For those that didn’t make it to last years’ inaugural conference, then named Metaplaces, I highly recommend it.  It’s the biggest concentration of like minded business folks that you’re likely to come across… and while last year had a lot of focus on monetizing the mobile social networks,  this years agenda covers a lot of ground spanning the spectrum from augmented reality to well Bloomberg and containers of oil floating across the ocean.

So the LBX Journal has a great Q&A with Andre Parris, global business manager at Bloomberg behind the Bloomberg BMAP application and he is going to present a case study about BMAP at the conference.  I also had a quick run first hand on it on my neighborhood Bloomberg Terminal, and I must say that it was pretty cool.

For those not all that familiar with Bloomberg terminals, they’re specialized machines used to tap into vast reservoirs of highly specialized data used primarily by the financial services industry… over ¼ million machines are in use and folks, mostly corporations,  pay a hefty price for the depth and super high quality provided by the service. It’s not just the access to information, but also the speed and ease at which a user can get at data and the tools there to help them to ‘interrogate and analyze the data’.

So in the world of oil and energy and gas, factors related to the production and movement of physical products is quite important… according to the LBX Journal articlethe Energy and Commodities Group is the only physical business at Bloomberg, and physical things demand maps according to Mr. Parris. So  the BMAPs initiative was developed to help add a new and powerful dimension to the interrogation of all that industry data, that was previously  there, but just more difficult to digest and analyze without the visualization provided by a powerful mapping platform.

For map nerds the first thing you notice about BMAP is how fast the map photo imagery renders and how fast and smooth the pan and zoom function… it feels like something you expect Jack Bauer to be swishing around on a screen in front of him at CIA… err CTU headquarters… except that it relies on good old fashioned arrow keys and a mouse.  In fact it feels a bit weird using old school DOS like prompts to work on a Bloomberg terminal, but I am sure that research shows that it takes .0234 seconds to get data by striking a button, versus .03465 seconds for aligning a mouse… and I suspect that is all that really matters.

For finance nerds well the first thing you notice is that you can see a lot of really powerful information pretty easily. Where is that $25 million worth of crude that was supposed to be delivered to LOOP last week? Clickity, clack, clack… ah there it is third in line to get through the Panama Canal. What about that tropical depression in the Caribbean? Clickity clack clack, ah good, just a 12.28% chance that the projected path will cross with the ship.  Now who else is headed to dock there in the next five days? Clickity clack clack. Model, model, model . Trade, trade, trade and voila! Fifteen minutes to get to Scores before Misty goes off the clock!

For Bloomberg customers an information advantage is everything… having access to the data is not enough, its gotta be fast and as easy to digest as it is to slice and dice… oh yeah, and for what you’re paying for the machine… it should look good too.  BMAP does all of the above pretty damn well.

But the presentation and tools surrounding the data are only as good as the data itself… and particularly when it came to tracking ships I was a little surprised at both what seemed like a dearth of oil ships floating around as well as a the lack of freshness of the locate signals… with over half on one screen having been without a location fix in the past 24 hrs…. potentially either a designed security measure or  an opportunity for someone in the asset tracking business to start chatting it up with Mr Parris at the conference!

• first of all if you don’t already read The Next Web and their coverage of location, you really should…  they did a lot of posts on Facebook Places, full of great insights. I thought the one titled “Why I deleted foursquare for good” was particularly good.  That and pretty much all of Greg Sterling’s Screenwerks blog are great sources of info
• I also saw the re tweet ‘news’ that FourSquare had its busiest day ever in terms of new user signups for Foursquare yesterday. I think this just further supports the thought from my post yesterday that when starting a new company AND a new category simultaneously, that the threat of customers never having heard of you is as big, if not a bigger threat than competitors. Facebook users hear buzz on new location features… go to figure out what its all about… see lots of talk about FourSquare… decide to go check that out too.
• after having played with Facebook Places a little bit yesterday, I am even more convinced that it will be huge. It may take a while for it to truly go mainstream, and I am sure there will be some tweaks along the way, but it’s quite easy to envision Facebook users happily posting where they are en mass in a few months the same way that so many people on Facebook currently use it to say post photos.
• within moments of getting it running yesterday I saw a place update from old high school friends I haven’t spoken with in decades… nothing close to being techy types. One in particular updated that he was “working” at Location XYZ, one click and a zoom later I could see that he was “working” at a cancer center in XYZ city in Alabama… two great pieces of information that I would have never known about this guy otherwise. Now I am not in that area of the country very often nor do I know anyone that has cancer, but its valuable information to have about my friend and who knows when it may come in handy.

