MS Research

1. Location Based Services Usage & Perceptions Survey Prepared by Cross-Tab Marketing Services & Telecommunications Research Group for Microsoft Corporation

2. Background This report summarizes location-based services (LBS) research commissioned by Microsoft to understand thoughts and opinions about technologies that allow someone’s location to be shared with other people and organizations The research was conducted by Cross-Tab Marketing Services Interviews were conducted online between Dec. 13th and Dec. 22nd, 2010 among 1,500 respondents across US, UK, Germany, Canada, and Japan

3. Executive Summary 6 in 10 are aware of location-based services (LBS) Higher familiarity increases usage of location-based services (LBS) - 89% who are very familiar use LBS vs. 72% who are somewhat familiar. Awareness is highest in the UK and US. Familiarity is highest in Japan which has had widespread LBS longer than other countries studied. People who use LBS find them valuable 51% report using LBS. 94% said they were either very valuable (41%) or somewhat valuable (53%). Perceived value increases with use. 4 in 10 use LBS at least once per week. Mapping applications and Weather Alerts are the most common applications of LBS. Young Men Lead LBS Adoption Younger respondents (18-34) and those who spend more per month for their mobile phone service are more likely to be familiar with and use LBS. Men have higher awareness and familiarity than women but overall usage is similar. Men have less concern over the risks of sharing their location information.

4. Executive Summary Location-based sharing is not yet widely used Only 18% use location-based services to share their location with others. (US 20%, UK 19%, Germany 15%, Canada 21%, Japan 15%) Less than 10% believe this is a useful service regardless of geography. Concerns about privacy run high for location sharing with other people and even higher for sharing with businesses. However, LBS are considered valuable among regular users People are concerned about privacy and want control 52% of respondents expressed strong concern with sharing their location with other people or organizations. Concern is higher for sharing location with organizations than other people. (US 56%, UK 51%, Germany 53%, Canada 55%, Japan 39%) 58% of respondents are concerned specifically about controlling the people and organizations that have access to their location. (US 70%, UK 66%, Germany 54%, Canada 59%, Japan 45%) The clear majority are concerned about sharing their location with people or organizations they have not specified (87%), followed by sharing their location without consent (84%), having personal information or identity stolen (84%) and overall loss of privacy (83 %). 51% of consumerssaid that the ability to control how their information is used would make them more comfortable. (US 56%, UK 50%, Germany 55%, Canada 38%, Japan 55%) 49% would be more comfortable if they could control with whom the information is being shared.

5. Executive Summary “Practical” LBS services are considered most beneficial and the ones consumers are most likely to adopt first Emergencies, locating children/family and finding directions are by far the most beneficial LBS applications. “Social” LBS will grow more slowly as benefits become evident only after a critical mass of consumers adopt the technology. Those who are more likely to use LBS are less concerned about potential risks (5-10% lower on average). (US X%, UK X%, Ger. X%, Can. X%, Japan X%) Perceptions of benefits increase and concerns about privacy drop after consumers try LBS. Most consumers state they are unwilling to pay for LBS On average, more than 70% prefer to use free LBS applications. This preference is highest in Canada (80%) and lowest in the US (66%). Willingness to pay is less than $10 per month. Younger consumers have a higher willingness to pay. Nearly half (46%) say they’ve taken action based on a mobile ad they have seen Actions taken include redeeming the coupon offered, or visited the store. Nearly 1 in 5 consumers say they’ve seen a location-based ad. (US 22%, UK 14%, Germany 14%, Canada 18%, Japan 24%) 80% consider these types of services very or somewhat valuable.

6. Executive Summary

7. Recommendations For Consumers – How to use location services safely Location based services aren't particularly dangerous on their own but you need to think about the layers of information you leave online. As you use more online services, it becomes easier for people to connect the dots on your activities, which could lead to harm. Pay Close Attention to the settings that use your location Be aware of the location privacy settings on your phone, social networking sites, and the applications you use. Don't geo-tag photos of your house or your children. In fact, think about disabling geo-tagging until you specifically need it. Limit who knows your location For many people, social networking sites link everything together. Limit who you add to your social network location services, and choose not to make your location data publicly available or searchable. Only trusted friends should know your location. If you have contacts you don't fully know or trust, it's time to do a purge. When using location services, check in thoughtfully Think about your safety if you check in when you’re alone. Don't “check in” on location based social networking sites from home, or a friends house, or anywhere you might put others at risk. Make sure you don’t include GPS coordinates in your tweets, blogs or social networking accounts.

