While services like Gowalla and Foursquare still haven’t become household names outside of the early adopter market yet, the technology behind these apps is now solidly mainstream. According to a new survey by the Mobile Marketing Association (MMA), about two thirds of iPhone owners now user location services at least once a week. Taking all cell phone users into account, 22% of adults between 25 and 34 use location services at least once a week, mostly to locate nearby points of interests, shops and services.

Focus: Location-Based Apps and Advertising

The survey also asked users how likely they are to take action on location-based advertising on their mobile devices. According to the MMA, about half of those users who noticed ads in location-based apps took some action. On the other hand, only about 37% of respondents who noticed ads while sending or receiving text messages took any action based on these commercial messages. For those we noticed ads while browsing the web, this number was only 28% (which still seems rather high to us).

Given that most people use location-based apps when they are already looking for a certain store or product, it makes sense that these users are more likely to respond to ads than people who are just browsing the web.

Are Users Really Willing to Let Apps Track Them Passively in Return for Discounts?

“Consumers are interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons.”

Interestingly, the MMA survey also notes that “consumers are interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons.” While mobile coupons and other perks are definitely interesting to consumers, passive location services that track consumers in return for discounts have never really been tested in the wild. These services may sound good on paper, but the privacy implications of using these apps are hard to neglect and it remains to be seen if users are actually willing to give up their privacy in return for a 10% discount at Crate and Barrel.

Chances are that we will see more of these passive tracking services once the iPhone 4 operating system arrives later this year. The current generation of the iPhone’s operating system doesn’t allow apps to run in the background and track your location, but this will be possible in the next version of the iPhone OS.

frederic lardinois

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