A few years ago, the location of businesses became a big question mark, as well as a strategic issue, as people wanted to shop or dine nearby. These “geo-fencing” issues were especially important for Yellow Pages companies.

Since then, search has become more the norm, along with GPS-based phones, which have location baked into them. What hasn’t changed is that you still need the geo-fencing data tied with other meta data for local discovery. You still need to know what subway line is near, where the nearest parking garages are, or what your choices are for dining when you are visiting your friend in Chelsea.

Companies such as Maponics, Urban Mapping, Zillow and others are still licensing or providing their geo-fencing results. And now, the customer base is more universal among companies in the local space, along with key verticals related to schools, real estate and other verticals. Other companies, such as Yahoo, have used such data to introduce Proximity Search.

The result can be a seamless paradigm that integrates local mapping information with coupons, deals and other merchant information. But not everyone gets it.

“Some publishers still don’t get how to have cross platforms,” suggests Maponics CEO Darrin Clement. “They’re still looking for leads in the social world; still bolting on coupons to their results. They’re too intent on protecting the existing paradigm.”

Clement says mobile users, especially, need seamless roaming of information. He notes that some local services will just use the Zillow API. And it works well for start-ups. But Zillow only has 7,000 neighborhoods, he notes. “We have 160,000. Zillow has 100 cities. We have 2,300 cities.”

When it comes to Local Yokel Media’s business focus, it’s all about 15 miles. That’s because 80 percent of consumer spending is done within 15 miles of home. CEO and Founder Dick O’Hare shared that fact at this afternoon’s session on “Local Targeting: Getting the Bull’s Eye.” O’Hare added that geo-contextual relevance is the key to optimal ad performance. “With the right targeting on display, the traditional marketing funnel can collapse and go from awareness to purchase in one step,” O’Hare said.

Co-Panelist Jeff Minich, senior product marketing manager for Yahoo, agreed. But he also zoomed in on the importance of addressability by targeting the right users and measuring the full impact of every impression. “It’s all about finding the optimal radius around brick and mortar locations for achieving offline performance objectives.”

JiWire, the mobile Wi-Fi network reaching 40 million users each month, announced today that it raised $20 million in funding led by Trident Capital. In the past year, JiWire expanded its business to enable advertising across both mobile applications and public Wi-Fi using Compass, an interactive platform that makes locating brands easier. Compass turns standard display ads into full screen app-like experiences that are geotargeted to a user’s location.

Another example of JiWire’s expansion is its partnership with Groupon to hyperlocalize daily deals. We referenced a Google study on smartphone users in April that found 95 percent of smartphone users are searching for local information.We can expect to see location-based advertising continue to bridge the gap between the lesser known local SMB and the mobile consumer.

It’s hard work distilling 20,000 people, hundreds of sessions, droves of start-ups, seemingly endless parties and even a Mike Tyson cameo into a cliffs notes recap of SxSW Interactive. Not that anyone is shedding any tears for me. America loves lists (or so I’ve heard), so here are “the big ideas” that have my brain buzzing post-Austin.

1) The Check-In Gets an Ego Check: Kudos to Gowalla’s Josh Williams, cofounder of a company that has leveraged check-in fascination to fund and fertilize the business, for reminding the location-based services space that check-ins were originally designed as means to greater value, not as ends unto themselves. When misconstrued, badges, passport stamps and other social rewards that fail to tell a more compelling value story (whether tangible, personal, philanthropic or other) can become a hindrance rather than a facilitator. “We’re drinking our own Kool-Aid,” Williams admonished.

So what does “getting real” really mean? Not a lot of concrete nuggets were offered. Perhaps it’s being able to tell a larger, more colorful personal and social narrative around places you’ve been or communities you’ve interacted with (the Gowalla idea). Maybe it’s about social recommendations that blend local places with friends’ activity (hello Foursquare). Maybe it’s gamification for larger social good (see Seth Priebatsch’s grand plan to use game mechanics to fix education). Or maybe its something else. But it’s not check-ins … not long-term, at least.

2) So, This Whole Deal-a-Day Thing May Be MUCH Bigger Than We Thought: Actually, many of my colleagues have viewed group buying as a local commerce game changer since its earliest days. But the deals session at SxSW, particularly a slide from Yipit’s Jim Moran, brought this burgeoning ecosystem into sharper relief.

