Apple's plans to display a bright blue bar on iPhone screens when an application is monitoring the user's location may feel like a threat to location-based marketing. More likely, it is an overdue wake-up call for retailers and banks to improve their communication about the benefits of location data.
The premise behind Apple's location data change in iOS 11 is to help users differentiate legitimate businesses using location data to send valuable messages and offers, from those with less noble intentions. Background activity such as location detection can also be a battery drain, so it benefits Apple to give users more control over how their iPhones consume power.
Banks and retailers increasingly use location data to send location-based offers or to alert customers when they're near a store that accepts mobile payments. Under Apple's plan, the implication is that consumers will want to turn off those apps to guard their privacy and make their phones more efficient.
But that blue bar could turn out to be less of a warning signal and more of a call to action.
The change could benefit app developers and merchants that rely on location monitoring, said Asif R. Khan, founder and president of the Location Based Marketing Association, whose members' livelihoods rely on effective multi-channel messaging through connected devices.
"If this development comes in the next Apple release, it is a step in the right direction for the industry," Khan said. "There is a lot of value in location, but the onus is on the developer to articulate that."
Currently, consumers downloading apps are asked immediately if they are willing to share location, with a simple yes or no being the common replies (Apple offers a third option — "While Using the App" — but it lets developers suppress this). The on-or-off scenario leaves little room for the consumer to gauge its true value. In September's iOS 11 update, developers will no longer be able to suppress the option of allowing apps to use location data only when in active use.
Presumably, app developers will find a way to fully explain the benefit of a relationship in which location data is exchanged for something of value. In doing so, this change could go a long way in alleviating a basic consumer fear, Khan said.
"A lot of times we hear from those who are concerned about privacy and being tracked, though that fear has somewhat diminished over the years," Khan said. "But I tell people to turn off their location settings for a day and see how long they want to go without Google Maps, or Uber, or a retail offer. Many find they can't go very long without it."
Indeed, retailers, are learning about the value of location data through their use of Bluetooth beacons and omnichannel commerce. The convergence of merchant mobile wallets and location-based technology tools has begun to develop more prominently the past two years.
But retail isn't the only sector interested in how Apple's operating system affects location monitoring and data.
Banks should be front and center in explaining the value of location data as a security measure in mobile banking, cardless ATM withdrawals and mobile payments, said Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC.
"The banking industry needs to get its story straight on why and how location-based services are being used," Crone said. The last thing banks need is for iPhone users frustrated with the blue bar on the screen turning off location settings, he added.
If Apple's new approach is imitated by Android handsets and other consumer devices, banks could actually be in a position to benefit the most. If consumers feel overwhelmed by requests for their location data, they may turn off some of those permissions out of frustration — but they may still let their banking app have access.
"We have been working with banks that are considering delivering ads and offers through their mobile banking apps," Crone said. "Our research tells us that if consumers are going to have a location-based app, it is going to be their mobile banking app."
Location-based marketers are keenly aware that the mobile landscape is changing in such a way that consumers will not only learn more about the value of location-based apps, but they may eventually benefit from controlling their own data.
"It won't be long before a new business will emerge because consumers are becoming more aware of the value of their data footprint and participate in 'personal data vaulting,'" Khan said.
It would be a case in which consumers would participate in the monetization of their data through some type of data vault system.
"When an advertiser wants to use that data to engage with them, each time it happens, the consumer would get paid like a micro transaction of 5 cents or 10 cents," Khan said. "This type of move with Apple's blue bar to alert about location monitoring will somewhat expedite that type of business," he added.