I have noticed that my attitude toward when to check in with Facebook is a bit more thought out. When I first started on Foursquare, I found myself checking in a lot more… bagel shop, checkin, gym, check in, playground with kids, check in. The gaming part and brief thrill of mayorship and badges made it fun for a bit. But now with both, I am finding that I only check in when I am somewhere new or noteworthy (relatively speaking of course… no plans to crash the White House State Dinner anytime soon) or if I think others I know may be around.

Now that I know I am pushing check ins out to over 200 people, the vast majority of whom I know and like, well I don’t want to subject them to the fact that I am at the gym or the bagel shop, I really can’t imagine anyone cares. But for some reason I did it with Foursquare for a while. It’s not just about the number of people who I’d spam, but also with Foursquare it felt like it was more about a connection with the place… while with Facebook, it’s more about a connection with my social network.

Perhaps that’s still an angle here to be explored for someone in this space… I won’t check in at my gym or at the bagel shop on Facebook, but I’d still be willing to check in there if there was something that made it worth my effort, it doesn’t need to necessarily be free stuff or discounts but I am not sure a virtual mayorship is going to do it for most.

I am sure the details of what IT is will be reported all over the web, so I won’t go into all those details here… but I watched the video of the conference announcing it and major kudos to ex Socialight’er Michael Sharon (product mgr for Places) for what seems to be a nice well thought through execution… someone like Michael obviously “gets it” more than anyone, and I think that the feature will be a huge hit.

As a pretty passive user of Facebook, the thing I enjoy about it the most is the ability to easily keep tabs on friends… real friends that would often otherwise have been lost and mostly forgotten.  Finding the latest pictures posted by childhood friends or hearing what people back home are up to, even if just occasionally, make it worthwhile to keep checking back in.  And I think that the places feature will only enhance that.  Is so and so still going out five nights a week, does anyone still go to so and so bar, does the old crew still hang out together? The stuff we did and the places we went were a big part of those relationships and Facebook Places has great potential to make those connections even stronger by adding places into the mix.

For the folks that use Facebook as a digital extension to their real time socializing, there is no doubt that tethering all of that to something that exists in the real world, a place, will be hugely popular. You can already see the potential:
• “OMG, did you see that Jennifer was out at 2a with Bob at the Waffle House?!”
• “Yo Greg, I see Sam is there with you, tell him he still owes me ten bucks! I am coming by in 30 minutes to collect!”
• ”I am bored, let me see where my friends are so we can meet up.”
• ”Look at how many times I’ve been to Joe’s Bar and Grill, they should make me mayor or something.”

While I’ve been a regular user of FourSquare, Gowalla and MyTown for a while, my biggest complaint with those services would have to be that there are so few people using them, and therefore the reason to use them and the benefit I got in return was often limited.

Facebook on the other hand may have the opposite problem, even as a pretty passive and conservative Facebook’er I’ve still accumulated 212 friends over the years,  the vast majority of whom I would actually like to serendipitously meet up and have a drink with…. BUT if they live in California, Georgia or Florida and I am in NYC, there is only a very small handful of those 212 that I really want to see all their check-ins. For the others I’d certainly like to know if they’re nearby, but don’t really care if they went around the corner to their neighborhood bar in San Jose… sure I might like to look that up later if I am ever in San Jose… but to post every check in to my friend feed could very well turn it into meaningless noise, like my twitter feed, that I have to fight through to extract the relevant stuff.   

