2011-09-13

Mobile Advertising or Big Brother?

Google & Apple have recently come under fire for “tracking” their users without authorization. These accusations have landed both companies before the US Senate to explain their motives. But before we start wagging fingers at “Big Brother,” let’s take a look at the facts.

Both Google and Apple admitted to using cell phone towers to track user locations – even when user GPS settings are switched off. They explain the data gathered improves location-based features, map accuracy, makes local searches more relevant, and traffic data more precise.

And while those explanations are all valid – it’s not the whole story.

Both companies see your smart phone along with your GPS coordinates as a perfect combination to launch an targeted location-based ad platform. This fusion of technology would bring mobile marketing to unprecedented levels, possibly shaping the future of mobile advertising. And as it turns out, both companies have been working towards this platform for quite some time. Google recently secured a patent applied for back in 2003 allowing GPS location to be used to determine ad relevancy. And Apple will soon offer a similar service in their iAds mobile ad system, which will offer location-based targeting to advertisers. With the lions’ share of the geo-targeted mobile advertising market, both companies stand to do extremely well as long as they don’t scare the public or cross any blurry legal lines – Which is exactly what they may have done.

Both companies experienced very negative consumer sentiment after users learned they were being tracked. And now both companies must explain themselves to a Senate which may decide to take a fresh look at outdated geo-location privacy laws.

A need for transparency.

Groupon, on the other hand, has taken a more transparent direction with their new mobile service. "GrouponNow", Groupon’s new opt-in mobile app, allows users to receive time-sensitive discounts in proximity to their location at the time of check-in. The key difference is the customer approach. While Google and Apple permanently track you, Groupon locates you when you wish to be located.

For marketing and advertising professionals, much is at stake in this geo-location arms race. In 2010, mobile advertising spending grew to $877 million dollars. According to the IDC, that number is predicted to skyrocket by 120 percent to 1.9 Billion in just a year. There’s no denying that as more consumers adopt mobile technology, more brands will be vying for their attention in smarter and more relevant ways.

In the coming years, geo-specific advertising will fuel Mobile’s growing marketing power. But will privacy and safety gaffs committed by the most trusted names in the business slow down Mobile’s growth? Or will their mistakes give room for smaller competitors like Groupon to take center stage and win customer trust and loyalty?

Think about it. There's a lot at stake for all of us.


Why Google, Apple Are Tracking Your Location via The Huffington Post

Groupon's do or die moment via
CNN Money

The difference between Apple and Google at the Senate Hearings via
TUAW (The Unofficial Apple Weblog)