Location Based Advertising: Super Convenient or Big Brother in Action?

Ye Good Olde Days of Advertising… thirsty? Now you are!

Imagine yourself walking by a Starbucks. Suddenly, your phone beeps urgently, alerting you to the fact that you are in the vicinity of Starbucks!  Would you like to take a break for some coffee?

Or you are driving by Macy’s, and suddenly your phone beeps again. Did  you know that the pair of boots you browsed last week online is 10% off? Like, right now this very second, and won’t be anymore if you drive past this store! Does this sound a little bit like the visual advertisements targeting people in Minority Report? If it does, that’s because it is… albeit in a less invasive manner than retina scans. Welcome to the world of Location Based Advertising (LBA).

The process described above is what is called the “push” approach to LBA, which allows companies to target mobile users unless or until they opt out. There is another approach to this, in which mobile users can voluntarily enter their information into a search application, such as looking for a deli while visiting a city, and the app will return results with a map and even coupons for a free drink or appetizer. Yay!

LBA represents a way to market ads far more efficiently than traditional advertising, where a company’s advertising dollars go to pay big name celebrities to talk about why such and such a product is awshum. The only problem is that you, the company, have to believe and have faith that your celebrity endorsements are paying off, as you have no easy way to determine if your sales have gone up based on the millions you have just spent. Companies can now spend much less on ads that are more personalized and more effective, while, more importantly, providing tracking data to show how much these advertisements are paying off.

LBA is not going away. With advertising slowly catching up to the mobile medium, LBA is going to be big, being expected to net $15 billion by 2018. (Source) The only hangup with LBA services can be summed up in one word: Snowden.

For years the public at large did not pay much attention to how the heck their information somehow miraculously got absconded from their computers and phones and appeared into the digital atmosphere. Since the revelations of Edward Snowden, however, there is a growing awareness that this information is not lost to the ether. We now know that every single thing we do online is captured by government computers and stored in government databases, potentially forever, in the name of fighting terrorism. LBA represents the latest way for the government to know almost everything about you.

But before we go too far, it is useful to note that LBA is not a conspiracy theory. It is a conspiracy fact, that it’s a conspiracy to make money which doesn’t directly involve Big Brother. The fact is, Google’s meteoric rise is due in part to their analytics technology which can form an accurate depiction of who you are based on the websites you visit. This allows Google to target ads to you based on who their algorithms think you are. Since the advent of smartphones, you can browse from a device which gives your location to someone at all times. This is also not a conspiracy theory, it is conspiracy fact, the phone companies conspiring to use technology to make money. The simple reality is that for the phone company to support your device, provide you with internet, deliver your texts and connect your calls, it has to know where your device is. Even if you choose not to share your device location with this or that provider, app, or website, your service provider absolutely knows your device’s whereabouts (and by extension, your own) at all times. While the question of how involved the government was in producing these devices may be in the realm of conspiracy theory, that the technology works in this fashion is a matter of fact. Since Snowden, we know that the government collects all of this data from the telecoms, Google and Yahoo and any other of numerous web applications and services.

Irrespective of the motivations of developers and engineers, or how active the government may or may not be in tracking your movements, any and all information obtained by your device to target ads to you will be collected. LBA could be an awesome convenience, particularly when goodies like a coupon for this or that are involved (can you imagine the effect it would have during an event like Black Friday?), but it also allows Big Brother to take in all the information. Given the market potential, Location Based Advertising is here to stay, and, unfortunately, so is Big Brother. You win some, you lose some. It’s up to you to decide how much you lose.

What Is Up With PATH?

The purpose of social media is to make connections with and share in the lives of others, or, more simply, to be social. It is something of a given, then, that engaging on social media platforms will always include some element of revealing one’s personal life — or business life — to anyone in the world who chooses to look. Most of the big social media platforms make at least some effort at allowing users to restrict who sees their information, but it is generally true that the level of privacy involved is superficial, especially if the user isn’t completely on top of their posting activities. Countless stories of people losing jobs, losing relationships, or humiliating themselves via careless Facebooking or Tweeting can attest to that! Then again, if you really wanted to keep things completely private, you probably wouldn’t be putting them on social media at all in the first place. But the lack of privacy is a continual pain for users and social media platforms alike; for users because it can make for some uncomfortable accidental moments, and for platforms because they have to figure out some way to make money in order to continue offering their services without making their customers commit virtual identity suicide. One service that tried a different way of implementing privacy is Path.

Launched in 2010 by an ex-Facebook employee named Dave Morin, the mobile-only Path turned the social media model on its head. Rather than seeking to amass as many “friends” or contacts as possible, Path puts a deliberate cap of 150 — it was initially just 50 — on the number of connections you can have. The basic idea is that you can only connect with people you invite and authorize to communicate with you through the service. The intent is that Path is a social media platform for you to connect with only your family and close friends. While most people certainly know more than 150 people, it’s not likely their inner circle is that big, and Path is targeting only that inner circle.

Another differentiator is that Morin swears no ad will ever be found in Path. In one recent interview, Morin exclaimed:

“Yes! Feel free to say it definitively,” he crows in his conference room in San Francisco. “We don’t believe you can provide the kinds of privacy we want by doing it any other way.”

Privacy seems to be a staple bragging point for any social media platform, and though Path has had its own snafus with privacy failures, they’re generally nothing that rises quite to the level of Facebook’s massive repeated gaffes. To that end, Path continues to redesign their privacy policies and implementation, borrowing from the circles concept in Google+ and Instagram’s terms and conditions changes in their commitment to keep privacy paramount while continuing to grow.

Speaking of growth…how is this new concept working for Path?

In its first two years, Path managed to acquire only 5 million users, and things looked bleak for the social startup. Growth had stalled, investors backed away, and Path was written off as a niche player that never really caught on. But, something happened in early 2013 that enabled Path to pick up steam once again, and by late summer it had over 20 million users. Investment potential is once again on the table, and rumors of a $300 million valuation have been floating around.

So what was the change that pushed Path into a new growth phase? Ironically, it was Twitter.

In December, Path started allowing users to spread their profiles using Twitter’s direct-message system, and in May they also added Gmail connections. These newly opened avenues into major communication channels opened the floodgates and made it far easier for people to share the social platform with their family and friends, and the service — whose interface and functionality is, by all accounts, a thing of streamlined beauty — suddenly finds itself “sticking” very well with the new audience. In fact, some recent statistics show that the average Path user spends 20 minutes per day in the app, compared to 17 minutes on Facebook, and Path is accessed by each user an average of 19 times per day.

The way forward is somewhat unclear for Path. The growth is undeniable, but it’s still small enough that it’s having a hard time effectively monetizing its services. By rejecting the ad approach, it is left with options like a paid subscription model or in-app purchases of premium add-ons like stickers or photo filters. Neither is ideal when compared to other free platforms that offer similar services, though subscriptions have been implemented successfully with a handful of other apps like Evernote. These challenges are perhaps most clearly demonstrated by the recent announcement that Path was laying off 20% of its workforce in an attempt to streamline its service for the next version, Path 4.0.

Regardless, it seems like Path has been through valleys before, and while there is some cause for concern it seems that Path’s current challenges may not necessarily be another one. Only time will tell. Until then, if you’re looking for a well-designed method of sharing your happenings with family and close friends while retaining the most privacy possible (or if you’re just looking for a not-Facebook option), you may want to give Path a try.

Then come back and leave us a comment about what you think!