You’re currently not going to get much information from the website yet, other the fact that they “transform location into context”. So what does that mean exactly?

Well it may help to back up and think about how context comes into play in the world in general.  Context is the just the stuff around something that helps you relate to it or understand it better.  So, seeing the situation around a person or the other words around a word create context which can trigger something in your brain that help with your understanding… and advertisers hope that this context makes you more receptive to what they have to say.

The advertising world pretty much revolves around the concepts of audiences and context… in fact advertisers just love context. For many it’s not enough to just get your ad in front of a 1 million people, it needs to be the right 1 million people and ideally at a time when their brains are well tuned to whatever it is you want to tell them. Which is why an advertiser of salad dressing might choose to place ads in Better Homes & Gardens (the right audience) adjacent to their food editorial (right context) to communicate to women who may be planning the next meal for their families.

In the online world the same thing happens… if Delta wants to advertise new low prices on flights, where better to do so then in the context of a travel site? If Mattel wants to advertise their newest Spongebob licensed board game, where better to advertise it then on the pages of Nickelodeon.com (the right audience) in the Spongebob games section (right context). Contextual selling is part of the bread and butter of what media companies do.

On the web, companies like ContextWeb and Peer39 among others have built entire enterprises around the ability to understand the context of a web page, and how that may have an effect on a users receptiveness to advertising on that page.

So now about PlaceIQ. If you start to think about the world beyond magazine pages, television spots and banner ads on your PC… the world is quickly going mobile. And with this mobility comes an interesting new twist on the concept of context.  Sure you may be deeply engaged in the world of Angry Birds catapulting themselves at pigs, Zombies munching on your row of spitting mushrooms, or the latest article about LeBron’s 30 point night… but sooner or later you you’ll look up and disengage from that virtual world and realize that you’re sitting in a train station, or on a beach or in your doctors office… and where you are is context too. Not only is “where you are” a somewhat unique type of context to advertisers, but potentially a very important and powerful one… after all reading about Lebron James’s lighting it up in the Garden last night on my mobile ESPN app may correctly categorize me for advertisers, but so does the fact that I am sitting on a beach in a swanky area of South Beach while doing so… in fact the “signal” that the latter data point sends is probably much more useful. It’s also something very unique and novel for the industry to wrap their heads around.

So that in essence is what PlaceIQ is all about. Gaining a deeper understanding of places… everyplace, down to a 100×100 meter ‘tile’… so that mobile and out of home advertisers can better understand the context of what is happening in those areas when it comes time to place or deliver an ad.

The PlaceIQ data is gathered from a variety of sources near and far, with the company looking at anything from sensors (ie the behind the scenes ‘reporting’ of location from mobile devices) to good old fashioned web content, as well as a number of proprietary and government data sets. Since no one data set provides the complete picture, they all compliment and reinforce one another to make the most complete picture possible.

To take it all a step further the data is also organized temporally… which as anyone that has walked into a bar at 10 o’clock in the morning knows, a bar at 10 in the morning is often quite a different place than the same bar at 10 in the evening… same goes for baseball parks during the time of a game, and a train station during the morning and evening rush hours. Spaces have different profiles at different times of day… which is important when you’re about to serving an ad hoping to reach a certain type of person.

There are seemingly any number of people that could take advantage of this type of data, but the players in the mobile advertising ecosystem are some of the first to show interest. Use of the mobile web and mobile applications is exploding, and increasingly the ad “calls” within that content can be tied back to a geographic location, and the ability to use this location data to sell and target ads more effectively creates a compelling opportunity.

In the web world there is a lot of focus these days on audience buying… in other words I don’t care if you are reading a webpage about cars, I am going to serve you an ad for a blender instead because I know you were on a cooking site earlier, or you fit the demographic profile of people who typically buys blenders because of the registration data you provided ten sites ago. This practice has always been an area of scrutiny, because it generally relies on cookie swapping to recognize users as they pass between websites.

