So the way I see it Google is not rolling out Latitude on Orkut, but instead via Maps and Gmail/Gtalk which on one hand makes perfect sense given the number and geography of users, but on the other hand makes no sense because this product is so VERY PERFECTLY suited for social networking. So if Google is rolling out what essentially is in its essence a social networking capability, but not plugging it into its existing social networking application… what is up?

Hmm…

- Latitude, lets you know the whereabouts of people and share your whereabouts with them.

- Orkut, Google social networking application, suprisingly not seeing much uptake outside of Brazil and seemingly not being pushed or invested in by Google despite massive popularity of social networks such as Facebook.

- Google CEO Schmidt says “The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a huge revolution… the recreation of the Internet.”

Everyone in LBS always has the debate on whether location is just a feature of something else or its own thing in its own right? I am wondering if maybe Google sees social networking in the same light, simply as a feature to something larger. Latitude is without a doubt a social networking feature and Google is baking it into its core product capabilities… makes you wonder if we’ll have a separate social networking site we visit in a few years from now or if it will be just become an extension of every day communication tools we use. Look up Bobs phone number and email and while you’re at it read the top 25 things I never knew about Bob as well as who he is friends with, where he is right now and what he is blogging about, etc.

Maybe Latitude is one the first anchors in this development?

He describes the company as an analytics company, like Nielsen, with a particular focus on segmentation analysis, and importantly one that doesn’t deliver anything directly back to a single end user, but rather allows its business customers to have a better understanding of aggregate customer behaviors.

Sense Networks pulls together call data and location data from 10 million devices, and slices and dices the data in a variety of different ways to provide, what it hopes, is a useful analysis for companies. The subscriber location and call usage data is almost all consumer opt-in, gathered directly from wireless subscribers, and is limited just to lat, long, time and call details.

But Sense Networks uses this information, to among other things look at similarities between the behaviors of people who ‘co-locate’ (visit the same place at the same time) and to draw out information on commutes and distances traveled based on changes in location. They also combine the location and call data in with other information sources that paint a picture of the places/geography around us that allow them to make inferences about people based on their visits to certain geographic areas.

The output from Sense Network could be used as stand alone “research” or could also be integrated into other corporate services or platforms like the mobile ad serving solution, Ad Orchestrator, from Ericsson for example.

Needless to say, the company has gone to great lengths to protect the identity of the individual customers behind that data and purposely does not receive any personally identifiable details or ID numbers tied back to a particular mobile device.

As I have said in previous posts, I believe that there is something potentially very big here, particularly for marketers, in a deeper analysis and understanding of actual human behavior around the places we all visit. Do people tend to go to ice cream parlors after sitting for 2 hours in a movie theatre? How do most people who arrive by airplane get from LGA to Manhattan? Does it vary by time of day? Where do fans go after a day game at Yankee stadium? How long and far are they traveling to see a game?

I was a bit surprised to learn that at the moment Sense Networks seems quite focused on serving the wireless carriers themselves, with a significant focus on reducing subscriber churn, which presumably digs as much into the call data as anything else. But the potential behind the location data just seems enormous, so I’d hope and expect to see more on that front in the months and years to come.

While there were few direct answers here, the read between the lines answer seemed to be that “we’re not sure but we’re experimenting with a bunch of different things”… premium services add-on’s seemed to be a popular option. But it was also clear that regular old banner ads just didn’t seem to be cutting it, bringing in maybe just a handful of dimes per thousand… which when combined with a respectable, but not overwhelming, audience of a few hundred thousand users, wouldn’t amount to much. One of the speakers did throw out that with some of the geo targeting qualifiers, they saw CPMs jump into the few dollars range. Overall it sounded like some of the core economics around the costs of location dips and maps made it challenging to make it work on the pure low network advertising cpm’s model, so CPMs needed to make it into the dollars to make it work.

The moderator of the panel Claudio Schapsis keeps a running tab on all the new location based social networks popping up, and its getting to be quite long these days. Not surprising some of these guys are coming to the realization that it will become tougher and tougher to compete and grow as a stand alone consumer destination, and are instead switching gears to help bring the goodness of location awareness to people who already have large existing networks.

Last week there was a really good article in Business Week on Sense Networks, which I think is one of the more interesting companies out there in LBS.

I had posted about Sense Networks previously, but the Business Week article gives a nice long overview of some of the recent developments.

The article focuses a lot on the tribes and the study of the behaviors of those within the tribe for the purposes of mobile advertising delivery, which is very interesting indeed, but we may have quite a wait before that information could be put to use in a live, on demand ad call, particularly since there seems to be a lot of pushback to using such information on an individual user level, as opposed to in aggregated form.

