Forrester punctures Location Based Bubble

Large research house punctures Location Based Services hype shocker - AdAge:

Marketers, hold off on Foursquare -- for now. That's the verdict of Forrester Research on location-based start-ups, which, despite their reputation as the hot new media, are still too small for major marketers. The research firm finds that these heavily-hyped apps currently make sense mainly for brands seeking male influencers.

In a study out today, Forrester finds that only 4% of U.S. online adults have ever used location-based mobile apps such as Foursquare, Gowalla and Loopt. Only 1% update these services more than once per week. What's more, 84% of respondents said they are not familiar with such apps, leaving the vast majority of Americans online still in the dark about location-based apps, which have had the marketing world obsessing over them in recent months.

The report could also be a wake-up call for social media on mobile phones, especially when comparing the location services to the last social-media darling, Twitter. The micro-blogging service reports 35% of its 125 million registered users are in the U.S. and only a fraction of that number accesses Twitter via mobile. In April, Twitter said 37% of its usage comes via mobile clients. Apply that percentage to U.S. tweeters -- we must extrapolate because the company does not break out U.S. users via mobile specifically -- and the 16 million Americans using Twitter via mobile is about comparable to the location-apps audience in total.

Kudos to Forrester for being realistic. As one of the commentators on the piece says:

Wow - for once, Forrester isn't riding the social media bandwagon and it gets taken to the woodshed by the commenters.

Step back for a sec, take a breath, and look at it thru the lens of "I'm in a marketing organization with big sales goals but very very limited resources so where should i be prioritizing my investments?" and you might see that Forrester's recos on LBS are helpful.

This is quite interesting, because the usual pattern for the big research houses is to hype up the new new thing, so one wonders why Forresters (among all of them) have decided to puncture the Location Based Service bubble rather than run with it

(This is not to say that it won't one day be an order of maginitude larger, just not now - its too early)