I’m well aware of the critical places that deals sites, white-label providers, verticals and aggregators hold and can feel the rising demand for data to justify the opportunity for publishers. Exchanges were a natural as the space grew. But there is also real potential in merchant services, consumer services and merchant agencies. These are largely new doors to be unlocked. There may be more opportunity in b-to-b deals as well, where promising rollouts are limited (Business Insiders’ Pipeline, for one).

The next nuts to crack: better merchant care to boost customer retention, self serve that’s truly accessible (Groupon’s merchant center hasn’t exactly caught fire) and, for publishers, tighter integration of deals into brand content (not as blunt ad units).

3) Won’t You Be My Neighbor?: Maybe, if I knew where the neighborhood started and stopped. Much of the future of the mobile-social intersection hinges on definitions of, and ability to utilize, location. Sounds mushy, huh?

To paraphrase NeighborGoods CEO Micki Krimmel, technology has been great for building affinity and interest groups, but can it be equally useful in fostering local connections? Foursquare and others are beginning down this path with their location + social recommendation engine, but the layer that NabeWise CEO Ann Baldinucci says is missing is the one that “sits above property listings and addresses to tell you what a community or neighborhood is all about.” That is the context wrapper that is largely absent.

Joe Stump from SimpleGeo noted that the demand for neighborhood-level data is fervent, but limited in its application if no social context is connected to it.

4) Twitter Saves Linear TV!: Well, maybe not singularly save it, but it certainly can provide a boost. Chloe Sladden, Twitter’s Director of Media Partnerships, shared anecdotal evidence that integrating second screen activity with live, linear event programming can enhance the real-time appeal of a show (i.e., DVR can’t replicate the dynamic social experience users have when connecting over a live show).

Interestingly, Gavin Purcell, the supervising producer of “Late Night with Jimmy Fallon,” foresees a new job title growing around second screen experiences. Essentially, this person will extend the role of the community manager cross-platform to connect big screen and second screen interaction.

Many local broadcasters are already effectively utilizing Twitter in their newscasts by soliciting audience questions and surfacing story ideas. Now, can they extend the experience to a second screen to create more dynamic conversation?

SCVNGR “chief ninja” Seth Priebatsch and Gowalla CEO Josh Williams both employ game mechanics to elevate their location-based services, and both believe that gaming’s inherent fun factor can motivate more important behaviors, including social good. But that’s where the similarities stop.

The duo delivered keynote addresses at SxSW Interactive, Priebatsch in front of 4,000, Williams in front of a smaller crowd is his company’s backyard (figuratively — Gowalla is Austin-based).

Priebatsch’s thesis essentially reads like this: The construction of the social ecosystem is largely complete; “the framework has been decided.” It’s called Facebook. The next decade will not be about building digital plumbing or social connections, but gaming the established architecture to “traffic social influence.” SCVNGR uses this game dynamic to drive its users to complete location-centric challenges.

The 22-year-old, a proud Princeton dropout donning PU-orange shades, proceeded to offer examples of powerful game mechanics in action, as well as broken processes that gamification can remedy.

Take Groupon, for instance, as a potent example of the game layer driving customer acquisition. The deal-a-day monster has essentially fused three powerful game mechanics into a $15 billion enterprise equation: “free lunch” + communal gameplay (sharing across decentralized networks) + countdown = the deal is on!

Then there’s customer loyalty, where American Express has ingeniously leveraged “level up” game psychology to create status through card colors (gold, platinum, black). SCVNGR clearly drew motivation from this concept with its new LevelUp pilot that combines LBS with Groupon-esque discounts.

SCVNGR's Seth Priebatsch

For Priebatsch, there are no boundaries to the influence that games can wield in the social realm. For Williams, however, “gamification” (a dirty word in his book) is a means to an end. What’s that end? That’s what LBS must figure out to escape its current “purgatory.”

That purgatory, Williams noted, is the potential not only for check-in overload, but for check-ins and virtual rewards (badges, et al) to be misconstrued as endpoints rather than context wrappers for driving greater utility.