I am not so sure that this means immediate termination for folks like Foursquare and Gowalla either.  Will it likely alter their sky-is-the-limit trajectory, yes I think so, but when starting what is both a new business AND a new sector, it seems to me that the threat of ambivalence or general lack of awareness among the mass public is at least as threatening as competitors.  And while Facebook is undoubtedly a formidable potential competitor for those guys, they also announced both read and write APIs and went as far as to have the Gowalla and FourSquare guys there for yesterday’s big announcement as partners.  Having Facebook push out Facebook Places in a prominent way to its ½ billion users should go a long way to overcoming the general ignorance of what social location has to offer.

There has been a lot of talk in the press about Foursquare becoming THE location platform of the future, but I think you have to seriously re evaluate that idea with the launch of Facebook Places. Facebook is already well down the path of being the most powerful social platform, and they are obviously taking their entry into location very seriously, so it seems hard to believe that a social location gaming start up, even one with as much hype behind it as FourSquare has, will be able to elevate themselves to platform status in light of these events.

Since I, like a lot of people don’t yet have Facebook Places up and running, despite the announcement that it was available immediately yesterday, this is all speculation and hearsay based on hearing how its supposed to work. But I look forward to trying it out…  it certainly seems like one of the closest things to a game changer that’s been announced in a while.

Causeworld
First a quick word on CauseWorld.  As far as I can tell it pretty much works like this… you load up the app on your mobile phone, check in at retailers and scan bar codes on products and earn karma points. You can then donate those points to one of the available charitable causes, and of course post your ‘achievement’ to your social network… a seemingly prerequisite these days.

It seems that at some point the number of karma points each charity has received dictates what share of the corporate donations pool they will receive.   The whole thing feels a wee bit disingenuous, consumers who check in aren’t donating anything, rather they’re casting a vote for where some big corporation donates their money. 

There is a big quote on their site from Michael Arrington at TechCrunch saying that the service encourages big corporations to give more… it’s a bit unclear why or how that is, but presumably if big corporations feel like they’re getting consumer interaction with their products, and consumer behavior data in return, it’s conceivable that it’s a better ROI on your charitable contribution than just slipping the Red Cross a check under the table and entering the appropriate amount on your tax filing each year. 

The big winners seem to be CauseWorld itself and donors. According to an article in CIO magazineCause World takes 20% for its services, and big corporations get more for their donation buck. Meanwhile presumably that 20% cut from Causeworld comes out of the charity’s pockets. For big charities this may not be the best, but the service could potentially be a big plus for lesser known charities that now benefit from the power of consumers promoting their interests in certain causes, maybe a great way to get noticed if your charitable cause flies a bit under the radar… and 80% of a donation is better than 0% any day.  The consumer meanwhile is basically trading off the time and energy to do the work and giving out information about their behavior in return for the right to steer big corporate giving and the ability to easily promote charities of personal interest and also to promote their own personal ‘achievement’.  

If nothing else, it’s an interesting combination of value creation for the various folks in this industry and demonstrates the value that different people (corporations and consumers) place on giving and receiving digitally captured information related to real world behaviors.  Consumers seem pretty happy to give it away, with little more than a little social creds and feel good in return… and corporations, well are happy to get the consumer interaction (and information), even if it means that 20% less of their money actually makes it into the hands of charitable causes.

ShopKick
Ok, so now that you get the idea behind Causeworld, Shopkickisn’t all that different… consumer still both walk into stores and scan items and get credit (called kickbucks) for  doing so, but the reasons why and the technology is a little different.

First, the motivation for downloading and turning on the app when you enter a store, and for scanning items etc is to earn points and to receive special offers. Special offers are things like 10% off anything in the store, or maybe a special item on sale.  Consumers can also earn points along the way for doing things like entering a store or navigating to a particular section of the store… points are later convertible into various things like Facebook Credits or gift cards, or with enough points you can just outright buy an item like the Twilight DVD… with 4,400 kickbucks.

