Mobext has already sold some of its retail clients on the idea and is performing its first studies with Locately, but it won’t have the earliest results until February. “It’s new, and not many people are thinking along these lines,” says Truong, “but we’re trying to guide our clients to think that way.”
The ramifications for business are far-reaching. “I think the fundamental business of demographics is going to change very dramatically,” says Sean Gorman, president of FortiusOne, a company in Arlington, Virginia, that recently launched a location analytics program. The software allows developers to build location analysis into their apps, giving them the ability to gather all kinds of data about consumer whereabouts.
This kind of tracking raises obvious issues of privacy. All these businesses profess sensitivity to such concerns. For research studies, companies spell out to the volunteers just what they’ll be watching them do. Locately sets a time limit—generally about three months—on how long it will collect information. All the companies say they strip the data of personal identifiers. The collected information is aggregated, so researchers see the movement patterns of groups rather than individuals. And once they’re done with it, they say, the personal data is discarded.
Whether these policies actually alleviate the concern is an open question. But with the right assurances and enticements, Truong says, people have actually been excited to sign up for the project. And Gorman says people are generally getting used to the idea of broadcasting where they are, through programs like Foursquare. “I think as more people realize the reward for identifying their location, it will become more popular,” he says. Rewards could range from special-event invitations to limited-time discounts on meals.
It’s too soon to put a dollar figure on the business value. Retailers haven’t been getting the information long enough to change marketing strategies and see the results. As a result, they’re not yet ready to discuss it.
But market research giants Nielsen and Harris Interactive have both started using Locately’s technology, indicating that the potential is large. In the past, when companies such as Nielsen have sorted people into demographic groups, they’ve based their estimates on information like which U.S. Census block a person’s zip code falls into. Now location analytics provides more accurate information more quickly, says Tony Jebara, chief scientist and cofounder of Sense Networks, a location data analytics company in New York.
By analyzing where people go as well as where they live, the company’s algorithms are able to sort consumers into “tribes” such as college students and young urban professionals. Jebara says his company has deals with two cell-phone carriers that he won’t name, which are using its software to develop aggregate profiles of customers. The carriers, in turn, will be able sell those profiles to marketing agencies or retailers.
Locately’s Fulford-Jones is optimistic about the potential of location analytics to extract business value from data that couldn’t be gathered before, assuming that consumers are willing to coöperate. “The cool thing about this data,” he says, “is because it’s new, even small slivers of it are really helpful and useful to business.”