LBS and Mobile Marketing Q3 Report

Mobile Fact PackThe Hottest Predictions for 2012

M for Mobile is proud to bring you the updated and latest stats and facts you need to know for 2012 and beyond, for the mobile, location and navigation industry, in association with the launch of the Location Business Summit USA.

4th ANNUALLocation Business Summit USAConference & Exhibition

Designed specifi cally to help you pinpoint key LBS business models and highlight services that can generate signifi cant revenue. The 4th annual Location business Summit USA is the biggest meeting place for hands on knowledge and networking for the mobile and location industry.

October 16-17, San Jose, 2012

Mobile Fact Pack The Hottest Predictions for 2012

Source: Mobile fi nds its USP in contextual relevance – Paul Berney, CMO & Managing Director EMAE, MMA

Mobile has both caused and enabled an irrevocable change in consumer behaviour



Every interaction via mobile raises our expectations

Digital Natives/Generation Y/Millennials/Connected Consumers have higher expectations


Source: June 6 2011, ‘Competitive Strategy In The Age Of The Customer” Forrester report

The age of the customer!

1900-1960

1960-1990

1990-2010

2010-?Sources of dominance

Age of manufacturingMass manufacturing makes industrial powerhouses successful

Ford, RCA, GE, Boeing, P&G, Sony

Walmart, Toyota, UPS, CSX

Amazon.com, Google, Intuit, MBNA

Contenders include Facebook, IBM, Best Buy and Apple

Age of distributionGlobal connections and transportation systems make distribution key

Age of informationConnected PCs and supply chains mean those who control information fl ow dominate

Age of the consumerEmpowered buyers demand a new level of customer obsession

Successful companies



Contextual Relevance is the USP of mobile when dealing with the digital generation



Mobile is changing our behaviour at every stage of the customer lifecycle


Source: Strange PR

Consumers don’t need (want) marketing


Source: NielsenSource: June 6 2011, ‘Competitive Strategy In The Age Of The Customer” Forrester report

Preferred source of product & service information

Consumer ratings

Consumer reviews

Company’s website

Call centre

Email

Video clip

Live chat

Company’s Facebook

Mobile App

Online advertisement

Company’s Twitter

30% 50% 70% 90%20%10% 40% 60%

Social media sources

80% 100%0%

63%

50%

45%

30%

7%

9%

62%

47%

34%

15%

8%


Source: Jiwire

31% researched a purchase on their device before buying in-store


Source: European Technographics® Retail, customer experience and Travel online survey, Q3 2010

Shopping... Which one of the following have you ever used your mobile phone for?

To check store opening hours

To locate a nearby store to purchase a specifi c product

To compare physical store prices with online prices, when shopping in a store

To check in-store availability of a product

To read customer reviews of a product

To check on the status of an order

To look up online product information while shopping in a store

Base 13,869 European online adults who own mobile phones and 986 European frequent online buyers who own mobile phones (multiple responses accepted).

30%20%10%

Social media sources

Online Europeans

0%

22%8%

19%7%

15%4%

14%4%

13%3%

12%6%

12%4%



Mobile amplifi es the power of customer review sites



34% of US smartphone owners said they had abandoned a purchase in-store after seeing a negative review on their mobile



Mobile connects fans in multiple locations



Mobile changes the way we interact with our environment...

...and infl uences our decisions based on that location


Customer journeys are not linear...

Loyalty loop

Active evaluationInformation gathering, shopping

Postpurchase experience

Ongoing exposure

Moment of purchase

Initial consideration

set

Trigger




The mobile consumer expects: Convenience Multi-channel Real time Dialogue Engagement Control



Consumers are

mobile Your brand must follow them



Location, Location, Location – Vikas Arora, Solutions Specialist EMEA, Microsoft

70-80% of business data has a geographic content


Location, Location, Location – Vikas Arora, Solutions Specialist EMEA, Microsoft

The understanding of location enables: More relevant search results

An opportunity for location-based advertisement and new business ideas

An additional dimension to search for and discover information

Deep insights in business data

A common operational picture...

