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    New York Times: Tag-Along Marketing

    The New York Times reports that people are not taking to location-based social-networking, such as Foursquare or the new Facebook Places service, though marketers are eager to gather the data.

    As of August, only 4 percent of American adults who used the Internet also used location-based services, which allow people to “check in” to physical locations via their cellphones to earn coupons or keep up with friends, the Pew Research Center’s Internet and American Life Project reported last week. And only 1 percent of Internet users are on such services on any given day, an indication that those who do use the services still have not integrated them into their daily lives. […]

    How did businesses get so far ahead of consumers on this idea? And will consumers ever catch up? In order to answer this question, it helps to understand how technology companies make money by providing free services. When a customer buys a toothbrush from a drugstore, she pays with cash; when the same customer creates a social-networking profile on Facebook, the currency she uses is her personal data.

    Specific user data is valuable to advertisers because it allows them to target their marketing efforts more effectively. With social networking, hundreds of millions of people are willing to provide access to that data in exchange for a service they find useful, even while many express concerns about their privacy. […]

    Data about a person’s physical location would be immensely valuable to marketers and retailers, say analysts. But sharing information about where you are can seem creepy or, worse, dangerous, as the Web site Please Rob Me showed earlier this year when it demonstrated how easy it would be for potential thieves to use social networks to find homes whose occupants were away.

    Meanwhile, the upside of the transaction is unclear to many people, said Melissa Parrish, an analyst at Forrester Research. None of the efforts so far have reached the “sweet spot of coolness and utility” that will get people to share their data, she said.

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