facebook do when a young couple with children finds that this location is not as it was represented?” he said. “Yes, I know that you can report a listing that you find offensive — but I am not sure what happens then or how authoritativeness is judged in the check-in environment. It seems to me that what will make LBS more successful is improving the tools that will make receiving information about opportunities around you easier, faster, and with better-quality results.”

Social-local-search will likely be the major opportunity for LBS on the social side, and the crucial issue standing between the industry and success is the relevancy of the targeted advertising that is delivered, Dobson said. “Where people are located may not be as important as mining their search logs for information about their intent. People’s GPS coordinates and GPS paths do not have meaning, only people do, and sometimes they don’t either,” he said.

Such companies as Where are focused on helping users find places they may be interested in and driving them to these locations, said Dan Gilmartin, Where’s vice president of marketing. “Facebook places will be a meaningful tool through which users will be able to check-in and share their location with their social graph, and has quickly commoditized the check-in feature,” he said.

E-911 Back in the News

The Federal Communications Commission’s E-911 mandate drove the consumer GPS market — and many believe created LBS — when first proposed more than a decade ago. Depending who you talk to, compliance has been slow, or is happening despite the FCC’s decision to tighten geographical area of compliance rules.

“Compliance itself hasn't slowed. What's happened is the FCC's desire to tighten the rules for geographical area of compliance, and also address issues such as indoor location performance and consistency across environments,” said Marty Feuerstein, Polaris Wireless’ chief technology officer. “In the past, for compliance, carriers could aggregate performance across the entire nation or their whole network. That allowed some systems to work well in urban but not rural, and others to work well in rural but not urban. New rules will likely reduce the compliance geographical area down to county level, which will not allow as much averaging as the old approach.”

The new FCC rules will trigger a new round of compliance benchmarks over several years, Feuerstein said. “They will also trigger deployment of new technologies, hybrid systems for indoor location performance for example, that will likely drive consumer LBS beyond today's GPS,” he said.

Feuerstein sits on the FCC’s Communications, Security, Reliability and Interoperability Council (CSRIC) Working Group 4C, which is focused on technical options for E-911 Location Accuracy for current and emerging technologies in different environments. “The group is also looking at current E-911 gaps identified by public safety agencies and how technologies might address those. It was formed as part of the broader CSRIC initiative kicked off by the FCC as an industry advisory council on telecom, media, and public safety issues,” he said.

Although there has been wireless carrier E-911 pushback in the past, including fines for missing deadlines, Feuerstein insists that carriers are not fighting compliance. “They have, however, pushed back on new, tighter accuracy rules. They want to be sure the rules are fair to operators starting from different legacy systems,” he said. “They also want the FCC to take into account the differences between national carriers compared to the smaller regional and rural carriers.”

Some carriers have expressed support for new rules proposals or aspects of them on the FCC record. Several have voluntarily agreed to adhere to tighter proposals as part of industry mergers and acquisitions.”

Feuerstein believes that the big E-911 buzz is about emerging hybrid systems that blend today's handset-based GPS and high accuracy network-based technologies to drive location performance indoors, where satellite systems don't work well, and where the majority of wireless calls are made.