European Mobile Mapping Trends

By Michael Fisher

The European community has long been known for early adoption of mapping related technologies such as OEM navigation, aftermarket PNDs and smartphone mobile navigation. This article focuses on the consumer and Mobile Network Operator (MNO - or "carrier") preferences, which are likely to shape the next generation of mapping/navigation products and services throughout Western and Eastern Europe.

Regarding preferences to mobile mapping services, both European MNOs and consumers share in a common desire - to offer and/or choose from a broad range of mobile platforms offering various forms of location-based services.

MNO's understandably still struggle with justifying the investment towards offering turn-by-turn navigation solutions which only address a small percentage of their platform offering. Even in the advent of increased GPS enabled phone availability, establishing a compelling price represents a challenge for mobile carriers and customers alike. For example, Vodafone Germany now sells the GPS BlackBerry Curve for 1 Euro, with plan extension, and the cost of activating the pre-installed navigation annual subscription service is 99 Euros. As much as most of us involved in this market may consider this a good deal, many consumers view it as expensive particularly in contrast to what they may pay for the phone. See figure 1.

Figure 1. Vodafone promotional flyer

In contrast to turn-by-turn solutions, seemingly low cost "locate" services are growing in popularity. One example is Jamba's Partner Tracker, which allows mobile customers to identify friends' locations presented on satellite imagery after so-called partners have "opted-In." The service is packaged as an extended data service with a limited number of search requests for €4.99 per week. See figure 2.

Figure 2. Jamba Partner Tracker promotional screen shot

Partner Tracker is basically a social networking service, and apparently a very popular one. I contacted Jamba and asked for subscriber numbers but they, as expected, declined to comment. Considering that they advertise the service on television here in Germany approximately every 15 minutes during the evenings, I would guess that the mobile "download" and "gaming" demographic finds the service quite interesting.

The balance of this article examines the developer community's recent engineering activities, plus the underlying business and technical issues associated with launching upcoming services throughout Europe.

There are two interesting areas of development presently in Europe focused on fostering mass market appeal for mapping services. The first is utilization of the network to provide location versus GPS, and the second is subsidizing the cost of mobile mapping services with advertising.

Revived interest in using the network to derive location is naturally a means to offer wider services on new and existing "feature" phones rather than acquire GPS technology. The European emergence of commercial technology providing mobile phone location via the network is, interestingly enough, coming from "presence" service providers. So-called presence technologies allow mobile customers to identify the location of their friends, and supply information regarding their status, such as "on or off the phone." Personally, I've questioned the validity of such services in the past until examining the value presence offers when combined with location-based mobile advertising.

Like it or not, advertisement placement will find its way to the mobile community. Why? Because advertisers are willing to spend millions and carriers are likely to reap most of the benefits. From a consumer perspective, many will not be able to resist a reduction in mobile service pricing in return for accepting advertising. Mobile marketing pilots, conducted in Europe last year, suggest that mobile customers will gladly accept mobile ads for a 15 - 20% reduction in monthly cost - where carriers' stand to recoup significantly more revenue, from sharing in the advertising revenue, as opposed to the revenue lost to discounting plans.

Advertisers are, of course, principally interested in simply reaching the massive mobile community. However, the potential benefits of understanding where customers are, whether they respond to local promotions, or if they actually make a purchase as a result of the promotion open many new opportunities. The general consensus is, advertisers will pay more per impression, or a higher Click Per Mille (CPM) or Click Per Action (CPA), when location-based advertising is offered.

There are some small map service providers posting advertisements currently; however these operations have yet to capture the attention of significant advertisers due to their relatively small customer base. It's anticipated that the breakthrough service will involve pre-installed basic mapping services on the device, where the carrier promotes it as a free map service, including point of interest (POI), traffic and weather. Upon launching such offboard applications customers will be greeted with a "sponsored by" banner most likely offering a special with a "click for more information" option. Additional advertisements will be presented when other requests are made, like a POI search for hotels resulting in local hotel promotions.

As previously mentioned, the combination of presence with location-based ads represents yet another dimension to extend the value of the advertisement. Imagine receiving a promotion for a free low fat latte at your favorite coffee shop and inviting friends in the area to join you to take advantage of the promotion. Therefore, the combination of social networking and localized advertising may add further value for advertisers.

It's interesting to note that many of the brand name mapping/navigation providers throughout Europe understand that such services will soon enter the market. However, they're reluctant to offer free services under their own brand for fear of eroding the value of their current products. Personally, I disagree with this way of thinking, as I believe that broader exposure to mobile mapping services will promote interest in more sophisticated and expensive mapping/navigation products.

Privacy issues, as you would expect, arise when offering most any location service and especially social networking related services. It would seem that offering FREE services raises skepticism instantly in some areas of Europe. This coupled with advertising and social networking appears to raise further concern. Many European government organizations have officially weighed in on the topic as a means to educate the public and declare rights associated with data protection and the power to audit organizations providing location-based services. In the case of network location-based services, this only applies to the carrier, as this technology only takes raw network data from the carrier and returns a more precise location back to the carrier.

Another major privacy matter looms on the horizon in Europe regarding intelligence that can be derived from mobile advertising; it is known as "behavioral tracking." Simply said, advertisers would benefit greatly from understanding not only what ads are most popular but where customers responded to these ads. For the most part, it's no different here than in the United States - addressing public concerns of privacy is a matter of education and documented disclaimers.

Closing Comments
The European MNO market is more granular and inherently larger than the U.S. market regarding the number of operations. Plus, mobile phone penetration is substantial. See figure 3.
Figure 3. European Mobile Phone Penetration - Wikipedia 2007

Furthermore, European MNOs are quite active in securing partnerships with location-based service providers so long as they offer services on a multitude of mobile phone platforms and can handle localization, such as language translation and annotation character issues.

Therefore, the market conditions are quite favorable for launching new U.S. based map related products and services throughout Western and Eastern Europe. Affecting this climate would be the currency exchange, which will obviously raise the cost of entry, based on the cost of securing staffing - especially in the U.K. Regarding privacy issues please note that some European countries are more sensitive to privacy issues than others.

Published Wednesday, May 7th, 2008

Written by Michael Fisher

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