Location-based services (LBS) – like Foursquare, Gowalla, and Yelp – made a big splash last year as a fairly successful, yet niche, mobile tactic for brands aiming to reach consumers in the real-world. They are great platforms for rewarding loyalty, real-time consumer reviews & tips, and for those who like such a thing, keeping track of your friends/family. I’ve “played” Foursquare consistently for a year now and dabbled in the others – Gowalla, Yelp, Loopt, SCVNGR. There’s interesting potential with this sort of technology, particularly when integrated with placed-based signage. But as I’ve wandered over the last year, I’m left wondering if these technologies will stick and ultimately reach the average consumer. And more than that, what it will take for them to reach that point? Here are my chronicles.

This is not a blog for the data seekers. I just don’t get into much of that here. But I read something the other day from eMarketer that was filled with lots of interesting data around location-based services apps and I think it’s only appropriate to share in this forum. Especially, since part of the “wandering” is actually “wondering” if these apps will catch on.

It’s no surprise that so few people are actually aware of LBS apps. Almost half of all of those surveyed did not know about these apps.

What I found to be somewhat surprising is that 2/3 of those who do know what they are do not use them. So, this suggests – outside of an awareness issue – that these services are perceived to provide little to no value.

What I found to be really surprising is the actual platforms that people use. My intuition would tell me Foursquare (since they’ve been successful at securing large partnerships) is the clear leader. And I know about the Facebook factor  in everything social, so they’d be up there, too (I even see my uncle – someone I would consider as the “average consumer” – using Facebook Places). But the numbers tell a different story.

Facebook and Google – both not particularly known for their LBS presence or prowess – make up over 2/3 of the platforms used by those using LBS apps. To me, this puts in perspective how hard it is for the little, niche players in any industry, especially one that is already little and niche. Could the same be said about the little guys in the digital signage industry?

But the most fascinating thing in here, to me, was the “why.” Why do people use these apps? Many of my colleagues – in and out of work – have always pointed to incentives as the main ” why.” But according to this survey, the main value driver is connections.

The tools that marketers typically use to entice check-ins, deals and discounts, did not hold much appeal for respondents to the survey. Most smartphone users believed social connections were the biggest draw to location-based apps. Among those who were familiar with them, 41% said connecting to people they knew or could meet was the main benefit, followed by finding places their friends liked (21%) and being able to keep track of their movement patterns over time (17%). Just 8% thought discounts and rewards were the most important benefit, and only 4% cared about the gaming elements of checking in.

People want to be connected. It’s just that simple. Technology – be it LBS apps or digital signage or anything in between – is only the barrier when it does NOT enable connections. I think this is an important note and growing trend that I hope my friends in the digital signage industry recognize. The key is to enable connections. Connections cannot be made through static, push, one-way messages. It’s just that simple.

Here’s the rub, though. And it’s in the privacy. Which, according to the article, is the biggest problem with consumer adoption.

Nielsen surveyed US app downloaders in April 2011 about their feelings around location-based apps and privacy and found those fears ran throughout the population. In every age group broken out, at least half of respondents said they were “concerned,” with no more than 13% saying they were “not concerned.” Analyzed by gender, the results were the same: Majorities of both men and women were concerned.

As interaction with screens around us become more and more expected and the places and things around us become more and more turned on, adoption might be slow going. Especially to the point of diving deep into a brand experience. But I think the point is made in the data and it is a human point. It’s a connections point. Regardless of what technology is new today and tomorrow, we want to be connected with each other (this is even more a truth with the younger, millennial generation).

And I suppose that should never be a surprise.