The whole article made me think about drilling down on the places rather than the people and how old school some of the current marketing tools really are and how a refresh may be in order. Take for instance target marketing by zip code. First of all, if the U.S. covers over 9 million square kilometers, and includes 43k zip codes, that means on average a zip code covers 213 square kilometers. Sure there are some sweeping generalizations you can posibly make about everyone in that 213 square kilometer area, but they would be just that… sweeping generalizations.

I just had a look at a map of my hometown zip code in Gainesville, Florida which is home to the University of Florida and which in many ways is a pretty dichotomous place, where conservative deep south meets liberal college town, and just eyeballing the map I can think of at least four different ‘areas’ of residences which probably have little more than a love of Gator football and a Publix in common.

The zip code covers a good chunk of the city which includes areas of student oriented housing full of 18-21 year old undergrads, at least two good sized trailer parks, a very large upscale development full of mostly white collar families, and at least a few farms. Now I don’t know how many people fit into each of those four ‘types’, but I am sure there are marketers in New York buying that zip code thinking they’re getting college students, and well I guess they’d be probably about half right, but it’s certainly not the complete story.

Zip codes were designed to help the government get the mail out to you, and in todays information age they seem about as useful for marketing as the dewey decimal system is for organizing and helping you find the worlds information.

Maybe we’ll see a Sense Networks “Network of Reservations” to go with their “Tribes” which can reveal some details on the territory within those zip codes and clump similar reservations together for use by marketers on and offline alike.

No matter how many ads for the Albertson’s $9.99 case of PBR special my parents see, I don’t suspect that, even in this economy, they will become buyers anytime soon.

Tech Crunch had one of the best summaries of why it makes sense and the nice fit between the two companies… the article is definitely worth a read. My two cent summary from that article and others on the deal:

• Google has talked over and over again on the potential they see for mobile in general as well as location aware mobile, and this is still early times so buying the leader now for $750 million was probably better than waiting another couple of years and paying closer to the $3.1B they paid for Doubleclick
• AdMob is somewhat reminescent of an early doubleclick, back when they still ran an ad network business, although without the customer concentration issues Doubleclick had with Alta Vista back then
• AdMob was supposedly doing ~$100 million in gross revenue with a 60/40 rev share with publishers/app developers, and already growing at a fast clip, with some particular success in applications
• the aquisition of Doubleclick didn’t help Google much in the mobile world
• AdMob had a strong presence among the long tail of the small publisher and app developer community… sound familiar? The mobile long tail of app developers and wap site developers is quite similar to the long tail of web pubishers that has been the goldmine for Google
• Apple Iphone/itouch devices made up nearly half of ad requests, so its a great way to profit from the popularity of that platform… and expect that Google will make this a key component of the offering available to Android application developers as well, creating a nice premium display smartphone mobile ad network for advertisers.

So, on the surface there is not much related to location awareness going on here… just a large mobile ad network that has great potential to be a leader on sophisticated high end smartphones given their current success on iPhones and soon on Andriod phones. But these same devices are the ones that will be leaders in bringing new location aware consumer services to market and you have to think that location relevance targeting will be on top of the development list.  The folks from IPG seem to agree… from their Future of media blog:

“Google does location very well. AdMob’s one “weakness” is a lack of hyper-location targeting. Google’s problem with hyper-location targeting has been one of scale – only a handful of apps were being powered by its in-app solution. With several billion ad requests a month, AdMob will add the scale to allow Google to roll out a location targeting mobile ad solution. It’s highly likely that this will be one of the first major things to come of this acquisition.”

So to those not in that industry here is the best I can do in summarizing what’s going on here.

The amount of display ad inventory available online is absolutely massive… far more than the supply of advertising dollars chasing it… so the price someone is willing to pay to serve any old advertisement to a random Internet user is pretty negligible. Meanwhile, the internet advertising industry long ago went down the path of selling itself as a data intensive, highly measurable and result oriented medium… and for better or worse is generally stuck with that description.

So… the name of the game nowadays is to not just serve anyone on the Internet any old ad and call it a day, but to serve a very specific group of people, sometimes a very specific ad, and measure what happened afterwards to see if it ‘worked’ in terms of driving clicks or purchases… rinsing and repeating until one gets the desired result or gives up and tries for a new result instead.  The more highly correlated a given piece of information is with some desired activity like a click or purchase, the more valuable it is.

So some folks are making tens of millions of dollars doing very little more than going to an open advertising exchange and buying low cost impressions generated by people they know, and then adding in the information they have on those folks in order to more effectively target ads in a game of information arbitrage.

The vast majority of folks are focusing on the part of the equation around WHO will be shown what ad… which can be things like people who shopped online for flat screen tvs in the past 30 days, or people who checked an online stock portfolio in the past 24 hours, or someone who just read reviews of new cars on an auto oriented site.

