AKS - Fotolia

Mobile LBS poses challenge for companies, consumers alike

Mobile location-based services have the potential to give companies serious consumer insight, but ethical issues abound.

In the war for customer acquisition, location has become a key tool of engagement. It enables companies to get a handle on where consumers are in real-time and market to them based on location. That location not only creates a captive audience of potential buyers, but it also becomes a proxy for other important attributes, such as customer preferences and other factors that might indicate a readiness to buy.

Companies and users have chomped at the bit to enlist location-based services (LBS) to learn more about customers via location-based data. Consumers also see the value of mobile LBS, in that they can get discounts or valuable information when they surrender data about themselves, including location information.

LBS has been gathering steam for some time. Note that even in a 2013 Pew Research Center survey,

74% of adult smartphone owners ages 18 and older said they use their phones to get directions or other information based on their current location. Companies have used mobile LBS in sports stadiums to upgrade fans' seats or direct them to the least-busy concession stand. And some companies have used LBS to market sports apparel to fans at area bars outside a sports venue simply based on their proximity to the stadium and the store.

But experts have also noted that mobile LBS is in its infancy. Companies have sometimes enlisted LBS in a tone-deaf manner, sending too many messages or offers for products based purely on location and without enough regard for consumer preferences. Consumers are easily turned off by crass messaging.

This guide to location-based services focuses on these pros and cons. In the first article, I examine some of the recent applications of mobile LBS and how companies are -- albeit tentatively -- delving into these technologies. Next, Matt James discusses the careful line companies must travel between using data for insight and protecting consumer privacy. Finally, James explores ethical concerns with LBS.

Lauren Horwitz
Executive Editor
TechTarget Inc.

Next Steps

Location-based services hit the streets

LBS eases marketing hurdles, brings privacy issues

Customer trust key in mobile LBS

Dig Deeper on Customer relationship management (CRM)