As you might imagine when it comes to mobile location data, this is an area that becomes a lot more sensitive. For PlaceIQ, how the whole mobile cookie capabilities nets out is important but not critical… as the data is organized around places, not people. In the same way that you can infer something about a person by the web page they’re on, you can similarly infer something about a person from the geographic place they’re currently at, and the time of day that they’re there. Of course the whole thing becomes a lot more sophisticated if there is some sort of location history that tells me that you like to visit museums, or Chinese restaurants, or that you just came from a Yankees game. Even in bulk aggregated form, information that people that go here, also tend to go there holds a lot of value in the world of digital advertising. But when and if that information ever becomes a viable basis for ad delivery is still up in the air.

I guess the thing that interests me the most with the company is that for years and years the ‘web’ has been this virtual parallel world, generally disconnected from reality, where the rules were different… you were either on the web or off. Many created virtual identities, funny little virtual currencies and virtual images of themselves living their virtual Second Life. The mobile web, tied together with location can bring us collectively back from the virtual la-la land to real reality, simply Powered By the Internet. And in that world, having a deep digital collection of knowledge that describes what’s going on in that world, down to an area of a hundred meter tiles… well just seems like a pretty valuable thing to have.

• Consumer don’t mind giving away location as long as they get something valuable in return and they gave permission
• Texting is replacing emailing among the younger generation. Like receiving commercial email, receiving commercial texts is not seen as an intrusion as long as it was relevant and consumer gave permission
• In terms of ad delivery, location provides increased relevance… interestingly no one mentioned the consumer predisposition for acting on advertising when out and about… which I think is probably most important
• Going off and building an iPhone app is not for everyone. It’s expensive ($100k is not atypical) and overall smartphone penetration is not at scale. It makes sense for some demos more than others.  Good old SMS is cheaper, easier and already at scale.

With respect to mobile meets retail specifically one of the panelists Kathryn Koegel from Primary Impact Research made mention of how consumers were often using mobile devices while IN STORE to get additional product information and reviews and to do price comparisons on the items they were shopping for.  On a number of occasions I’ve found myself standing in the aisle at Best Buy, pulling up a browser on my phone trying to find out more about a product that I am standing in front of, so I get it.  It was interesting to see that I am not alone and that this was a potentially unique way to use mobile hyper local marketing more from a customer service perspective than pure lead generation.

It made me think that there is a great opportunity for someone to create a network of individual retail store level mobile sites (via either a geo fence around the physical store, or via a wi-fi access point within store) optimized for the in store customers experience… to aid in finding additional product info, reviews, price comparisons, learn about sales, leave feedback for the manager, etc?

Someone like Foursquare very effectively uses gaming mechanics to get folks to just identify that they’re at a place. But it seems that a mobile retail presence portal targeted to in store customers could get you location (at Best Buy) + intent (looking at reviews of big screen TVs) and potentially intercept some of the high value mainstream local/product search flow at a time when the consumer has very high purchase intent… directly shopping in store.  Seems like a potentially interesting expansion area for someone like Milo, Placecast or Geodelic.

 Just to keep this simple, let’s say that there are 15 million brick and mortar retailers in the U.S. (rough estimate) and that Google has 1.5 million advertisers currently as customers. Even if all the existing Google advertisers were brick and mortar advertisers and in the U.S. only they’d still only have 10% penetration of available advertisers. Now in reality over half of Google’s revenue is international and you can bet that a huge chunk of those advertisers are pure e-tailer with no physical store in sight.

There is only so much searching happening on the web and only a small percent of advertisers engaging with Google to try to reach those searchers, so if you’re Google what do you do to speed things along? Well you try to provide more stuff to search for, make it super easy to search for it, and try to engage the 90%+ of advertisers that don’t current engage with you.

So lets look at some of the newly announced efforts made over the past few days, particularly around location and expanding beyond the virtual world to the physical one.

The Gold Star Approach for Small Businesses: If you’re really good Google will give you a sticker!

A few months back, google created placepages for every place on Earth. If one of those places happens to be a business, Google obviously hopes that the business takes an interest in its placepage and engages with them to improve it and make it better. This week Google launched a Google “favorite places” sticker program that encourages local brick and mortar business owners to claim their local business center listing and to add information to their PlacePages.

