The future of geofencing is bright, but it’s not in advertising. So says Tasso Roumeliotis, founder and CEO of WaveMarket, the company behind the family locator services at AT&T and Sprint.
“Geofence-based marketing has to have massive utility to the user or be part of their passion,” he says. “It will not mean getting a message for something you don’t want to see. I see it as a service rather than an ad.”
WaveMarket’s geofencing technology is being used to locate family members, navigate roads, search for local destinations and track shipments. Advertising components have been built into some of the applications, but Roumeliotis emphasizes that the marketing is opt-in only.
WaveMarket has found that the most robust demand for geofencing services lies outside mobile marketing and advertising. For instance, Nokia has deployed WaveMarket’s technology in its location servers in several different countries. WaveMarket’s technology also powers a real-time shipment tracking service through uShip.com and was behind the successful 2005 launch of a location-based dating alert service in South Korea.
The company hasn’t raised any venture capital money since 2007, when it completed a $13 million funding round, and claims to be profitable. “We’ve been able to monetize location,” Roumeliotis says.
WaveMarket’s apparent success comes in part from overcoming obstacles presented by the use of location data in applications. One of the main problems is geofencing applications need real-time location information and run GPS continually, draining a device’s battery.
Instead of continually running GPS, WaveMarket uses data from cell towers and other wireless networks to see if a user’s location has changed before activating GPS to get specific coordinates. Roumeliotis says the client can run continually without killing a device’s battery life.
Another problem, particularly for companies looking to use geofences for marketing applications, is that they get charged every time they “dip” into an operator’s network to check a user’s location data.
Rather than use the conventional approach where the system asks where a user is every 15 minutes, WaveMarket’s technology uses real-time distance estimation that incorporates the velocity at which a user is moving. This allows the company to minimize the number of times it has to access an operator’s wireless network.
“We may not ping the user for an hour,” Roumeliotis says. “We’re intelligent in our use of location data.”
Looking ahead, Roumeliotis admits that only a small subset of U.S. consumers have location-enabled smartphones but says the U.S. market will continue to hold strong for the company. “The momentum here is an order of magnitude greater than anywhere else in the world,” he says. “It’s driven by the fact that the U.S. is a smartphone-friendly pricing market. Location is exploding here, but it’s not nearly as fast anywhere else.”