Williams’ future for LBS includes narrating personal histories, building and solidifying communities and fostering social good, though he admits that “social validation” will always be a driver (see what enabling photo posting did to mainstream Facebook).

Foursquare is the biggest pure-play LBS, with 7.5 million users. SCVNGR and Gowalla each count about 1 million. That’s an intriguing start, but far from a mainstream experience. Neither Priebatsch nor Williams had concrete ideas for how to push forward (at least none that they let on), but this much they certainly agree on: Building bolder value requires delighting users, and that must transcend temporal check-ins.

Though no cure-all solutions were put forward, these entrepreneurs’ contrasting outlooks on the future of the converged mobile-social-local universe offered a refreshing reminder that not all location services are created equal…that the space isn’t confined to just Foursquare and a flock of rewards-based followers.

Gowalla's Josh Williams

Yesterday I had the chance to talk to Foursquare GM Evan Cohen. A former Jupiter analyst and Bebo exec, Cohen was brought aboard last year to help steer the ship amid rapid growth.

The wide reaching discussion hit upon the company’s perpetual innovations “beyond the check-in” and the challenge in appealing to the large but elusive small-business segment.

On the former point, the company gets points for being first to market but also for not resting on its early mover advantage. Part of this is making Foursquare a better discovery engine — in line with a big mobile trend we’re seeing.

“The core utility is simply getting friends to find each other out in the world,” says Cohen. “Building on that, it’s the notion of discovering what you should be doing next, or tonight, or tomorrow, based on your tastes, proclivities and what your friends have done.”

Going Down (Market)

As for the SMB challenge, it’s something the company is well aware of, and is working on ways to boost its appeal to merchants. The parallel I’ve made in the past (sometimes to glazed eyes) is to Groupon.

In other words, Groupon has uncovered massive demand for the concept of paying for a new customer instead of traditional “faith based” advertising. It’s the new local marketing.

Foursquare’s check-in deals are often thought (unfairly) to only reward existing customers. But with its continued moves toward local discovery (i.e., nearby specials), it could likewise build this Groupon-like appeal in acquiring new ones.

You could even argue that specials offered in the mobile context are more appealing than desktop-based group buying, due to their immediacy. This is especially true for businesses with dynamic levels of inventory.

Think restaurants and happy hours: The idea is to create flash mobs. It’s group buying meets mobile. Some businesses have already done this by getting clever with Foursquare’s swarm badge (see: Milwaukee’s AJ Bombers).

Cohen adds that Groupon also has parallels on the user end. Daily deals have an interesting discovery element in buying things you wouldn’t otherwise seek out (pottery lessons, hot air balloon rides, etc.). Not only the price, but also the impulse, is right.

We could see an announcement soon along these lines, though Cohen understandably couldn’t confirm or go into detail. My speculation would be some version of the above, possibly involving volume discounts with a shorter leash than Groupon’s 24-hour clock.

In the meantime, the company continues to evolve other ways it pushes specials. This includes partnerships with brands and retailers, such as Pepsi and Vons, to target specials based on a broader set of data points than just one check-in.

Taking It to the Streets

Beyond the appeal it could have as a self-serve tool for SMBs, Cohen sees the need to scale with local reseller partners that have feet on the street and existing SMB advertiser relationships.

Until it gets that far, it’s doing pretty well on the product’s momentum and viral growth. It’s even marshaled avid users to evangelize Foursquare to merchants through a recently launched local ambassador program.

Judging by its innovation across the board, I’m confident it will find other creative ways to tackle that elusive SMB market. We’ll also see Foursquare continue to build the user and advertiser sides of the equation, which dovetail nicely in local specials.

This all goes back to discovery, which will be a key design principle going forward. Cohen also takes a page from other industries.

“We do some of that now in showing what’s around you, what’s trending and friend check-ins,” he says. “We can do so much more. We see ourselves in some ways as the Netflix or the Amazon for the real world.”

To date, most location-specific advertising requires in-store check-ins to unlock discounts and special offers. Naturally, that necessitates having a storefront that lends itself to walk-in — and check-in — traffic. Foursquare, Gowalla, Loopt and others have garnered first-mover hype with these location-based services but have struggled to achieve mainstream adoption beyond the tech elite.