And while you can still sit in your house and check into places in your neighborhood and scan items in your fridge, you only get a few measly points for doing so.  However the real intent here is that you’re in store and the unique ShopKick technology really tries to reward that.  Participating stores install little speakers around the store that transmit an inaudible signal that is recognized when the Shopkick app is running on an iPhone or android device… physical proximity to those speakers, and the ability for the device to hear the signal is what determines when the big points are awarded.

The whole business premise here seems to be around allowing retailers to better understand who is in their stores, before they buy something, and to help retailers service and reward these customers… and also to get consumers to pick up and interact with product all while providing a better shopping experience for consumers.  Since the speaker technology ensures that a consumer is actually present, there is the added benefit of knowing that real foot traffic occurred within the store. So if Best Buy wants to get more people into say the camera section they could run a promotion in the app upon entering the store that pushes customers to that section, and then measure the results… theoretically something ShopKick could get paid for helping make happen on a “cost per” basis. 

The general concepts here are good ones in theory:  measuring presence at point of sale, get consumers to pick up and interact with real products at point of sales, offering specials based on preferences and when you enter the store, not at check out, and rewarding frequent shopper.  And it seems to be getting enough traction that Best Buy is experimenting with the technology with plans to roll it out in 187 stores in San Francisco, Los Angeles, San Jose, Chicago and  New York City, as of today.

But in reality from what I’ve seen so far, some of the theory isn’t really making its way into reality.  I used the application a couple of times today to check in at Macy’s and at an American Eagle Outfitter and here is the good and the bad:

The Good
- The little speaker technology that gives you points WHEN YOU ENTER worked flawlessly at both stores here in Manhattan along 34th street… earning me 110 points for the two check ins. Woo Hoo indeed! I took 100 of the points and converted them into 4 Facebook credits and I hope one day to figure out what those do.

The Not So Good 
- I fake checked in at a few more places (including a place that closed a few months ago) and got three more points, and tried scanning some products around the house but as I may have mentioned I hate scanning products and after trying for 3-4 minutes and finally getting a pack of Swiffer wipes to register I got an error message saying it was the wrong product. Beats me why, they were definitely Swiffers… maybe they secretly knew I was really in my laundry room instead of at the Duane Reade across the street… and that was just a nice way to deny me my kickbucks.

- The key goal of ShopKick is supposed to be to make my shopping experience better, but I am not sure it really did that. Checking into Macy’s ShopKick showed me a handful of ‘offers’… and two looked vaguely of interest… a pair of Nike Monarch shoes for $49.99 and some Ralph Lauren Polo shirts for $19.99 (the cheapo ones). The problem was that they didn’t have the shoes in stock, and there was nothing special about the price of either… in fact the shirts happened to be on sale for $14.99 anyway, so I felt like I was better off just looking around the store for big red “sale” signs.  The app wasn’t helpful at all in helping me find the featured item in the massive department store either.

- The experience at American Eagle Outfitters was a little bit better, when I walked in a sales associated immediately told me that all jeans were on sale and he was backed up by about three dozen signs around the shop all saying the same thing… and voila there on the first screen of ShopKick appeared to be a similar deal… which ambiguously enough said ‘Every Single Jean on Sale”.  But flipping through the other offers, ShopKick did me one better by offering me 15% off any purchase, so that may have been a better deal than just any Joe would have received off the street, I guess it depends on what I was buying.

The Bad
- It seems that in order to get your kickbucks points for being in the store, you need to fire up the application before you enter and leave it on as you pass through the main entrances (see TechCrunch “do not avert your eyes from the phone” zombies video to get the idea) so your phone can ‘hear’ the ‘shopkick signal’. I tested this in Macy’s by heading on upstairs away from the entrance and firing up the app and it didn’t work… I didn’t get my check in points.  Huge problem there… maybe easily fixable with a lot more hardware but currently not a good experience.   At Macy’s specifically they also missed some secondary entrances to the building, but that’s more of a minor glitch in the grand scheme of things.

