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Tourist couple with map looking away (© 2011 Photos.com, a division of Getty Images.)
Tourist couple with map looking away (© 2011 Photos.com, a division of Getty Images.)

Part Four: Location-based services

Location services popping up in unexpected places Add to ...

In this four-part series, we'll look at how small businesses can leverage the power of location-based services such as Foursquare and Places

There's a temptation, after looking at the top location tools, to believe that most of these services do pretty much the same thing. After all, Facebook Deals, FourSquare and others basically offer businesses the chance to combine interesting deals and discounts with location information - essentially, a location-based marketing strategy.

But increasingly, location-based services are popping up in new and unusual areas. Even though it's still early days, there are a number of novel sites and companies expanding the definition of location services, and increasing the likelihood that such tools can be integrated into a whole host of other business strategies.

Examples of the new wave of location-based services could be found at Net Tuesday, a Vancouver-based social media conference and speaker series. The group's session on location-based services included speakers from a startup called Compass Engine, which hopes to leverage location information for on-line games. In recent years, social games such as Farmville have exploded in popularity. Such games often reward players with in-game items for performing certain tasks. In the case of Compass Engine, those tasks include checking into real-life locations.

Also present at the Net Tuesday event was a speaker from Tingle.com, an online dating app that incorporates location information to allow users to communicate with other singles nearby. The business is another example of ways that traditional Web services are incorporating geographical information as a means of differentiating themselves from the competition.

One of the reasons location technology has quickly found its way into numerous businesses and Web sites is the ease with which companies can incorporate such data and present it. A good example is My City Lives, a local listings site that lets users upload videos related to various locations such as restaurants. The data is then overlaid onto a Google Maps outline of the city, with the videos placed in the location corresponding to where they were shot.

But the area in which location-based services are taking off the fastest is, perhaps unsurprisingly, advertising. Many of the top location-based tools already contain some sort of advertising component, such as in the form of "promoted" locations that are displayed more prominently than others. But the ability to take advantage of a potential customer's location opens the door for other business models.

For example, this week Google partnered with an advertising agency called the Aura Group to put movie listings inside banner ads. The technology picks up the user's location and puts local theatre listings in the ad, making it far more likely the user will click on the ad and subsequently buy a ticket.

Last month, AT&T became the first major American carrier to jump on the location bandwagon, after it kicked off a service called ShopAlerts, which basically informs smart phone users about deals when they're near a participating business' store.

The fact that AT&T initially started the service in four of the biggest U.S. cities highlights one of the challenges still facing location-based services: they need a critical mass of users and businesses to work. As such, companies in smaller markets will generally arrive later to the game than those in high density cities. Still, the influx of new players - from startups to major firms such as AT&T - means small and medium-sized businesses looking to leverage the marketing power of location-based services will soon not be limited to just the established firms such as Yelp and FourSquare.

Special to The Globe and Mail

The series continues with a new post every Thursday for the next month. Stories can be found on the Web Strategy section of the Your Business website.

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