Location Location Location


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30K-foot overview of the location-based advertising ecosystem and why the future hasn't yet arrived despite a dozen+ years of promises

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Location Location Location

  1. 1. Location, Location, Location<br />Location-based services + the mobile ecosystem<br />September 8, 2011<br />Chris DeVore, General Partner, Founders Co-op<br />chris@founderscoop.com<br />http://www.founderscoop.com<br />(206) 801-1080<br />1<br />
  2. 2. Chris DeVore<br />General Partner @ <br />Previously an entrepreneur, product and business guy at…<br />Chris DeVore<br />chrisd@gmail.com<br />@crashdev<br />Instead of law school…<br />2<br />
  3. 3. Everything is different now<br />BEFORE<br />AFTER<br />Smartphones<br />“Dumb” phones<br />App Stores<br />Crappy Software<br />Carrier as “dumb pipe”<br />Powerful Carriers<br />Branded <br />Hardware + OS<br />Commodity Hardware<br />iPhone Launch, June 29, 2007<br />Creative explosion<br />(Apps + Sensors)<br />Limited Utility <br />(Voice + SMS)<br />3<br />
  4. 4. What disruption looks like<br />“Apple raked in 48 percent of the worldwide mobile market’s earnings before interest and taxes in the second quarter of 2010…with roughly 3 percent of the overall mobile sales in the quarter”<br />Kevin C. Tofel, “Apple Snags 48% of Mobile Profit Pie”,GigaOm, August 17, 2010<br />4<br />
  5. 5. We’re just getting started<br />“For the first time in November, 2010, Android passed the iPhone in total number of U.S. smartphone subscribers… 26 percent of them own an Android phone versus 25 percent with an iPhone.<br />- Erick Schonfeld, “comScore: Android Passes iPhone in Total U.S. Subscribers, TechCrunch, January 6, 2011<br />Just four years in, Apple is now being disrupted by Google<br />5<br />
  6. 6. Why location matters<br />We are a consumer society<br />Consumer spending accounts for nearly 70% of US GDP<br />http://www.bls.gov/opub/mlr/2002/11/art2full.pdf<br />90% of consumer spending is still local<br />“2011 e-commerce share of retail spending totaled 8.6 percent, its largest share ever, up from 8.1 percent in the year-ago period.”<br />http://allthingsd.com/20110518/shopping-increasingly-moves-online-with-a-spike-in-flash-sales-and-group-buying/<br />The Internet just turned 20 – but local is still where the $$ is<br />6<br />
  7. 7. Sensors + user data + apps<br />User data<br /><ul><li> Contacts
  8. 8. Logins
  9. 9. Call history
  10. 10. Email / SMS
  11. 11. Browse history</li></ul>- Photos / videos<br />App-generated inferences, e.g.,<br /><ul><li> Where am I
  12. 12. Who am I with?
  13. 13. What’s our relationship?
  14. 14. How often do I visit?
  15. 15. How did I get here?
  16. 16. How long did I stay?
  17. 17. What businesses did I visit?
  18. 18. What media did I consume?
  19. 19. What products did I buy?
  20. 20. What did I say + share?
  21. 21. What offers did I see + respond to?</li></ul>Sensor data<br /><ul><li> GPS
  22. 22. Accelerometer
  23. 23. Gyroscope
  24. 24. Camera
  25. 25. WiFi /Bluetooth/NFC
  26. 26. Barcode Reader</li></ul>Smartphones will (eventually) unlock the local opportunity<br />7<br />
  27. 27. The Location Fantasy<br />8<br />
  28. 28. Location reality<br />Weak + fragmented monetization infrastructure<br />Too much inventory, too hard to buy at scale<br />Limited advertiser adoption (both local + national)<br />No clear leader in market to deliver offers + track results<br />Consumer privacy concerns<br />Hype cycle is building, but this market still doesn’t really exist<br />9<br />
  29. 29. The Location “Stack”<br />End-User Applications (Yelp, Foursquare, Google Maps, etc.) <br />Ad + Offer Networks (AdMob, iAd, InMobi, Groupon, etc.)<br />3rd Party APIs (SimpleGeo, Urban Airship, Geoloqi etc.)<br />OS (iOS / Android / WebOS / BlackBerry / etc.)<br />Handset (Apple / HTC / Samsung / etc.)<br />Complex + dynamic ecosystem w/no “winning” solution (yet)<br />10<br />
  30. 30. When the future arrives…<br />Context-aware ad / offer targeting<br />Location + psychographics + demographics + time of day<br />Push communications<br />Always-on / interrupt-driven user-to-device relationship<br />Identity management / transactions<br />Personal device a literal store + extension of identity<br />“Augmented reality”<br />Voice input + onboard sensors allow ever-deeper integration with health / fitness / behavioral + attention states<br />Mobile + local will change the way we interact with the world<br />11<br />
  31. 31. Closing thought…<br />“Today, almost three-quarters of the world's people carry a wireless phone. That activity generates immense commercial databases that reveal the ways we arrange ourselves into networks of power, money, love and trust. The patterns allow researchers to see past our individual differences to forms of behavior that shape us in common.”<br />Robert Lee Hotz, “The Really Smart Phone”, The Wall Street Journal, April 23, 2011<br />12<br />