-  In Shopkick points land it takes 4,400 kickbucks to get a $17 Twilight DVD. So from what I saw I’d have to do about 4,400 fake check ins, 176 product scans or walk into a Best Buy 58 times ( for 58 different days since it seems to not let you get points 2x in one day).  Also the number of products you can scan for points varies by store but the ones I saw ranged from 2 to 9 products, so assuming you can scan five products per store on average you’d need to go to stores 35 times (either different stores or different days to the same store) and scan five items to get enough for the DVD.

So the offers on Shopkick so far don’t seem all that special, and the points system doesn’t create a whole lot of motivation except maybe for those people who really shop a lot and really like to play mobile games to win stuff while they’re doing it… but frankly I think those are often different types of people, or at least limited.  From my own experience I certainly wouldn’t use it for the gameplay elements that it offers like becoming fans of places or earning badges, or even to accrue kickbucks.  I may potentially fire it up while in the store to see if there is a special offer for something I am looking for…  but to think that there is some massively new improvement on the phenomenon of checking-in here seem to be more hype than reality from what I can tell.  And thinking of all the specialized hardware that would need to be installed in the tens of millions of retailers across the U.S. kinda makes you wonder if all those fake checkins are really such a bad thing afterall.

I think it is tough to read too much into these types of surveys, when you’re dealing with new technology and the general computing public because as Henry Ford said “ If you asked people what they wanted they would say ‘faster horses’”.

Nonetheless, here are some of the highlight that I could distill from the results: 

- The big finding seems to be that once receiving a text alert from a merchant, 33% of respondents felt that they would be more likely to visit the physical store and 28% felt more likely to purchase the product promoted in the store. 

- As you might expect young people are most receptive to receiving opt in location triggered messaging.  Heck 1 in 3 teenagers sends over 100 text messages a day, so you can imagine how the occasional one thrown in there from Abercrombie and Fitch wouldn’t necessarily be a unwanted interruption from gossiping about Molly’s new haircut.  The study also found that 35-44 year olds are increasingly (6pts) more receptive than they were to the idea roughly a year ago.

- The survey also miraculously uncovers that fact that men like, and are most interested in receiving alerts on, electronics and sporting goods, ditto for women with beauty and apparel. So if a girl walks by a Home Depot, and is opted in, please don’t send her the power drill ad… you know they have a whole home furnishing section in there too!  Not sure what the point was here, but just know your customer and keep it useful and relevant seems to be the takeaway.

- It seems that nowadays when you’re talking with joe public about the subject of location based marketing, you’re less likely to get the response of “OMG! they’re tracking me, that’s creepy”… ok so you’ll probably still get that a lot, but the survey found that 37% of people thought receiving location messages ‘could be useful’ and 29% thought “it could be interesting”.  Meanwhile, 27% of respondents flat out said “I don’t like the idea of marketing messages being sent to me based on where I am.” And no, Smith and Wesson shouldn’t be allowed to target ads to that last group with texts saying “BWA-HA-HA, I KNOW WHERE YOU ARE!” even if they opt-in.

- Since this was a shopping survey, much of the focus and interest was on receiving promotions and offers. Those related to Groceries (68%),  Restaurant Chains (64%)  entertainment/movie (58%) and Fast Food (50%) topped the list of categories of interest shown by all consumers (did they survey these guys right before lunch!).  And presumably because of the economy many folks are doing more looking for coupons and promotions these days, particularly young ladies and their desire for grocery coupons (85%!).

-  The survey also shows that 14% of respondents say it’s extremely or very important to be able to search for a retail location using their smartphone.

It’s good to get some real formal research regarding consumers’ perceptions around this market.  Check out all the slides from the presentation below.

Last year when I met with Xtify, I roughly understood their business as one which took location data from a mobile device and published it up to the cloud where it could then be distributed to other web and mobile applications for use in providing location relevant services. With so much happening around the industry allowing devices to get their own location right there on the device I couldn’t wrap my ahead around the need for the service beyond some niche applications… and maybe I wasn’t alone, because the company is now pursuing a new and different tact.

Last week I was fortunate enough to attend the inaugural meet up here in the NYC area for LBS developers, where both Cloudmade and Xtify gave some great presentations. If you’re in the NYC area I highly recommend trying to attend, even if you’re not a developer… I am not a developer and I still got a lot out of it.