JiWire is extending geotargeted opportunities to brands that have a local presence but may not have a storefront with a sign bearing their name. The public Wi-Fi network provider is introducing Compass, an advertising platform that creates a geo-fenced, ad-in-app interactive experience for users, allowing them to discover nearby brands and then connect with them.

Compass is a direct outgrowth of JiWire’s recent acquisition of NearbyNow, one of several companies (eBay’s Milo, Google Product Search, Krillion) competing to showcase real-time product inventory at store level. Fusing NearbyNow’s capabilities, Compass enables its 40 million on-the-go users to survey brands that are in stock at local stores, then engage them directly. These behaviors include accessing walking and driving directions, clicking to call or text a retailer, reserving and/or purchasing products, and booking appointments. Advertisers can layer on additional content such as promotional videos as part of customized tabs that they build out.

David Staas, JiWire’s senior VP of marketing, told BIA/Kelsey that the integration of NearbyNow allows JiWire to generate “advertising with location content as part of the overall message.” The implications are a more delightful customer experience and a potential move to performance advertising models based on the actions that the ads can motivate. Ads will be sold on a CPM basis to start.

Here’s how it works. JiWire’s networks serve a mobile, tech-savvy clientele in public places such as cafes, coffee shops and airport lounges. These users are shown standard display ads. But when they click through, the ads expand into a full-screen, app-like experiences. JiWire-NearbyNow synergy kicks in when the app is launched, as Compass uses geo-fencing technology to target a user’s location to present location-relevant store information and product data.

Launch partners include Clinique, HP, Ritz Camera and Groupon. JiWire struck an agreement with the deal-a-day giant last week to generate neighborhood-level deals … a fit for JiWire’s transient audience. For Groupon, the pact marks a new level of geographic granularity.

More generally, the implications could be numerous. Check-ins could be scaled to a wider base (JiWire’s 40 million customers to Foursquare’s 4 million) and scaled to businesses with strong brands but without storefronts. It also broadens the opportunity beyond retail outlets and into a variety of franchise industries. Furthermore, it begins to close the loop on LBS and social buying. Geo-fencing locates consumers at neighborhood level, feeds them an array of search-and-shop options, and offers related deals.

During the 72-hour whirlwind that was ILM:10, several other announcements also came down the pike. Among them:

- Group buying giant Groupon continues its flurry of partnerships. The Chicago-based deal a day inked separate deals with the Chicago Tribune Media Group and JiWire. The Tribune agreement calls for Groupon to power local deals each weekday on the company’s recently launched ChicagoShopping.com site. ChicagoShopping.com wants to add depth to the deal-a-day experience by enabling users to personalize deals around specific shopping interests.

Groupon has several co-branded deals with traditional media companies, including McClatchy and Media General. Typically, it furnishes the publisher with an exclusive offer for its market audience and splits revenues equally. All merchant sales, creative and payment processing is handled by Groupon, which as a result, is able to add valuable buyer information to its database.

The pact with JiWire marks an important step for Groupon in targeting more granular, sub-metro deals. It also opens up new inventory possibilities for a brand that has quickly seen demand outstrip supply. JiWire’s network of public Wi-Fi hotspots (more than 30,000 in locales such as cafes, coffee shops and airport lounges) will allow for hyperlocal targeting of deals at venue level. JiWire users are typically on-the-go and tech-savvy, which may ripen new deals categories such as travel-oriented restaurant and retail chains.

Deal-a-day competitor LivingSocial has also debuted sub-metro deals, but not with such granularity. In related efforts to open up new inventory, Groupon introduced personalized deals over the summer.

- It didn’t take eBay long after its $75 million purchase of Milo to begin incorporating the company’s real-time shopping data into its product line. EBay is integrating Milo’s local store inventory and pricing information into its RedLaser barcode scanning applications.

RedLaser’s single-scan interface enables product and price comparisons at nearby stores. Milo’s data adds yet another content layer. EBay is also expected to incorporate Milo functionality into other online and mobile products, notably its Shopping.com site and perhaps ProStores (an online storefront software company for SMBs).

- ComScore released an early wave of holiday online spending stats (Nov. 1-Dec. 3). The gradual economic comeback has triggered a 12 percent increase year over year in total online spend. Cyber Monday (Nov. 29) eclipsed $1 billion in e-commerce by itself.

