During the “Location-Based Services: Separating Hype from Reality” session, speakers discussed how the narrow focus on a handful of mobile applications with modest adoption obscures the broader importance of location to mobile users and advertisers alike. The panel was moderated by Greg Sterling, founding principal of Sterling Market Intelligence, San Francisco.

“Mobile content will be primarily an advertiser supported medium,” said Allistair Goodman, CEO of Placecast, San Francisco. “Mobile advertising is currently based on a search and display Web paradigm, but this is not necessarily the end game.

“It is not about the ads in the traditional sense, but offers that are actionable in the real world,” he said.

Branch out
According to Mr. Goodman, advertisers and marketers looking to branch out into the location-based services field should first have consumers opt-in to the company’s services.

The message that marketers send out to consumers should be personalized.

Additionally, there should be an incentive and offer for consumers.

“Location is going to become a part of the fabric with everything that is happening on the mobile device,” Mr. Goodman said. “It’s going to be personalized.

“A lot of what we do on mobile is going to include that transactional component,” he said. “One of the challenges that we’re still facing today is how do I get to that scale and reach.

“We’re still facing a world – although we hear a lot about apps – where there’s still feature phones and SMS. What we decided to do with [our service Shopalerts] is migrate off the smartphone and app space and to the carrier network.”

Mobile promise
Mr. Goodman said that he is seeing promising indications that mobile is the ideal way to tie offers to consumers.

In addition, the executive said that privacy is still a big deal, but as long as there is an incentive, consumers are willing to share their information.

“We’re consistently seeing – as long as there’s a good exchange of value – that consumers can share their information as long as they can get something in return,” Mr. Goodman said.

“We’re learning that you have to have that obvious link between offers and locations,” he said. “Incentives and exchange of value are key.”

According to Jeff Somers, director of marketing at Microsoft Tag, Redmond, WA, location-based services and mobile bar codes help build consumer relationships.

“Tag helps you tell a story better,” Mr. Somers said. “It’s about bringing life experiences that up to now have been limited to how can you tell those stories.

“People are getting used to them and engaging with them,” he said. “In March 2011, there were over 50 percent more scans than any other month.

“Think about Tag as a back-end platform that lets you deploy multiple triggers in the market place and drive an experience that you want with consumers and their mobile device.”

Experimental
Brian Monahan, executive vice president and managing partner at IPG Media Lab said that the company worked with CBS Interactive on a CNET application.

The company did qualitative research where it recruited consumers who were monitored.

“We saw interesting patters as people entered the store and when they used the app,” Mr. Monahan said. “The app insight we found was that access to the content decreased a consumer’s stress level – almost 70 percent said it made shopping fun.

“They also told us it helped them make smarter choices,” he said. “The No. 1 reason why we lose shoppers is because they lack confidence.

“Apps make shoppers feel smart.”

The CNET application has three sponsors.

Only 33 percent of app users remember seeing any of the ads, per Anne Claudio, vice president of research at CBS Interactive.

However, 19 percent of app users – more than half of those who recalled seeing ads correctly – identified the sponsor.

“We found that the app really improved consumer’s shopping experiences,” Ms. Claudio said.