8. Recommendations For Developers We believe consumers should always have choice and control over access and use of a device's location. Application must not override or circumvent a user’s choice to disable location services on the mobile device Application must provide settings that allow the user to enable and disable applications access to and use of location If the application publishes or makes available location data obtained from any other service or person, (including ad networks), application must enable a method to obtain opt-in consent Application must request location and retain and use location data only as necessary to deliver the location-aware features application provides to users Application must make a privacy policy available to users that informs them about how location data is used and disclosed, and the controls users have over use and sharing of location data Application must adopt measures to protect against unauthorized access to, use and disclosure of location data

10. Among those who haven’t heard of LBS, 19% say they are familiar.

11. Among the unfamiliar 77% claim they have used LBS. LBS Adoption Japan 78% of those familiar US Canada UK Germany *Among those who heard of or familiar with Note: 51% report having used LBS regardless of awareness and familiarity. Q1. Have you heard about technologies that allow you to share information about your location with organizations (service providers, apps providers, retailers, social networking companies etc.) or other people? Q2. How familiar are you with location based services? Q3. Have you ever used services that determine your location to provide you more information about where you are (shopping, restaurants, ATMs, etc.) or where you are going (directions, store locations, traffic, etc.)?

12. US Consumers Have The Broadest Adoption Of LBS Brands Canada (59%) and Japan (57%) report highest usage rates, UK (43%) the lowest. US consumers show the greatest breadth of usage. Canada has the highest usage of Google while Japan is highest on using GPS. Q3. Have you ever used services that determine your location to provide you more information about where you are? Q4. For which of the following have you used these services?

13. Frequency Of Usage Twice as High In US 35% in the US use LBS at least several times per week which is nearly 2x higher than most other countries surveyed. LBS services are considered most valuable in the US (99%) and least valuable in Canada (88%). Q5. How often do you use these location based services?

14. Young Consumers Lead The Adoption Of LBS Men have higher awareness, familiarity and usage of LBS than women. Q1. Have you heard about technologies that allow you to share information about your location with organizations (service providers, apps providers, retailers, social networking companies etc.) or other people? Q2. How familiar are you with location based services? Q3. Have you ever used services that determine your location to provide you more information about where you are (shopping, restaurants, ATMs, etc.) or where you are going (directions, store locations, traffic, etc.)?

15. LBS Services Are Considered Valuable by Those Who’ve Used Them Among those who report having used LBS, 94% consider them very or somewhat valuable. The most commonly used applications are GPS (70%) and weather alerts (46%). LBS is considered valuable 94% Q3. Have you ever used services that determine your location to provide you more information about where you are (shopping, restaurants, ATMs, etc.) or where you are going (directions, store locations, traffic, etc.)?; Q4. For which of the following have you used these services?; Q5. How often do you use these location based services?; Q6. How valuable do you think these types of services are?

16. Japan & US Have Broadest Usage Of LBS Japan has the highest adoption of LBS for shopping and restaurant information. Q4. For which of the following have you used these services? Q6. How valuable do you think these types of services are?

17. LBS To Locate People Has Low Penetration Most people report not using LBS to disclose their location or to find out more about the location of others. Users of these services use them often and consider them very valuable. Over 6 in 10 use LBS at least 1x per week 64% LBS is considered valuable 91% Q7. Have you ever used services that use location to tell others where you are or to find out where other individuals are?; Q8. Which of these location based services do you use?; Q9. How often do you use these location based services?; Q10. How valuable do you think these types of services are?

18. Penetration Is Similar Across Countries Studied Japan (76%) and US (65%) are the leaders in GPS usage. Google (73%) has the highest usage in Canada. Q7. Have you ever used services that use location to tell others where you are or to find out where other individuals are? Q8. Which of these location-based services do you use?