Google has annouced that it will initially select 100k of the most sought out and researched businesses on Google (~1% of the 28 Million U.S. businesses) and send them window sticker which passerby’s can scan with a special reader on their phone in order to read and submit reviews as well as receive special coupons.

I am not so sure this one will be a big driver… is a Google favorite places sticker likely to do much for retailers? I am not so sure… I suspect that only the geekiest of the geeks will be standing on the sidewalk whipping out a cellphone to snap a picture of that QR code and stand there flipping through reviews. By the time you’re standing by the front window of an establishment, I suspect your five senses and a guage of how tired your legs are or how bad traffic is will guide your decision. I am just not sure that standing directly outside the store is the time when folks are going to do 10 minutes of web research on their decision on whether to enter or not.

Just give consumers the information they want and figure the rest out later.

The mobile local discovery market is quickly filling up with applications that allow you to do either free form searches or to navigate through a directory to discover what is around you. But searching and navigating is work, especially on many small and clunky mobile devices. So Google also announced a new feature which will appear on the Google mobile hopepage where you can do away with all that messy searching and navigating and simply ask to see everything nearby me now.

 This is a great feature, sometimes people just don’t know what they want, so why force them to make decisions via search of directories? In the real world there is plenty of serendiptious discovery happening as you walk or drive down the street… why should the experience on your mobile device be any different.

Give people more, more, more stuff to search for… like real time local store inventory information

 Knowing that there is a nearby WalMart is nice. But knowing that the nearby WalMart has your favorite flavor of Ben & Jerry’s Ice Cream in stock for $2.99 a pint is nicer. Allowing searchers to go deeper than general store level details with their search is a no brainer. You don’t buy a WalMart… you buy the stuff in WalMart. But this is not anything new, there are a lot of folks that have gone down this path, the key will be how many inventory systems Google can get into and how well it can infer what I want. Google has shown that it can kick ass in the world of cachable, contextual web pages, text and hyperlinks, but the jury is still out in terms of organizing and sorting through large volumes of non contextual, stand alone raw data sitting by itself in an inventory system somewhere.

I suspect it will be a while before product level mobile searches are commonplace, either that or life for the local WalMart marketing manager is about to get a hell of a lot more complicated!

Give people new easy ways to search: If you can see it you can search it.

 Is typing or speaking just too much work? Well Google Goggles, was just announced for Andoid phones, and uses the phones camera to do the work for you. Simply snap a photo of something and Google will try to figure out what it is and return relevant information about it. For small businesses, you don’t even need to take a picture, just hold up the phone camera to capture imagery of the outside of the business, and Google provides a link to that retailers Placepage.

This by far the most gee whiz announcement from a technological perspective, and like the favorite places sticker program seems very much designed to generate excitement among the small brick and mortar retailer community to get them engaged with their Google PlacePages and with Google in general. It certainly seems like nifty technology and if it ever comes available for the iPhone I’d certainly give it a whirl. But as with the sticker program, I wonder how much use Google Goggles will see in the real world. So far most of the visual and augmented reality I’ve seen so far is pretty limited in their practical applications, or at least don’t provide much advantage over the readily available alternatives. But without being able to play with it hands on, its hard to say how impactful it will be, but let’s just say I am a bit skeptical.

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.”

I dug around to get the latest and greatest, and it looks like in the good old fashioned web world search is about 45% of ad revenue today with premium display close to a 1/3. So Kelsey’s predictions for the mobile world certainly seem to magnify the trend we’ve seen so far on the web with search having an even bigger role and display, a decidedly smaller role. To some degree this makes a lot of sense, since the small footprint of the mobile handset doesn’t leave a lot of room for all that lovely creative ad work, the sight sound and motion and all, and search is simple, quick and to the point which is well suited to the phone.

An even more interesting part, was not just the AMOUNT of search revenue, but the TYPE of searches expected… citing data from Google that mobile searches are 2-3x more often to be local in nature than searches done via a desktop, The Kelsey Group calls for over 1/3 of mobile searches to be “local” in nature in five years, and for over half of that whopping $2.27B in search revenue to be generated from “local” search queries.