...and maps are the canvas to visualise this knowledge


Global Evolution of Location – Frederic Bruneteau, CEO, Ptolemus

The smartphone is changing the time scale of location

Gionass

Gyroscope

Compass

A-GPS

Celluar tower triangulation

(Google)

WiFi positioning

3-axis accelerometer

Compass

A-GPS


(Google)

WiFi positioning


Gyroscope

Compass

A-GPS


(Google)

WiFi positioning


A-GPS


(Google)

WiFi positioning



(Google)

WiFi positioning


iPhone 2G

iPhone 3G

iPhone 3GS

iPhone 4

iPhone 4S

June 2007 October 2011

A new positioning generation every 10 months



2013 201520122011 2014 20162010

Mill

ions

1,200m

1,000m

800m

600m

400m

200m

0m

Global smartphone sales (millions)



The smartphone is becoming our personal server to the geo-located world

The smartphone is becoming our personal server



Location-enabled phones: Smartphones now exceed half of total phone sales in

Europe and North America

Location-enabled phone and smartphone are becoming synonyms

Number of location-enabled phones sold will again double within fi ve years thanks to a take-off in China and India

Single purpose devices such as pocket cameras and PNDs need to fi nd a new positioning


Source: PTOLEMUS Insurance Telematics StudySource: Global Evolution of Location – Frederic Bruneteau, CEO, Ptolemus

The smartphone can threaten single-purpose devices such as Octo Telematics’ Clear Box for Pay As You Drive insurance



LBA is the next wave

Although discussed for many years only now making an appearance

Hype turns to reality and €

The next big step after SMS

Today, location location use is still fairly primitive and limited revenues

Location has to be integrated intelligently with other targeting criteria (age, interests, gender, etc...)

Proximity marketing when user near POS works well, e.g. O2 UK Priority Moments off er service

...and will overcome the main challenges:

User privacy must be respected

Opt-in and permissions must be clear

Contact strategy (frequency of messages) needs to be well-judged, and varies per segments

Third-party interfaces to advertising agencies need building

Ultimately real-time auctioning platforms for mobile inventory will exist


The four chimneys are pushing all players to integrate vertically


Nokia SiemensNetwork infrastructure

Nokia/NavteqWPS

Windows PhoneAndroidIOS

BingGoogle Search

supl.nokia.comA-GPS supl.google.com

Symbian + Maemo + MoblinOS

Internet ExplorerChrome / WebkitSafari

Nokia/NavteqMap Bing MapsGoogle MapsPlaceBase

Nokia/NavteqAdvertising platform

Microsoft AdvertisingAdMobiAd (Quattro

Wireless)

Google Maps

NokiaDevice

Search engine

Apple

NovarraBrowser

MotorolaiPhone

Nokia/NavteqLocal content Microsoft Advertising

Panoramio/ Zagat

DVI StoreApp store Microsoft MarketPlace

Android MarketplaceApp Store


Major players are all attempting to integrate the complete end-to-end location solution



But ecosystems are also a highly effi cient way of building a complete solution




The OS sponsor focuses more on creating the right enablers and SDK

No need to develop all new services, third party developers do it

Number of services/applications increases dramatically

Competition becomes more diffi cult because it is more complex to fi ght an ecosystem



Glonass

Reached full operational capacity (24 satellites) in December 2011

Faster TTFF

Dual-use most benefi cial in urban canyons

Somewhat superior service in Northern latitudes

Diff erent standards (FDMA vs. CDMA) has slowed adoption but now most chipset vendors support it

Other GNSS

Galileo will have launched fi rst four satellites by year end

Beidou achieves operational positioning capacity (only regional coverage)

GPS satellite positioning monopoly is ending, as new constellations emerge


Market for indoor positioning

We spend 80% of our time indoors, IPS is the future:

• Shopping malls, airports and offi ces – to fi nd specifi c goods or people

• Airports and hospitals – security applications including theft, rescue and exit

• Trains and subways, for location-based content towards travellers

Indoor is where the business takes place: shopping, contracts signed, etc.

Indoor technologies & maps are emerging

Criteria for success: cheap, scalable and accurate

Dominant solution will be a combination of technologies, notably WiFi, Cell-ID, MEMS (gyroscopes, accelerometers)

Solution will be software-based (Pole Star, Insiteo) or chipset-based (CSR)

Maps are also coming from Micello, Navteq, Microsoft and Google

The mass market for indoor positioning is maturing, setting off a transformation of our lives in the near future



Cell-ID has the potential to strike backThe performance of positioning technologies compared


Comparison factors

Perf

orm

ance

High

Low

100

75

50

25

0

Cell-ID GNSS WiFi IP address

Reliability EnergyPresenceLow cost

Ecosystem LatencyCoverage

Opt-inAutomaticAccuracy


All these companies will want to know your car’s locationConnected car services and players


Resource management

Car maintenance

Energy management

Multimodel navigation

LBA/LBM

PAYD/PHYD

Social networking

Car sharing

Finance

Traffi c & other services

Stolen vehicle

recovery

bCall

eCall

Voice & messaging

Road user charging

Resource management

Power suppliers

Mobile operators

Maintenance fi rms

Oil companiesBanks &

leasing fi rms

Navigation & search vendors

Insurers

Car OEMs

Assistance providers

Toiling operators

Handset vendors


Number of connected vehicles in use in Europe (in millions)