19. Frequency of Usage Higher In US 60% in the US use LBS to locate people at least several times per week which is nearly 3x higher than Japan and Canada. LBS services to locate people are considered most valuable in the US (99%) and least valuable in UK (82%). Q9. How often do you use these location-based services? (e.g., tell others where you are…) Q10. How valuable do you think these types of services are? (e.g., tell others where you are…)

20. Consumers Have Strong Concerns About ID Theft & Unauthorized Location Sharing ID Theft and unauthorized location sharing in any form is highly concerning to 1 in 2 respondents. Men express less concern over the risks of sharing their location information Q15. How much do the following concern you when sharing your location with other organizations or people? S3. Please select your gender?

21. Location Sharing with Others: Concern is Highand Perceived Usefulness is Low Concerns about location sharing and who controls that information is highest in the US and lowest in Japan. On average, 92% feel that sharing their location with another others would not be useful. Usefulness of location sharing with others is extremely low across all countries studied. Q18. Concern about controlling who has access to your location Q19. The risks outweigh the benefits – sharing w/people US Canada Japan UK Germany Q16. How useful would it be for you to be able to share your location with other people? Q17. How concerned are you about allowing other people to view your location? Q18. How concerned are you about controlling who has access to your location? Q19. Is the risk of making your location available worth the benefits of making your location available? Q20. How useful would it be for you to be able to share your location with other organizations?

22. Location Sharing with Organizations: Concern is Highand Perceived Usefulness is Low Concerns about location sharing and who controls that information is highest in the US and lowest in Japan. On average, 92% feel that sharing their location with another organization would not be useful. Usefulness of location sharing with others is extremely low across all countries studied. Q22. Concern about which Orgs have access to your location Q23. The risks outweigh the benefits – sharing w/organizations Japan US UK Canada Germany Q16. How useful would it be for you to be able to share your location with other people? Q17. How concerned are you about allowing other people to view your location? Q18. How concerned are you about controlling who has access to your location? Q19. Is the risk of making your location available worth the benefits of making your location available? Q20. How useful would it be for you to be able to share your location with other organizations?

23. LBS Adoption Focuses On Utilitarian Value Utilitarian LBS services are considered most beneficial and the ones consumers are most likely to use. “Social” LBS will grow more slowly as benefits become evident only after a critical mass of consumers adopt the technology for that use. Those who are more likely to use LBS have lower levels of concern about the dangers (5-10% lower on average). Finding people in emergency Safety/Utility Finding directions Social E-Com Finding offers/coupons Q24. For each of the following statements, please indicate how likely you would be to use location based services in each of these scenarios. Q25. For each of the following statements, please indicate the benefit you would obtain from each situation.

24. Perceptions of LBS Benefits Increase & Concerns Drop after Using LBS Perception of the benefits of LBS increase and concerns about LBS drop among those who’ve used them. Finding directions, food, and entertainment have the biggest increase in perceived benefits. The largest drop in concerns are for theft, security threat and bullying/harassing. Benefit perceptions increase after using LBS Concern declines after using LBS Used LBS Not used LBS Used LBS Not used LBS Q15. How much do the following concern you when sharing your location with other organizations or people? Q25. For each of the following statements, please indicate the benefit you would obtain from each situation.

25. Consumers Are Less Likely to Share Location With Businesses Slightly less than one third report they would likely provide their location to other people. This is highest in the US (35%) and lowest in Germany (26%). Consumers are less likely to share their location information with organizations. Interest in sharing location information with organizations is highest in Japan (34%) and lowest in Canada (15%). Q29. Based on what you know about location based services, how likely are you to actively share your location with other people (friends, family, coworkers, etc.)? Q30. Based on what you know about location based services, how likely are you to actively share your location with other organizations (retailers, other businesses etc.)?

26. The Majority Say They Are Unwilling To Pay For LBS Services $10 US or less is the most popular price point among those willing to pay for LBS services. Willingness to pay under $10 Prefer using free apps Less than $10 US at current exchange rates Q11. How much would you be willing to pay for a location based services application?

