Recently we were less than rapturous about the fate of location based advertising. Berg Insight predicted that by 2018 location based marketing and advertising would reach € 10.7 billion globally. We were not rude about this figure because we think Berg Insight is not good at their job. They are.
It is that the things that can go wrong are too serious to make any kind of prediction.
Our cynicism (surely not), our worry, is based on telecoms companies getting a couple of things just right. One is not bombarding customers with fire hoses of offers based on where they are. Another is that, with the privacy issues still rumbling on (1.2 million Canadians had their information passed to the authorities in 2011 – Canadians!) telecoms companies need to build trust with their customers.
Even these two ‘ifs’ were thrown into disarray by the revelation that 80 percent of location beacons are inaccurate.
This figure was courtesy of a speaker at a recent mobile advertising conference, and might therefore be exaggerated for effect. But even so, if the figure is 50 percent, say, that is a lot of wrong data being used to serve up adverts, offers and services. The scenarios are not attractive – a roaming deal, while walking your dog in the park, 25 percent off swim suits, while skiing…
What this means is that telecoms companies will be at an even greater disadvantage. Retailers on the other hand will be at a huge advantage. On account of the fact that they know where the customer is – standing in front of them. So, when they add contextual information to the fact that the customer is standing in his store, he has pretty much all he needs to know to make him a sensible offer.
What is worse is that this lack of accuracy – together with the lack of being able to provide basic services in certain capital cities we could mention – will only further undermine the trust that customers have in their communications service providers.
And without trust, no relationship is going to work.