The Future of Ambient Social Location Apps

Ambient location apps were a hot commodity at this year’s SXSW festival in Austin, but they’ve failed to really capture the public’s attention the way past stars of that show like Foursquare managed to. But what does the future have in store for this category of mobile locations apps? Its business prospects are too good for marketers to pass up, for instance, even if that level of sharing is a bitter pill for consumers to swallow.

Recently Dan Rowinski of ReadWriteWeb wrote a post about how he believes the hype accorded ambient location apps at SXSW was undeserved; apps like Highlight, Glancee, Banjo and Sonar were bound to bomb with consumers because of limited usability beyond a core community of heavy tech users and early who are adopters closely congregated geographically. After all, if a user fires up Highlight somewhere in a dull suburban neighborhood far from tech hubs like San Francisco and Austin, they’re likely to be greeted with pretty much nothing.

On the other hand, the impetus to make these kinds of apps work for users is strong, especially among brands and marketers hoping to find another way to connect with consumers in a way that emphasizes timeliness and relevance. Always-on ambient location apps are the perfect situational marketing tool; if an advertiser knows where you are, when you’re actually there, they can serve up contextually relevant ads, deals and offers in a way that’s ideally suited not just to your tastes, but to your geographic proximity to places where their efforts would pay off more frequently in a sales conversion situation.

In an earlier interview, Sonar VP Katie Smith-Adair told BetaKit that her team is seeing interest from brands, and she recognizes the opportunity in offering ways for users to pay to push themselves to the fore in terms of local ambient discovery.

“We’ve had tons of interest from brands that see the value in being present at the point and place where their fans and customers are connecting with one another,” she told us. “That could involved content delivery, special offers, or simply generating brand affinity and awareness.”

That’s the dream, or at least seems to be something everyone in this space is considering, but getting consumers to go along with it is a different story. According to Circle co-founder and CEO Evan Reas, the opportunities for ambient location-based apps have only begun to be explored, however, so there may yet be a way to bridge the desire of marketers and the concerns and needs of consumers.

“The way forward is a customer-centric view of every aspect of the product,” he told BetaKit in an interview. “We want to make sure that everything a user experiences adds value to them. A lot of local apps are filled with irrelevant ads and annoying push notifications and I don’t think that is sustainable.”

Reas explained that relevance is key, as is limiting and being very selective about what kind of marketing you do through apps like Circle and others in the space. “I don’t want a push about every deal in Palo Alto, but if I am a coffee connoisseur then it might add value to tell me that there’s an awesome coffee shop down the street,” he said. “The key is figuring out what your customers really care about and that’s what our focus is.”

Circle also has a number of privacy and security options users can choose from, giving them more granular control over what is and isn’t shared, and when, than with something like Highlight. Reas said he believes that’s the key to getting buy-in from users long-term.

“The information that a person wants to share with people that around them (who they might not even know yet) is very different than the information you share on Facebook or other social services,” he said. “I think other apps tried to just take Facebook and put it online without realizing that the psychology behind a local social network is extremely different and the product has to understand that and be created with those things in mind.”

Privacy and security might be a concern with users, but historically those kind of fears have only proved temporary barriers tot he success of new tech. Foursquare’s Dennis Crowley said early on that privacy fears around his network were overblown, and that’s largely been proven by subsequent experience. And Facebook has constantly battled privacy practice accusations, but that didn’t stop it from going public today with an unprecedented starting valuation.

Big names are betting on ambient apps to succeed, too. Circle’s list of investors reads like a who’s who of Silicon Valley investing, and includes Andreessen Horowitz, Intuit founder Scott Cook, Zynga CEO Mark Pincus, Ashton Kutcher, PayPal co-founder David Sacks, Square COO Keith Rabois, Ron Conway and Josh Hanna. Privacy worries haven’t scared off institutional investment.

There are other, more practical challenges facing ambient social networking apps, like achieving big enough user numbers that people everywhere see something when they use them, for instance, and also addressing technical issues like battery drain resulting from always-on GPS. If, however, the desire is there on the part of device manufacturers and engineers to lower the energy costs of constantly providing detailed location information (and it should be, considering the revenue opportunities on the table for doing so), both businesses and consumers can expect ambient location to gain traction slowly but surely, even if it wasn’t the breakout hit that some were predicting.

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