So I discovered during their presentation that Xtify, has turned to focus on the more broad area of messaging with a particular emphasis on a platform for managing geo-location triggered “push” messaging delivered into mobile devices without using SMS or email, “the first push notification service for Android” according to their site. 

So what this all means is that if you’re developing a mobile application and want to send location relevant messages directly to the users of your application either in-app or via the Phones native operating system notification capabilities, the Xtify platform will implement and manage this for you. Application developers will basically integrate the Xtify SDK with the application which will then operate in the background handling responsibilities like getting a devices location and sending it back to web servers, checking the location versus various rules on what, if any, messages should be delivered, and then delivering and triggering the notification back at the device.

So let’s say you’re in charge of running the Zagat mobile  application and you want to introduce a new capability where users of the application can receive special offers from restaurants when they’re either at the restaurant or nearby… Xtify could provide a turnkey way to integrate this messaging within the app and to notify Zagat app owners of the offer when they in a restaurant or nearby.  Similarly an app like Sense Networks Cab Sense, which gives you insights into the best nearby street corners to hail a taxi cab, may be able to push out useful travel related information like a big U.N. General Assembly meeting happening today on the east side of Manhattan or the closure of the West Side Highway for a bike race on Sunday, the kind of stuff local taxi riders may want to know about.

These alerts can provide a lot of value to consumers, but also help the app developer stay top of mind in what is the increasingly competitive market for attention among the growing number of applications out there.  There is of course also some significant potential for abuse here, where unscrupulous, or even just near sighted app developers could flood customers with unwanted messages clogging up their notifications in box.

Now the system seems designed to let some authoritative source like an app developer send out commercial or application oriented messages to ‘customers’ based on a number of rules, including location. But the founder behind Xtify, also started a location based dating app called MeetMoi which is where Xtify grew out of, and some of the potential related to rigging the system to allow anyone in a geographic area to push out a local area message seems pretty intriguing.  Applications like Hot Potato are trying to create specific platforms for virtual mobile socializing around events  (both virtual and physical worlds) and Anttenna is trying to similarly virtually connect buyers and sellers of goods that are nearby like Craigslist… so you might think that there is an opportunity to create a more generic local area messaging service similar to the direction Twitter is going with its geo initiatives. You can see a lot of scenarios where a drunk guy in a bar can message out that he needs a ride home to the west side of town, or a conference organizer can message out that after the event a sponsor is buying drinks at Bob’s bar next door, or a mom at a theme park that loses track of their kid can message out ‘oh crap, I can’t find my son Billy he has a green hat and red shirt, please bring him to the ferris wheel asap if you see him.’

The sort of stuff that happens by hyper local word of mouth now, could certainly use its mobile and digital equivalent, and something like Xtify may be able to help make it happen.

Check out the slides below for the full presentation from last week’s meetup.

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.

Despite claims of hundreds of thousands if not millions of users across these apps, the vast majority of my friends aren’t using it so it can get a little boring.

Recently I’ve found myself playing more and more with MyTown, last night as I waited for my wife outside Mermaid Inn, a neighborhood restaurant, I had time to check in on all three, but ended up spending 15 minutes collecting rent and upgrading a bunch of business I own on MyTown… frankly I am not sure how much longer I’ll be doing that either but it’s not a bad way to pass 15-20 minutes. And I did take advantage of the special offer that was running on Foursqaare for a free side dish at Mermaid Inn, the restaurant we were headed to anyway… a little surprise free side order of onion rings popping up in your day is never a bad thing. So maybe I’ll stick with it all a bit longer.

On a random technical side note, I did notice that the MyTown geo location feature is noticable more off than folks like Gowalla and Foursquare. Standing on Amsterdam avenue in front of three restaurants Mermaid Inn, B Cafe and Rancho Cafe I noticed that B Cafe was MIA while the other two were right there near the top of the list on MyTown with their little green indicator lights on. After a search I found the restaurant B Cafe, and they had the correct street address, yet still MyTown thought I was nowhere near the place… and it’s not the first time I’ve had to use search to find nearby places on MyTown… definitely some kinks to get worked out there.