A great recent example of this is a company called Magnetic (http://www.magnetic.is) which just raised $5 million in funding some top VCs, and a company that PaidContent thinks could be part of the next big wave in online advertising.  What Magnetic  does is provides advertising re targeting data off of searches conducted at one’s site. So not only can site owners continue to run a Google AdSense for search program directly on their own site, but let’s say you’re running a car blog and someone searches for “Ford Mustang” on your site and later heads over to  somewhere like cnn.com to read about the disaster in the Gulf.  Ordinarily there is no way to know that a reader on cnn.com reading about the disaster in the Gulf may be interested in a Ford Mustang, but using a system like Magnetic allows CNN to directly get this information and try to use it to charge more for their ads, or alternatively ad buyers for someone like Ford may not even concern themselves with specific sites and instead simply buy people who have searched for their brand or products wherever they may go across the web, through purchases of ‘individual cookies’ via blind advertising inventory exchanges. 

Another similar example is aCerno which was recently acquired by Akamai for $95 million. aCerno uses consumer shopping data gathered from a co-operative of approximately 550 major e-commerce sites, to re target advertisements across the web based on their online shopping behavior. 

The key words to keep in mind about where the industry stands today is terms like “shopped online”, “checked an online portfolio”, “read an auto site”… notice one thing in common here… all these behaviors are taking place in front of a computer screen. But what about the vast majority (95%) of the times when all those folks walked into a Best Buy store, Fidelity retail brokerage or stepped foot onto a Ford auto lot to do their commerce the old fashioned way offline?

There is no reason why this game of information arbitrage needs to be limited to purely online behaviors, or to the traditional browser of the PC based Internet.

Is a guy who spent three and a half hours sitting in Yankee Stadium four separate times last month probably a better prospect to buy Yankee hats, mugs, and jerseys gear than the general public? You betcha. 

Is a user who spent 45 minutes at a local Ford dealer lot last Saturday, potentially someone in the market for a car with higher than average intent to purchase a Ford vehicle? Probably.

So you have to think that it won’t be long before all of that algorithmic, arbitraging media trading that we’re seeing online these days begins to bleed over into the world of offline meets online, using location data at the center, in fact it’s nearly here.

Now this could very easily turn into another rah-rah post about why mobile social applications like Foursquare, Gowalla, Loopt and MyTown are going to take over the world… they get you to fork over information about your whereabouts and that information can be digital adverting gold.

But I am not sure I am ready to concede that this is something for mobile social networks to own…  do you really need a user to push a button to tell you where they are in order to get that location information? Per a recent L.A. Times article, the latest Apple iPhone terms and conditions changed to include a section related to LBS where they declare that “Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device” and the article also makes note of Google’s similar geo data collection policies for Android Phones. 

For at least a few years now companies like Sense Networks and Placecast  have been working with large volumes of aggregated location data, collected from a variety of places, in an attempt to unlock the value contained within a long history of geospatial locates.  So there are obviously other ways to get at this raw data and make it valuable beyond the self reported (and self serving?) check in, which after all is just a small snapshot of activity of a few million users at best. But how valuable is a string of user locates as stand alone data?

In the current online world, tracking a search query or information from a web page to turn it around for re targeting purposes is relatively straightforward since everything already exists digitally. But when someone goes SOMEPLACE in the real world now, the digital documentation about that place is currently pretty weak…  so going to a position in space at some point needs to get digitally mapped back to the vast reservoir of digitized knowledge that we have about that space.

Folks like Localeze have started us down this path by making business listings more rich versus the dry name, address and phone numbers of the days of the yellowpages, but they’re coming at it from a perspective of web and local search.

Meanwhile an interesting new company called PlaceIQ is coming at it from the perspective of painting a better contextual picture of the places people visit. In the same way that ContextWeb tries to understand the context of the content on a webpage to serve a better ad, PlaceIQ is looking to better understand the context of a place to serve a more relevant mobile ad to folks at that location, not based on the content within a mobile site or app, but on the geographic space surrounding the customer at that time.  Taking it a step further PlaceIQ, similar to companies like Magnetic and aCerno,  will look to extend that knowledge of place to using information about historical presence at places to better target advertising via re targeting… like a mobile ad for a Derek Jeter jersey targeted to someone who attended a game in Yankee stadium a few days earlier.

Just knowing that a person is at a given latitude and longitude alone may turn out to be about as useful as knowing someone is on the web… and from an advertisers point of view, pretty low value. But if that latitude and longitude can be resolved to a place, and a ton of other information assigned to that place, then a new rich dataset for targeting and re targeting across the mobile and geoweb will evolve with location and presence at its center.

Now in the olden days when you just bought a printed foldable map this didn’t really matter much, but nowadays in the modern inter networked world of digital maps and folks creating a dizzying array of new services helping connect people with locations, it matters more.  Now within a single stand alone application like say a TomTom navigation device there is probably not much thought put into what you name a place, but in the web2.0 world where interoperability and information sharing reign, everyone needs to know what location everyone else is talking about when someone is talking about the business at 4151 North Central Expressway.

