A patent, made public last week, covers a system to not only track, through mobile devices (Kindle, anyone?), where individuals or aggregated users have been, but determine where they're likely to go next to better target ads, coupons, or other messages that could appear on a mobile phone or on displays that individuals are likely to see on their routes. The system could also use someone's identity to further tailor the marketing according to demographic information.
You'd better watch out, you'd better not cry
The patent, granted on Dec. 6, was first applied for in March 2007. As with any patent or application, there are two big considerations. One is the extent of the legal protection the claims seek, which describes the specific system. That tells you how easily the company could use the patent as a defensive or offensive competitive weapon. The other is the insight you can get into a company's strategy.
We'll start by looking at the first independent claim of the patent:
A system, comprising: a processor; and a memory coupled to the processor, wherein the memory comprises program instructions executable by the processor to: determine one or more locations a user of a mobile device has visited on a current path; predict a next destination for the user of the mobile device based on the one or more locations the user of the mobile device has visited on the current path, wherein to predict the next destination, the program instructions are further executable to: predict a plurality of likely destinations, and receive one or more bids for communicating advertising content regarding one or more of the likely destinations for the user of the mobile device, wherein the next destination corresponds to a likely destination for which a selected bid was received; and communicate advertising content to a display device other than the mobile device located along the current path between a current location for the mobile device and the next destination.
Breaking it down, a mobile device determines/provides locations. The system calculates a path and then predicts a set of likely next destinations. Then the system takes bids from third parties that want to send marketing messages to displays along the route the person takes, probably monitoring speed and direction to time displays for maximum chance of visibility.
Additional claims make clear that the ad could also go to the mobile device -- including a message to tell the person to look over at a particular display. Shades of a science fiction story (or Minority Report), where personalized ads follow and appear on public displays wherever you go.
What is most interesting in this patent isn't how easily Amazon might block competitors from using similar systems, though the protection might be broad enough to enable that. The key is how Amazon is approaching the strategy of literally following people and trying to guess where they'll go and what they're interested in.
They know when you're awake
According to the patent's description, location could be specific spots inside a mall:
In some embodiments, mobile device users' current and past travel patterns may be analyzed to determine a predicted next destination. For instance, by analyzing the recent movements of a mobile device user among stores in a shopping mall, it may be determined that a particular store is a predicted next destination for the mobile device user. Thus, advertising content for the predicted destination, such as coupons, may be sent to the mobile device user.
This is a bare-knuckled approach to tracking and analysis that other companies have yet to publicly admit (though it doesn't mean they aren't working on similar concepts). Consider what "analyzing" would mean. It's unlikely to only be examining a pattern of movement, though that would obviously be part of it. Such a system goes beyond malls:
For example, a mobile device user may be tracked while attending a large entertainment venue or sporting event and coupons advertising a discount at a restaurant that the mobile device user is likely to visit based on the user's traffic or travel patterns at the entertainment venue or sporting event. Similarly, mobile device users attending a large venue may be tracked and provided coupons for vendors the mobile device users are likely to pass based on their recent travel patterns in and around the venue.
Location ties to function. If you know what sort of establishment is at a spot, you can start to make more intelligent guesses of what a person is doing. The more stops, the more chances of putting together a picture of what a person is doing. And if you store this data over time, you might build a more complete picture.
They're everywhere, they're everywhere
Now consider where the ads might show up. It's not hard to imagine Amazon trying to partner with retailers that have TVs, computer monitors, digital signs, or other ways of displaying advertising.
Amazon's approach is more sophisticated than the usual proximity marketing, where a person's location would trigger messages for nearby businesses. Maybe GPS provides the location, or maybe cell tower triangulation, according to the patent.
But location determination isn't limited to those. You could locate someone based on a mobile commerce purchase, where some company or other notes the exact store in which the purchase was made. Technically, you could pinpoint someone based on Wi-Fi hotspot triangulation (an approach that both Apple and Google can use). Maybe such a system uses facial recognition and licenses surveillance camera data to literally see who is around.
Not all patents get turned into products or services, but this one might be too tempting to pass up. Is such a system ready to roll out to Kindle software running on mobile devices? Will it be included on Kindles? Has it been already?
CBS MoneyWatch has asked Amazon to make someone available to discuss the patent and its implications. We'll update this post with any response.