Halfway impressions: Location-Based Apps

SXSW Interactive is at the halfway point, and what’s stood out the most has been  location-based mobile applications.

These are social networking applications you download onto your smartphone. What makes them unique is that they utilize GPS to integrate your location into the overall user experience. The current examples of these include Foursquare, Gowalla, BrightKite, and AOL’s Lifestream (which launched as a stand-alone app less than a week ago). While each has a slightly different take, the general goal of these applications is to get the user out into the world to meet new people, go to new places and explore your city.

At this year’s SXSW, there are 8 different panels dedicated to these kinds of applications. Needless to say, interest is high–for everyone from developers, users and, of course, brands. In fact, brands’ interest in location-based apps is really high, for a couple  reasons. First, a lot of brands still feel they missed out on Facebook and Twitter, and only within the last year started trying to use them. Location-based apps are the next big thing, and brands don’t want to miss out on opportunities to expand beyond text-based ads (which currently make up the majority of mobile advertising). Secondly, the amount of data these applications collect (where someone goes, at what time, how frequently, etc) is extremely valuable to brands.

Even though this is the newest form of social networking, the same dilemmas are coming up when figuring out the best way to integrate brands. The people that use these applications don’t want to be overwhelmed with ads, or with inauthentic messaging. It was the same with blogging, with MySpace and Facebook, and with Twitter.

Also, there still hasn’t been an explosion of people using these applications. Tristin Walker, in charge of business development at Foursquare and a SXSW panelist, pegged their users at about 200,000, which, compared to the 250,000,000+ people who’ve made Facebook pages, is really small.

Our sense is that everyone involved (or wanting to be involved) in location-based apps is still trying to figure things out. No one wants banner ads stuck into the interface. A better option looks to have brands partner with an application (like Foursquare did with Pepsi) for a limited-time event. It showed a lot of promise, and more than likely a way for brands and location-based apps to move forward.