Numerous factors are helping

The take-off of low cost embedded navigation systems such as Renault’s Varinat TomTom

The eCall project in the EU, which is scheduled to be mandated in all new type-approved cars and LCVs by end 2015

The ERA Glonass project in Russia, which will apply the same constraint to all motor vehicles in the Russian market by end 2013

The development of national road charging schemes

The take-off of PAYD insurance aftermarket systems

At last, geo-connectivity is reaching vehicles in large volumes

50

40

30

20

10

02010 20122011 2013 2014


Other (SVR, speed camera warning systems) Aftermarket systems/Fleet management Aftermarket systems/RJC Aftermarket systems/PAYD insurance Aftermarket systems/Connected PNDs eCalls Embedded navigation systems


Google and Nokia have destroyed the business case for navigation-only services

• Google present in two biggest mobile OS platforms, IOS and Android• Google represents vast majority of local/map searches• PND sales are falling• Car last platform where paid navigation is dominant model

Navigation fl ies with local search (pull)

• Hence TomTom’s acquisition of iLocal• Challenging to design a large scale freemium model where both free premium

levels work

Next step will be LBA (push)

• Knowing where your are where you are going to suggest where to purchase• Google best placed... Unless Apple develops own navigation

Navigation and local search are becoming one and the same business



The 2010 Intelligent Transport Systems (ITS) Directive creates the framework for a European-wide implementation of eCall

The European Commission aims at mandating eCall for all new type-approved vehicles by end 2015

Certan OEMs have already deployed eCall on most models, notably PSA, Volvo and BMW

Daimler just announced that it will deploy it on almost all models from June

We expect the eCall box to be used as the gateway to connected car services (connected navigation, insurance, stolen vehicle recovery, remote diagnostics, etc.)

We expect the eCall OBU to be used as a multi-service box for the connected car



PAYD trials & launches globally PAYD has reached its tipping point

Since 1997 (Progressive’ fi rst trial), 94 trials worldwide and 54 commercial launches

Success stories in multiple countries, notably Italy (Unipol), Spain (Mapfre), France (Groupama), the UK (Insure the box), Austria (Uniqa) and the US (Progressive)

Overall, we estimate PAYD-equiped vehicles at over two million worldwide

We expect the number of insurance telematics vehicles to be multiplied by 50 by 2020

USA

UK

Italy

France

South Africa

Germany

Ireland

Belgium

Spain

Other

0 105 15 20


25 30


Power consumption for a large number of objects from consumables to home keys

Size and weight for low value consumables such as food and drinks

Cost e.g. for low-end consumer electronics such as watches

Industries that are not used to integrate electronic components into their products e.g. handbags or car keys; or that do not have the location culture (digital cameras, surveillance cameras)

Ecosystem road blocks e.g. for credit cards or containers

What are the fi ve current major challenges to geolocate the 16 billion objects in Europe?



The location game is not over, it is starting

The speed cycles will be given by the smartphone

There is value in location: by combining it with other elements into an end-to-end experience

In our view, the location industry needs to revisit the obvious and defi ne smart ecosystem strategies rather than just throwing up products to its customers!

Our upcoming Global Location Study will provide the technology and market insights



Location-as-a-Service (LaaS): a Platform for Location Services – Steve Gray, CTO, CSR

GPS Attenuation

Level

40-45 dB

30-31 dB

25 dB

12-14 dB

Small commercial

building

Indoor Arena/

Mall

2 level parking

structure

Brick-faced

masonry

Typical North

America residence

Dense urban environment

Wooden building

Typical Indoor environments attenuate GPS beyond detection for commercially available receivers

Advertised aided commercial C(A) acquisition threshold (A-GPS cell phones)

Advertised unaided commercial C(A) acquisition threshold (A-GPS cell phones)

Cannot detect indoors



24 satellites orbiting at altitude of 12,000 miles

Low cost GPS engine enables location in Smartphones

2D position requires three satellites

Positioning using GPS – How it works



Existing WiFi and cellular signals are surveyed and logged in a database

‘Finger prints’ of RF signals are recorded in a database

Position is determined by interpolating fi nger print data

Corporate WiFi is deployed for broadband and indoor location

Angle-of-arrival, time-of-arrival or received signal strength is used to calculate position

Position server records location dynamically


Enterprise/gov segmentTargeted at government and large enterprises where there is a need for content access control, campus maps/WiFi tiles restriction (for employees only), military-grade geofencing, etc.

