Location Services Have Not Caught On, Report Says
Checking in at Monique's Chocolates in Palo Alto, Calif. — Tech companies, venture capitalists and retailers have expressed no small amount of enthusiasm for location-based Web services, which allow users to “check into” locations …
Context & Ripple Effects
The check-in category arrived with the App Store: TechCrunch surveyed location-based social networking on the iPhone back in September 2008, and by December 2009 its "Location's Social Paradox".
The Pew Internet figure syndicated alongside this report — 4% of online Americans use location-based services — is the first hard number against that enthusiasm, arriving three months after Google's opt-out Latitude alerts made location-sharing's creepiness factor a mainstream complaint.
First-order effects
- Check-in services and their retail partners are selling to a base Pew sizes at just 4% of online Americans, meaning merchant deals and loyalty programs built on check-ins reach a fraction of the customers their backers assumed.
- Venture capitalists who funded the post-iPhone generation of location startups now have a top-line adoption number to defend their thesis against.
Second-order effects
- Privacy objections documented since Google's Latitude alerts controversy move from anecdote to data point, pressuring every check-in service to make location sharing opt-in by design rather than an afterthought.
- Retailers evaluating check-in partnerships gain leverage to demand broader-reach formats — deals triggered without a manual broadcast — since the manual check-in audience is demonstrably thin.
Third-order effects
- If single-digit adoption holds, the value of location data likely migrates from what consumers volunteer at check-in to what platforms infer passively, reshaping the category from consumer social games into infrastructure sold to merchants and advertisers — though whether that transition happens is exactly what the low number puts in doubt.
The trend: Location-based services are colliding with the gap between investor enthusiasm and actual consumer willingness to broadcast where they are, forcing the category toward either passive collection or merchant-driven utility.