Large national brands have experienced the strongest growth. The top 25 online retailers are up 20 percent over 2009, and some of that increased market share is at the expense of small and mid-market shops, where sales remain flat.

While 2010 has been lauded as “the year of local,” it has also seen an influx of interest and spending by national brands to drive neighborhood-level store traffic. These initiatives have taken diverse (and sometimes highly publicized) forms: Gap’s deal-a-day offer through Groupon, Best Buy’s mobile check-in experiments with Shopkick, and a host of real-time inventory providers (Google Product Search, Milo, NearbyNow) allowing retailers to engage customers at the apex of purchase intent.

Geomentum VP Casey Squier told the ILM:10 audience that, as a byproduct of this hyperlocal focus, national brands are “turning to large agencies to put together a local program that can be understood by C-level execs that resonates throughout the entire organization.”

That’s exactly what Geomentum hopes to do for its clients when it officially launches the new technology in March 2011. Spawning from traditional agencies, it allows its client to do store-level planning by layering their sales data on top of Geomentum’s 2,000 data points about local neighborhoods. Retailers can then alter their media mix accordingly to better reach customers where they live and buy.

Ultimately, this should foster higher-quality lead generation, which is exactly what Marchex is touting to agencies through its performance-based pay-per-call platform. Scott Greenberg, Marchex senior VP of strategic development, stressed that as online and mobile advertising becomes more complicated, merchants of all sizes still demand the simplicity and measurable quality of phone calls.

Marchex’s platform allows resellers to create and distribute ad content for its clients across a pay-per-call network. Because performance governs the business model, businesses pay only when the phone rings. While Greenberg reports that the platform is largely being sold to larger brands to enable them to track store-level leads, he also hopes that it continues to move down market to SMBs.

Marchex is placing its bets on calls, but Reply.com CEO Payam Zamani thinks that search and display can still be effective as long as these clicks, or leads, are “enhanced” to account for consumer intent and location. Otherwise, driving targeted traffic is both expensive and imprecise.

The pledge to businesses through the Reply Marketplace is simple: “sign up and receive locally targeted and intent specific prospects” based on particular customer actions being sought. Echoing Marchex, he noted that two-thirds of the company’s business comes from bigger businesses looking to locally target.

At ILM:10, Pandora’s Cheryl Lucanegro (senior VP of ad sales) and Brian Mikalis (VP of performance sales) made it very clear where the popular Internet radio service is headed next — to your car dashboard.

The company is leveraging two fundamental insights in driving (pardon the pun) its migration into the vehicle: More than 50 percent of all radio listening occurs in the car, and more than half of Pandora’s traffic is mobile (with more than 100,000 mobile activations each day) … a natural transition for on-the-go users.

Currently, Pandora’s auto strategy is nothing more than basic Bluetooth phone connectivity, but that will change in 2011 with manufacturing deals having been announced with Ford, GM and Mercedes.

Auto represents just the latest turf traditionally reserved for over-the-air broadcasting that Pandora is now loudly treading on. Now, the Oakland, California, service is targeting local businesses, many of which have longstanding relationships with legacy stations.

Mikalis runs an inside sales team that mainly prospects national and mid-market clients but has also begun local outreach. He emphasized that Pandora is also “aggressively talking to companies with feet on street to allow them to include Pandora as part of their network to find distribution for their advertisers.”

Pandora users personalize streaming stations around their favorite music genres and bands. This behavioral information, combined with gender, age and ZIP code, gives its sales force the ability to do multi-layer targeting for local business advertisers. Lucanegro said it distinguishes Pandora’s value propositon from traditional radio by allowing clients to “reach the right person with the right message at the right time,” and then measure how well they’re doing this.

Advertising can assume several formats (Web, mobile, audio, video, banner) and create multiple consumer experiences (branding, direct response, engagement, multi-screen). For instance, businesses can direct audio commercials to consumers, coupled with companion banners that allow them to simultaneously act on it (including unlocking local offers). The net effect, Lucanegro said, is pushing a message in front of consumer “more dramatically,” and at a price point that is competitive with its traditional broadcast rivals.