So rather than just getting everyone to try to agree on a standard, which could take years and years and would probably be a lot like herding cats, Placecast has announced today that it has developed a technological solution to the whole problem and they’re opening it up for free use.

The product is called the Placecast Match API…. and it’s described as “a Rosetta Stone for location data”. For those that need a refresh on their ancient Egpytian artifacts, this basically just means that they will provide a way to translate between the different “languages” that different services use to describe locations for the purposes of enabling interoperability between those services.

There is a great article on Tech Crunch that demonstrates how this problem manifested itself in the hot area of mobile social networking and the battle of the check-ins where folks may want to check in somewhere on a number of different services without having to fire up each service independently and do it manually. Given the viral and social nature of services like Foursquare and Gowalla, I guess it’s not surprising that this is where we’d first see the need for better interoperability between services.

One area where this is particularly interesting is around the area of location based advertising. One of the things that needs to happen to help ramp up growth in this area is more scale in order to make hyper local and location oriented advertising finally get on the radar screen of folks that control advertising dollars. It’s not that there are not a lot of consumers using these types of services today, there are… but usage is spread around among a lot of player.  Consumers may look up directions via Google Maps, Yahoo Maps or Mapquest, others may rely on their Garmin or TomTom devices, while urbanites without cars may just be checking in with FourSquare, Goawalla or Loopt or using one of a hundreds of local discovery services like UrbanSpoon, Yelp, Where, Geodellic, etc.

The amount of traffic to any one hyper local area on any one of these systems is likely not significant enough to create a media buy, but centrally tether them all together with a common reference point and pretty soon you have what begins to look like the beginnings of a network… a point of interest advertising network. 

Putting banners in apps and on wap pages is one approach to the location based advertising opportunity, but there certainly seems to be just as much opportunity if not more around “listings ads” connecting mobile users with the businesses they’re looking for from mobile search and discovery services and then capturing, sharing and aggregating the related check ins at scale across the ecosystem.

I am not saying that this is the Placecast end game, but something like the Match API and other similar offerings by competitors certainly seem like it could help spawn competitors to what folks like CitySearch are doing with CityGrid around the creation of ad networks tied to places.

What will be interesting  is to see how publisher view participating in such a system and the more thorough socialization of content from their system… when the depth, richness and accuracy of that content may be a significant source of unique competitive advantage.

Seems that Google is throwing its hat into the ring with its own location aware social networking app and mobile friend finder called Latitude. The news is being well covered today including a great summary on O’Reilly Radar as well as one right there on the front page of AllthingsD.com today, Silicon Alley Insider and some particularly intersesting insidery point of view from the ex Googler and Dodgeball founder. All of those give some nice details about how it works, so I won’t bother going into much detail here, except to say that Latitude seems to work like other similar services including Loopt, Buddy Beacon, Brightkite, Limbo, etc. Where the application determines your location through one of a variety of ways and then lets you share it with friends, with a number of different controls to monitor with whom and to what detail (if at all) you share your location data.

One reason that it is noteworthy is of course because it’s Google doing it… and while literally dozens of small start ups have tried to build something similar and attract users from scratch with location awarness as a core benefit, Google seems to view location sharing/friend finder as another added feature to go along with Google Maps as sort of an extension to finding things on a map (hey why not find people too?) and GMail/GTalk, as an extended way to communicate with someone you know (hey, why not see them in person as well as emailing them?). I am still trying to wrap my head around that one a bit… should current location be as universally available and shared as ones phone number or street address (ie integration into an Outlook contact field) or is it better suited at this point as another facet of your life to be shared only with a more tight and existing social network?

It does seem odd that there wasn’t a specific tie into the social networking side of Google in Orkut, where Latitude would presumably be most right at home, although news on that may still be around the corner. I am sure we’ll see something before too long from folks like Facebook, LinkedIn and MySpace as well.

I’ve see a couple of articles that seem to think that this announcement will mean the death of folks like Loopt and Limbo. I think this may be premature, heck in the short term they may even see a nice boost as overall consumer awareness is lifted and potentially attitudes are changed… hey Google’s mantra is ‘do no evil’, so if they’re letting people track each other, maybe that’s not so bad afterall?

Once LinkedIn or Facebook comes out with something similar, then, I think we’re getting closer to that come to Jesus moment for folks like Loopt, Limbo and Buddy Beacon, who may then be relegated to being a white label solution to power the location element of other existing communities/networks.

If Google is doing it in a big and mass way, and Mossberg’s squad over at the Wall Street Journal are reviewing it and putting it on the front page of allthingsD then I think it must be pretty close to going mainstream. I for one can’t wait to see a higher level of consumer consciousness and adoption, so we can begin to move along with all the other cool stuff that first requires getting this basic concept acceptance under our belts.