Location based services – why operators hold all the cards

Donald Stuart, CEO of Brainstorm

Donald Stuart, CEO, Brainstorm

LBS – what’s the hype?

The area of Location based services (LBS) has been getting a lot of attention of late, and it’s no wonder, Juniper Research has highlighted that the Mobile Context and Location Services market is expected to generate revenue of $43.4 billion by 2019, up from $12.2bn in 2014. With this in mind it is clear why businesses within the OTT, telecoms and media space are vying to get their piece of this promising revenue stream.

Mobile marketing campaigns have moved beyond offering mass indiscriminate communications, to focus instead on delivering carefully targeted personalised messages. This transition is driving a higher ROI on marketing campaigns as the tools are now available to automate the slicing and dicing of audiences in a seemingly limitless array of permutations. Yet the addition of a further dimension; that of location; adds a powerful new trigger to deliver messages linked to your location at a given moment in time, the use of which has seen response rates surpassing those of standard generic campaigns by as much as 75%. It is this additional location capability which, when married with customer demographic and buyer behaviour information, is causing such a stir amongst the marketing populace driving both mobile operators, OTT service providers and mobile device manufacturers to consider ways to monetise the location network assets they hold.

The Importance of Opt-in

According to Cisco 47% of us are willing to receive vouchers to our mobile phone when we are at or near a retail store. This brings us to another important point which is in respecting the wishes of subscribers themselves and operators are working hard to develop ways to convince subscribers of the value of opting-in to receive personalised offers. What’s particularly impressive is that rather than conceding the upper hand to OTT players like WhatsApp and Viber as they did in the battle for SMS supremacy, MNOs have been quick to recognise the value of location based intelligence to enterprises. Far from dragging their feet, mobile operators are now at the forefront in offering innovative smart technology which can turn location data into a powerful business tool.

Separating GSM from GPS

There are a lot of location services already in operation – ranging from those that use GPS satellites to Wi-Fi and even Bluetooth, used to provide location through Beacons. However these technologies all rely on ticking a number of boxes namely: the consumer having a smartphone, downloading an app and actively logging in or checking in to ask the app to ‘find my nearest’ of whatever service or product they are looking for.

While these location technologies are reliant on actively checking in, think Foursquare, GSM location data is passively collected by your mobile network operator along with lots of other ‘events’ that they collect every time you do something with your phone – turn it on, send a message, etc and by unlocking these location events, an MNO can effectively create highly-targeted location based engagement opportunities.

Why MNO’s hold all the cards

So whilst the technology exists to create personalised messages for marketing campaigns the potential uses for location based technology go way beyond pure marketing applications to include a myriad of other potential opportunities to enrich customer service activities, aid fleet management, logistics and even help to find missing children. The use of GSM location technology gives operators the opportunity to offer feature-rich, valuable services, above and beyond the data gathered by other location technologies.   GSM is more effective than say GPS, Wi-Fi or Beacons for applications that rely on passively monitoring large volumes of user data without relying on a user to do anything other than opting into the service. Therefore services like fraud management and ‘lost children tracking’ are better suited to GSM services which are the domain of the operator.  Operators are in a unique position to leverage their golden pots of customer data to provide services which OTT players have no access to, which will inevitably lead to enhanced loyalty, reduced churn and growing revenue.

 

Written by

Donald Stuart

CEO

Brainstorm

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