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August 13, 2014

Context-Aware Mobile Services to Drive Big Gains in Location-Based Services

Sometimes it's a great thing when a mobile device knows where its users are. It can be the kind of thing that helps users find great restaurants or great shopping regardless of current location—or even just find a way to and from a current location—and that can be great, especially for travelers of any stripe or those who have recently moved to a new location. But the idea of location based services is about to see some very big gains, according to a new report from Juniper Research, who recently released a new report featuring a highly favorable forecast for the location-based services market.

The Juniper Research study in question—titled “Mobile Context & Location Services: Navigation, Tracking, Social & Local Search 2014 – 2019”--showed that the entire market was expected to hit $43.4 billion in revenue just by 2019. That's an impressive number by itself, but it only gets more so when the earlier numbers are considered; the 2014 market for such things is estimated at around $12.2 billion, meaning that the final number will more than triple by the time it's all said and done if the numbers bear out.

So what's driving these impressive numbers? Social apps are the biggest supporter, with apps like Facebook and Twitter drawing in big numbers from advertisers thanks, in part, to that location-based capability that allows marketers to more narrowly focus advertising on a geographic basis. Social isn't alone in the field, however, as local search functions also prove attractive, particularly with releases like Google's deep-linking application programming interface (API) helping to drive further use of the concept.

Further, the report also took note of the growth of in-app purchases (IAP) in the market, which is set to grow around three times faster than the pay-to-download business model. The report notes that IAP will be more readily noticeable when it comes to social apps, as well as tracking and navigation apps, than in others, with developers pushing long term relationships and “lifetime value” over the short-term gains of one-time purchases.

But the report also offers some cautionary notes as well, pointing out that mobile ad presentation needs to see some improvement before it can claim the success that other media has had, and even mobile apps will see some changes as new tools like persistent search and deep linking exert fundamental change on the wider industry.

It hardly strains credibility here to suggest that there will be big growth in location-based services as long as there is reason to travel to other locations that aren't your own front door. Even in places that users know comparatively well, there's call for such services. All one need do is ask, “Do I know every great place to eat, shop, or have fun in this town?” and then that user will likely discover that a location-based service will have some heretofore unseen value for that user. It's amazing what can be discovered just from local search, but trending into the next town, or the next county, or even another state can prove a great opportunity for location-based apps to show off the value brought to the table.

So it's not a surprise that location-based services should see big growth; the time when any restaurant can deliver to the front door by drone aircraft is not yet, and not every business is online only yet either. So as long as there's a reason to leave the house, there's a reason to have a location-based app.




Edited by Adam Brandt




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