I’ve found myself recently thinking alot about all these folks from places like Gowalla, Foursquare, myTown, Loopt.. not to mention the bigger guys like Patch, Google, and Yelp trying to sell in digital advertising to local retailers and some of the challenges they must face. 

On Greg Sterling’s blog Screenwerk he posted a video from a company called WebVisible that speaks directly to this challenge, where many local retailers talk about the various ways they think customer find their businesses (walk-ins and yellow pages types stuff) and then consumers talk about how they really find businesses in this modern age (“the Google” and the Internet). Check out the video below… the bit near the end about one flower shop setting up a page on HappyFace (er Facebook?) is kinda telling. Good luck to the FourSquare sales guys calling on that lady!

It seems that the folk that have found this most useful so far are governments and energy companies.  According to the Metacarta site, there are millions of government documents of which over 70% contain significant geographic references.

I can see how this would be quite valuable for the folks in homeland security who could now potentially  connect the dots where a CIA agent writes up a report about a suspicious character on Mott street and another agency transcribes a phone conversation between bad guys referencing a business at a nearby location adjacent to Mott street.  It’s information that may not have been connected in the past if it weren’t for the previously unseen geographic/proximity link.  

The other category where Metacarta operates is in digital publishing, particularly around news content and this is the area I was interested in poking at a bit more. AOL’s Patch product has been getting a ton of press, Yahoo just plunked down $100 million for Associated Content, and other start ups like Outside.in are all operating in some shape or form in the area of hyper local content creation or aggregation.

Creating or aggregating all of that content for a hyper local audience of what may be just a few thousand people seems like an awful lot of work. So let’s look at some numbers…

Having worked with Associated Content before I suspect that its reasonable to get a 500 word article produced for $30, and let’s say that the article is about something happening in the town of Mamaronek, New York  a small bedroom community of NYC  with a population of 18,752 (at least as of the last census). So using some oversimplified math… in order to break even on the expense of creating the article assuming un limited advertiser demand for Mamaronek eyeballs at $15 CPM, the article would need to attract 2,000 views, assuming 1 ad per page, or 1,000 views assuming 2 ads per page… or approximately 10.6 or 5.3% of the town population respectively.

Now seeing that Quantcast estimates the domestic use of Google.com at around 157 million monthly unique out of a total population of 307 million people or about 51%, it seems a tad aggressive to assume that one publisher could get 10% of a local population engaged in their content… although just for the heck of it I looked up the circulation of my hometown newspaper the Gainesville Sun which has a circulation of around 45k against a population of around 125k or over 1/3 of the population, so maybe its not so crazy!

You can kinda see where the Excel  commandos may be getting excited, saying something like “if we can establish Patch as the next generation local newspaper and get 1/3 of the population reading the site and get articles produced at $30 a pop, we’ll be rich!”

But here are a few potential glitches to that plan. For one, as the barrier to creating local content is lowered, unlike in the traditional newspaper world, the number of competitive neighborhood sites will  be more significant, so getting 1/3 of the population to read your website like the Gainesville Sun has accomplished in Gainesville, will be much more challenging… outside.in will be right there challenging Patch  for the local eyeballs with a network of other local bloggers. 

Second and probably more importantly, is the advertising demand and pricing question.  Ad networks are awash in inventory, and geo targeting is just a simple check box away, so the eyeballs are already available at CPMs in the low single digits.  While small local businesses will be sold directly and the vast majority have never heard of advertising.com, I am not sure you can expect them to pay large “local content adjacency” premiums over the long run.

A quick perusal through the Patch job listings shows a lot of emphasis on the business directories business, so it seems that AOL may be trying to hedge their bets even further against the premium display CPM ad business  and trying to cast a wide net capturing ad dollars previously headed for local premium display, classified, and yellow pages.  Then there is the whole behavioral/re targeting opportunities when folks from the local sites show up later elsewhere on an aol property and upgrade the value of that inventory as well.

