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Location-Based Services: Definition and Examples

Business News Daily Editor
Business News Daily Editor

Location-based services use real-time geodata from a smartphone to provide information, entertainment or security.

Location-based services use real-time geodata from a smartphone to provide information, entertainment or security. Some services allow consumers to "check in" at restaurants, coffee shops, stores, concerts, and other places or events. Often, businesses offer a reward – prizes, coupons or discounts – to people who check in. Google Maps, Foursquare, GetGlue, Yelp and Facebook Places are among the more popular services.

Location-based services use a smartphone's GPS technology to track a person's location, if that person has opted in to allow it. After a smartphone user opts in, the service can identify their location down to a street address without the need for manual data entry.

What is location-based technology?

The term applies to any technology that uses real-time location tracking to function. This means the technology is persistently identifying the user's physical and geographical location. That information is used to perform services and functions. The technology is most frequently used with mobile devices, but it can be applied to any device that can provide a location, including desktop PCs.

How does location technology track your movements?

There are several mechanisms inside a typical mobile device that can provide location information. The most common are GPS, RFID, Wi-Fi and cellular. These will be explained in more detail in the next section, but they all operate on similar principles.

A mobile device communicates with other devices and hubs to function. That communication can be with satellites, routers, towers or anything else. Because the mobile device is pinging off of multiple communication hubs, its precise location can be triangulated.

Examples of technologies used to track location

A few examples will clarify how these methods work. It's worth noting that the most precise location tracking will incorporate more than one of these technologies.

GPS

The Global Positioning System is an array of satellites that exist solely to help find things across the planet. Any device with a GPS receiver (which includes most smartphones) can ping the satellites with that receiver. This will cause it to communicate with at least four satellites, and the satellites can compare the signal delay to pinpoint where the signal originated. This allows your phone to know exactly where you are and provide turn-by-turn navigation.

Wi-Fi

Wi-Fi location tracking is a bit different from other methods. Typically, a device will only connect to one Wi-Fi network at a time. This eliminates the possibility of triangulation. Instead, IP addresses are used for this form of location tracking. Every network has a physical IP address that allows the greater internet to know where it is. This is necessary to accurately send information across internet infrastructure. When your phone connects to a Wi-Fi network, it pairs with the physical IP of that network. That allows location services to know your current address.

Cellular

Cellular tracking works much like GPS. Instead of connecting to satellites, though, your device is connecting to cellular towers. Generally speaking, you will be in range of at least two towers, and that is enough for the system to use triangulation to find your location.

QR codes

QR tracking is closer to Wi-Fi in principle. When a dynamic QR code is scanned, it logs information related to the scan. When the QR code is established, its physical location can be recorded. That location can then be tagged anytime the code is scanned.

RFID

RFID tracking is effectively a combination of these other methods. The RFID scanner typically has a static location. By pinging off of other networks, the location of the scanner can be logged. When the RFID scanner is activated, it can tag its location when it records the access. This can be used to identify the location of the device accessing the scanner.

Uses of location-based services

Companies have found several ways to use a device's location:

  • Store locators. Using location-based intelligence, retail customers can quickly find the nearest store location.
  • Proximity-based marketing. Local companies can push ads only to individuals within the same geographic location. Location-based mobile marketing delivers ads to potential customers within that city who might actually act on the information.
  • Travel information. An LBS can deliver real-time information, such as traffic updates or weather reports, to the smartphone so the user can plan accordingly.
  • Roadside assistance. In the event of a blown tire or accident, many roadside assistance companies provide an app that allows them to track your exact location without the need for you to give directions.
  • Mobile workforce management. For logistics-dependent companies that employ individuals out in the field or at multiple locations, an LBS allows employees to check in at a location using their mobile device.
  • Fraud prevention. An LBS creates another level of security by matching a customer's location through the smartphone to a credit card transaction. Tying the smartphone's location to a credit card allows you to flag transactions made across several geographic locations over a short time.

LBS companies

Many app developers lack the resources to develop software to interpret a smartphone's location and instead use existing solutions through an API to save time and money. Many companies specialize in liaising with wireless carriers to connect companies with smartphone user locations. These companies provide tools to increase user engagement and connect with the most mobile phone users on the market. Companies well known for their LBS software include AT&T Mobile Marketing Solutions, Voxeo and Esri.

Image Credit: app_ipopba / Getty Images
Business News Daily Editor
Business News Daily Editor,
Business News Daily Writer
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