Checking out of LBS

Last December, as part of 2011 Social Business predictions, I had this to say about location based services (LBS):

Game over for LBS businesses based on game mechanics. Facebook Places adoption will rise dramatically as integration with the social graph drives greater positive feedback for users from check-ins. Users tire in their pursuit of badges and digital paraphernalia, opting for engagement with their friends instead.

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This week, Read Write Web declared 2011 The Year the Check-in Died. Sam Bennett at GSD&M is Checking Out. What’s going on? It’s not hard to see – users receive little value for their participation.

People who have digital as a large focus of their livelihood should never forget that the only reason consumers do things online are to have some impact on real life. We don’t go online for the sake of online – it all has to tie back to offline at some point. Always. Individuals who forget about the connection end up in tragic situations like this.

LBS will survive, but only as a feature of larger scale social networks. Facebook has changed their status question to “what’s on your mind?” – pairing with the question “where are you thinking about this?” and most importantly published on a network with a huge installed base and ability to monetize status, location, and intent.

Current LBS can only deliver on 1/3 of that value proposition to advertisers. A path to monetization built on a free appetizers for the mayor requires a LOT of check-ins. Related: a friend at a large consumer goods brand tried to strike a deal with a leading service, but the analytics and data exchange capabilities were a mess. These services aren’t ready to activate enterprise-level deals even when businesses are ready to hand over bags of money.

Sooner than you think, we’ll be reminiscing about LBS badges and pins like we used to talk about fat boy laces and parachute pants.

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  1. I use LBS check-ins for one of two purposes: 1) to help me reconcile business mileage and 2) to remember an interesting place a I visited. Rarely does the social aspect of LBS enter my train of thought. Back to point #1, however: I think there’s a definite use case for business purposes vis-a-vis LBS, but it probably has little to do with loyalty or unique ‘engagement’ with a brand.

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