You can start to see where this local content begins to look like a valuable opportunity once you can get the production costs low enough and local ad sales folks in place… it all makes sense on a spreadsheet at least.

But what resonated with me most, was chuckling at the business listings that were purported to be surrounding me as I drove down fifth avenue on to Central Park South… home to some of the toniest hotels and shops like The Plaza and Pierre Hotels. According to my Nuvi right next door to those hotels was supposed to be a place called AAA Als Towing and then a few blocks later an auto repair place… yeah right, how many auto repair and tow places do you know paying more than a few grand per square foot for such prime real estate…  it was apparently the early days of POI spam, or at least a really bad dataset.

You’ve probably seen articles about the locksmith map spam problem on places like Google Maps, but its much more than that… the industry as a whole suffers from just really poor information related to documenting places… for too many years the map and navigation device makers were seemingly so focused on getting folks from point a to point b and documenting the roadways they’d use to get there, that they forgot about all the places in between point a and point b where you may want to stop and gas up or grab a bite to eat. 

But nowadays things have changed and folks are giving away the capability to navigate from point a to point b and looking for ways to make money from getting you interested in making stops along the way.

As I mentioned a few months back a company called Placecast is trying to help bring together the disjointed state of POI data, to help move the industry forward, by introducing a product called the MatchAPI.  What the MatchAPI does is allow developers to send in a reference to a geographic location through the API and receive in return any other references in the system that are a close match. The reason something like this is necessary is because there seems to be so many different proprietary datasets around without any centralized and unified source of reference to help connect them. Let’s start with a simple two dataset example where a company has a list of movie theatres from one source like Navteq (where they get all their POI data) and then wants to go to a different vendor like Fandango to get movie times and reviews for the movies happening in those theatres.  So if there are a few thousand movie theatres in the U.S. you can see how the task of matching up the Navteq list of theatres with the Fandango list of theatres could be pretty labor intensive… that’s one area where the Match API can come into ease some of this pain.  Now if you wanted to do something similar with say the 1 million or so restaurants from that same Navteq POI set in the U.S. and linking in all the Yelp reviews tied to those restaurants… well you can only imagine the amount of pain that the MatchAPI is alleviating.

But where things can really start to take off is when various systems that rely on “place” can more simply and seamlessly integrate and “speak” with one another on the fly, creating a much larger opportunity for all the players involved when the network effect begins to kick in. 

Right now there are hundreds if not thousands of location based services all largely operating independently with their own systems, definition of places and customers.   When the ability to share information between these services becomes more seamless, not only will the value to users increase dramatically, but folks like advertisers can begin to view this industry as a cohesive ecosystem, and one that has some meaningful  scale and reach which will expedite this becoming a viable new medium for them.

Right now even the most successful Location Based Services in the U.S. just have a few million active monthly users, which won’t put them on the radar screens of many big national advertisers.  In a way it’s all similar to the way that DoubleClick first helped cobble together a bunch of small websites into an online ad network and create a highly simplified way for advertisers to buy a large volume of eyeballs over 15 years ago. Right now if McDonalds wanted to throw in a two week promotion of their Shrek Glasses in the business listings for their 31,000 stores across all the map platforms, navigation devices, and LBS iPhone apps… well they probably couldn’t do it without a small army of buyers, designers and integrators.  This is the pain that the MatchAPI could eventually help go away.

Just today Placecast came out with news that after 60 days of having launched the MatchAPI platform, they’re finding that error rates in the data they’re seeing runs anywhere from 8% to 40% depending on whether it ‘professional’ data or ‘user generated’… finally a somewhat quantitative representation of all those towing and auto repair shops I noticed along Central Park South.   

For the nascent LBS industry there is no way that this becomes a big and viable opportunity for marketers if 8% to 40% of the time you either send someone to the wrong place, send them to a place that doesn’t exist or is closed, or give them the wrong phone number,  etc. … so fortunately there are folks hacking away at trying to help solve some of these problems, so we can move along to some of the bigger and more interesting innovations that are possible.