Market trends and attributes: BYOD, handheld location policies, MDM, Geofenced security (military grade). Location context Apps

Deferentiator:• Indoor positioning and locations• Agile middleware applications• Boeing Irridium radio

Asset tracking segmentThis segment is targeted at fi xed (Vending sys, offi ce/lab/medical equipment, etc) and mobile (goods in transit, fl eet, people, etc.) asset tracking in large enterprises and healthcare institutions.

Market trends and attributes: low cost (<$25) mobile, MRM/M2M apps with outdoor-indoor tracking

Deferentiator:• Location accuracy• Indoor positioning capability• Server Location Aiding (A-GNSS,

E-ECID OTDOA

Consumer LBS segmentThis segment is targeted at consumers at Big-Box stores and Malls. The technology will be used to guide shoppers to the right departments and Product areas. Provide retail-specifi c coupons and specials, etc. @20B advertising business.

Market trends / attributes. Focucus on indoor commercial retail with three-metour

Deferentiator:• Indoor navigation• SLA

Three LBS markets – Enterprise, Asset Tracking and Consumer



Location-as-a-Service (LaaS): a Platform for Location Services – Steve Gray, CTO, CSR Location-as-a-Service (LaaS): a Platform for Location Services – Steve Gray, CTO, CSR

Total LaaS market (volume of units)

1,000,000,000

18% CAGR

900,000,000

800,000,000

700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

0201620152014 20172013

Consumer LBS Total Market 209,024,554 246,313,077 283,601,600 352,684,041 438,594,256

Mobile Enterprise Total Market 129,535,398 130,800,752 132,078,759 133,369,547 134,673,243

Asset Tracking M2M Total Market 135,000,000 168,750,000 210,937,500 282,000,000 352,500,000


Location innovations are making the world a smaller place

Indoor location will dramatically change the marketplace

Cloud and web services enable new business models

New multibillion € businesses will evolve leveraging new location technologies



Location Based Advertising: What does it mean to brands and do the agencies care? – Asif Khan, Founder, LBMA

A location-based service (LBS) is an information and entertainment service, accessible with mobile devices through the mobile network and utilizing the ability to make use of the geographical position of the mobile device.

Wikipedia

01 LBS



Location-based marketing (LBM) bridges the gap between all forms of marketing media. Inclusive of social media, internet, out-of-home and real life interaction. It is about the integration of media to infl uence people in specifi c places.

The LBMA

02 LBM


Source: TNS/Kanter Group

Smartphone ownership

50

40

30

20

10

0Global Emerging

AsiaEurope MENANorth

AmericaLatin

AmericaDeveloped

AsiaSub-

Saharan Africa

30%

46%

31%

42%

21%

32%

46%

21%


Why are people using location-based services?

50

40

30

20

10

0Navigation

46%

Finding friends nearby

22%

Checking public transport

19%

Finding restaurants

25%

For a deal or specifi c off er

13%



How much interest is there in using location-based services?

People not currently

using LBS, but interested

People not currently using LBS and not interested


62%

38%



Preference for mobile off ers delivery% of respondents, January 2012

60

50

40

30

20

10

0Voicemail

8% 4% 9%

16%

Mobile App

11%10%

26%

12%

Text

32%

38%

16%

60%

Other

50%49%

26%

18%

Mobile web (email, etc.)

21%

13%

60%

26%

Opt not to receive them on

mobile

4%2%

12%

1%

US UK Germany France



Interact and engage an audience

Tap into user-generated content

Excite and delight their audiences

Drive permission-based relationships

Acquire key data including demographics, interests and location-based data

Drive to web for online engagement

Drive to store for coupons and off ers

Drive to experience at a location

What are brands trying to achieve?CO

NN

ECT

COLL

ECT

CON

VERT $


ABI Research Mobile Augmented Reality, Thomas Alt, CEO, Metaio

Augmented reality in LBS% of respondents, January 2012

3500

3000

2500

2000

1500

1000

500

02010

US$

Mill

ions

20132011 20162012 20152014

Mobile, in-App advertising Mobile, in-App purchase Mobile, paid applications Handheld AR games


Source: Augmented reality in LBS – Thomas Alt, CEO, Metaio

Smartphone adoption will lead to massive growth of the Mobile AR market

Consumer adoption of Augmented Reality will be based on individual but solid use cases

Revenues for Mobile AR will be generated from

• In-App advertisement • AR games • In-App purchases • Paid applications

Revenues will grow from $21 million in 2010 to $3 billion in 2016

Source: XXX


By 2014, AR will be on every Smartphone

LBS and Mobile Marketing Q3 Report

Documents

usp of mobile

mobile nds

mobile app

mobile amplies

mobile consu

mobile changes theway

director emae

online product information