Originally written for and also published at my employer, allen & gerritsen’s site.

Thanks to Twitter and Facebook, the crowd has a really good idea about what you do during a given day. iPhone and Android’s onboard GPS has given way to location based social networks like BrightKite, Foursquare and Gowalla, which allow you to tell your friends where you are and how often you go there. Location based applications are the next frontier, and in fact are predicted to be next year’s big thing, offering unlimited possibility for communication by geography and, of course, advertising.

My last two sessions at SXSW 2009 featured players in location based social networking. I remember being fascinated by how they approached it primarily because Gregory Ng and I concepted our own in 2007 (prior owning an iPhone and iPhone’s “reliable” GPS).

Applications

Each of the location based apps have the ability to figure out where a person is located. The user “checks in” to locations, signifying their arrival. In addition, the user is able to send messages to let people know what they are doing.

BrightKite allows you to post a status update and a picture.

Foursquare gives you points for creating and “checking in” to a location. It also has has a leaderboard to see how you rank against your friends and your city.

Gowalla’s check-ins are similar in that you can post a note, but the app also has quirky little items that you find and leave for others. For instance, I currently have an espresso, a silk robe and a tour bus in my inventory. I am never going to drop that tour bus. That is awesome. You can either exchange items for items left by others, or drop an item to become a “Founder” of a spot. I cannot say that I fully understand the purpose, although Gowalla says that they use the items as proxies for how important a particular place is.

Each application relies on the users to create locations at spots and rewards them for doing so.

Integrations

Each of the services works with Twitter and Facebook, allowing you to connect with friends from those networks and to post notifications. Some might call this oversharing (particularly if you are friends with people on Twitter, Facebook and the Location based network).

Foursquare has recently also announced an API that is will make it even more appealing to the community.

The secret to extension of social applications is the ability to integrate it into a grander scheme. With integration with Twitter and Facebook already functional, the API combined with its game-like addictiveness will give it an advantage over all other LBSNs. BrightKite also has an API, but adoption has been much slower because people simply do not have a lot of incentive to use the platform even though it is probably the best in terms of geo-location. BrightKite needs to evolve and add incentives for use in order to stand up against its competitors and survive.

Advertising Features

Foursquare appears to be the leader in advertising and monetization. I’ve started to see some “nearby special” bannerettes pop up when I am about to check in to a place. Foursquare allows locations to give special deals to mayors. A mayor is the person who has checked into a place the most. This creates a little bit of competition between loyal customers. There’s a great opportunity to generate social buzz and loyalty by being an early adopter.

Who Wins?

The winner is the one who makes money. There are a couple of ways for an organization to do so. One is to be acquired by another organization who is interested in your compelling technology. The other way is to actually have a business model that makes money. Obviously it is desirable to have both going for you. The winner will also have a very compelling API which will allow them to scale and proliferate rapidly. FourSquare’s looks to be based largely on Twitter’s which has been wildly successful. Foursquare has already begun selling ads that are based on where a person is physically. I have noticed ads when I go to check into a place. They say something like Deal Nearby and offer you a click path to that location with an easy back to your original location. Brightkite has some banner ads that display after you check in to a location. I have not noticed similar features on Gowalla yet.

Behavioral Data and Analytics

The real win here is that location data can be linked to conversations on both the application’s platform and on associated Twitter (and soon perhaps Facebook) streams. You can get a clear picture of how a person behaves by where they go, how often they go there, where their friends go, how often they meet their friends and what they talk about when they are there – or after they go there. An analytics offering segmented by demographics and interests would be very valuable to marketers. They would also pay to see analysis of popular places so that they know where to place their ads.

We know where they go and we know what they’re thinking.

Now we just need to get them to buy something.

Given the amount of information we have, I am sure we can find something appropriate to sell.