Kinda makes you wonder what kind of local stuff all those folks will be searching for on their phones and who will be the benficiaries of that cool $1B+ in local oriented search ad spending.

Oh how I wish I could have made it to SXSW this year… I think. I’ve been once before for the music part, but have never had the opportunity to experience the technology sessions. I did catch some video of the event online, specifically a bit from diggnation on the new iPhone 3.0 features. See the video above for yourself, but I for one found the level of excitement over the cut and paste feature, to well, be a little disturbing. C’mon folks it’s cut and paste! Felt more like Brad Pitt announced he was getting married to Madonna to a room full of 13 year olds!

Any entrepreneurs out there? Might I suggest starting a rehab progam targeted to those that have OD’d on all things digital… you know they could be forced to use a paper and pencil for a week, and only communicate via a landline phone and watch one of those old tv’s with only six channels and one turn knob to change channels.

What I would have liked to see at SXSW was the LBS advertising panel and to have learned a bit more about the re launch of Whrrl.

For those not familiar with Whrrl, version 1 was a very slick desktop and mobile map oriented application that was largely designed to allow groups of friends to share their experiences about places they have visited. The execution on the idea, was very well done, although the idea required a ton of people to use the application for it to really be valuable, and also was a silo
unto itself in a world where people were already sharing anything and everything with their friends via clear leaders in the social networking world like Facebook and MySpace. As it seems to have turned out, sharing just location oriented items among your social network, may not be a stand alone business at this stage in the game.

The new version of Whrrl, still has location as an important element, but location seems to have taken a back seat to the ability to pull together a number of elements to allow users to paint a more complete story to answer the question of “What are you doing?” The company’s new tagline “What’s your story?” seems designed to allow those that aren’t satisfied with just being able to inform their network of “What they’re doing”, to kick it up a notch and tell us alot more about what they’re doing, in the form of a complete story.

As I had mentioned in an earlier post about Loopt and Whrrl, the one key features I liked in Loopt, was the ease at which I could update Facebook with not only “What I am doing” but with the location element layered in as well. Well with the new version of Whrrl, they’ve now done that and one better by making it simple to push updates to both Facebook and Twitter, along with a link that brings people to the deeper multi dimensional story including location, photos, etc.

I gave it a shot this weekend, even though I am probably not the ideal candidate for Whrrl since I am a horrible storyteller and usually find other more fullfilling stuff to do than to take a bunch of pictures and give them interesting and informative captions throughout my typical day. And as far as I know there is no one else living vicariously through my life that would really care about all that detail anyway.

Like Whrrl version 1, they have got the slick presentation stuff down very well. Much of the navigation throughout the application was very logical and simple and the integration with Facebook Connect worked fine for me with absolutely no problems. I was generally able to update my location, add photos and text to Whrrl with ease (although I did notice that the new FourSquare did a better job of resolving location down to the buildings and businesses directly around me). I did find it aggrevating to put in notes for a post or, to serve as a caption for a picture (which by the way doesn’t accompany the picture very well), only to find that if I wanted to post those comments directly to Facebook that I had to retype them, which on a mobile phone can be very annoying.

I also noticed that people may not get the fact that there is more information off the url that accompanies your Facebook update. I had recently updated my status on Facebook that I was at a popular BBQ restaruant which is part of a chain in Florida… moments later a friend chimed in “which one?”, despite the fact that the full map detail was available one click away.

I think I understand the gap that Whrrl is trying to fill. You can only say so much in 115 characters, and if pictures can say 1,000 words, pictures plus maps should be able to tell an even richer story… which they do indeed. So Whrrl is the platform to plug into social networks for those that don’t want to be restricted by what they want to say.

One additional interesting feature they may want to add would be a graphical display of a timeline related to the story, to not only see “where” and hear about the “what” and “why”, but also to give a better grasp on the “when”.

Only time will tell if this new approach will take off, but it certainly seems to have a better shot than Whrrl version 1.0.

Hmm to throw a GPS chip in 250 million phones at $4 per chip would set them back $1 billion a year, looks like they could just buy the leading GPS manufacturer, SIRF, outright for less than half of that right now!