Consumers Wary of Location-Based Services

Location-based ads prompt nearly half of customers to take action, says a new study from Microsoft.

The software giant commissioned research in the United Kingdom, Germany, Japan, the U.S. and Canada, and found that 18 percent of consumers (22 percent in the U.S.) have seen an ad based on their location. Of those, 46 percent have taken action, including redeeming the coupon offered or visiting the store. Nine in 10 users think location-based ads are useful.

These findings were part of a larger study of whether consumers are sanguine or spooked by anything location-related.

The good news is that nearly all people who use location-based services think they're valuable. Still, many users think the risks outweigh the benefits.

Just over half of respondents (51 percent) had shared their location through services such as Facebook Places and Foursquare.

Of U.S. users, 99 percent thought the services were useful, but more than half (52 percent) said they were concerned about the potential loss of privacy. The most commonly used services: "practical" services such as GPS (70 percent of users), weather alerts (46 percent), traffic alerts (38 percent), and finding a restaurant (38 percent).

Just 5 percent of those surveyed use location-based services every day, though the number jumps to 10 percent in the U.S. (Japan, for the record, had the highest awareness of Facebook Places et al, the highest general usage, and the fewest privacy concerns.)

The major users of location-based services in all countries: young men aged 18-34.

Two-thirds of users prefer using free location-based service apps. Just 27 percent of U.S. users say they'd pay for the service, though Americans were the most willing to pay of any country surveyed. (Canadians were the least willing, with 16 percent saying they'd pay.) The average amount consumers are willing to fork over: less than $10.

Other findings: Fewer than one in five users tried services that tell others where they are, or finds the location of others.

The most popular services were Google Latitude or Places (52 percent of those surveyed had tried them) and Facebook Places (50 percent). Fifteen percent of U.S. users had tried Foursquare – the highest usage of any country.

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