27. Almost 1 in 5 Have Seen Retail Ads Based on Location Almost half (46%) have taken an action such as redeeming the coupon offered, or visited the store based on these ads. Canadian respondents are least likely to have done so (36%); US the most likely (55%). 80% consider these advertisements to be very or somewhat valuable, with US respondents being more likely than those from any other country to have expressed this view. Almost 1 in 5 have seen retail ads on mobile device based on your location 80% consider the service very or somewhat valuable 46% who saw ad Q12. Some retailers will use location information to serve customized ads to potential customers based on their location. Have you ever seen an advertisement for a retail store on your mobile phone or web browser that appeared to be based on your location?; Q13. Have you ever taken action such as redeeming the coupon offered, or entered the store that advertised based on these ads?; Q14. Do you find these location-based ads valuable?

28. US & Japan Have Highest Penetration for Retail Ads Based on Location Q12. Have you ever seen an advertisement for a retail store on your mobile phone or web browser that appeared to be based on your location? Q13. Have you ever taken action such as redeeming the coupon offered, or entered the store that advertised based on these ads? Q14. How valuable do you think these types of services are?

29. Appendix

30. Those Likely to Share Location with Other People Likely to share location with other people Not likely Only 31% are likely to share location About 7 out of 10 respondents are not likely to share information with others Overall 25-34 (39%); 35-44 (38%) & Male (35%) 55-64 (77%); 65-74 (76%) & Female (73%) Age & Gender 37% have heard about LBS 79% have not heard about LBS Awareness on LBS Geo-tagging photos (67%); Social networking (65%) LBS used for sharing location GPS Navigation (60%) Frequency of using these services Everyday (80%) Less than once a month (77%) Whether used LBS for sharing location with others Yes (65%) No (77%) Whether seen any ad on Mobile phone based on location Yes (53%) No (74%) Opinion on ad appearing on mobile phone based on location Very valuable (72%) Not very valuable (73%) Usefulness of sharing location with others 89% consider it as not at all useful 76% consider it to be extremely useful Q29. Based on what you know about location based services, how likely are you to actively share your location with other people (friends, family, coworkers, etc.)? S2. Please select your age range; S3. Please select your gender; Q1.Have you heard about technologies that allow you to share information about your location with organizations (service providers, apps providers, retailers, social networking companies etc.) or other people?, For which of the following have you used these services? Q5, How often do you use these location based services? 6. How valuable do you think these types of services are?; How often do you use these location based services?; Q10.. How valuable do you think these types of services are? 16. How useful would it be for you to be able to share your location with other people?

31. Those Likely to Share Location with Organization Likely to share location with other organization Not likely 22% are more likely to actively share information with organizations 78% are not likely at all to share their location with orgnaization Overall 55-64 (88%) and 65-74 (87%); Male (75%); Female (81%) 18-24 (67%); Male (25%) Age & Gender 27% have heard about LBS, however, 45% are very familiar 85% did not hear about LBS, and 89% are not familiar with LBS Awareness & Familiarity with LBS Gaming (55%) & Geo- tagging across Gaming (55%) Get movie show times (62%) LBS used for sharing location Frequency of using these services Everyday (57%) Less than once a month (85%) 49% respondent have used these services to share information of other companies. 84% have not used these services to find where other individuals are Whether used LBS sharing location with others Whether seen any advertisement on Mobile phone based on location 49% respondent have not seen advertisement on Mobile phone based on location 84% have not not seen advertisements on Mobile phone Opinion on advertisements appearing on mobile phone based on location Very valuable (70%) Not very valuable (84%) Q30. Based on what you know about location based services, how likely are you to actively share your location with other organizations (retailers, other businesses etc.)?; S2. Please select your age range; S3. Please select your gender; Q1.Have you heard about technologies that allow you to share information about your location with organizations (service providers, apps providers, retailers, social networking companies etc.) or other people?, For which of the following have you used these services? Q5, How often do you use these location based services? 6. How valuable do you think these types of services are?; How often do you use these location based services?; Q10.. How valuable do you think these types of services are? 16. How useful would it be for you to be able to share your location with other people?

32. Demographics Majority of respondents are from middle and older age groups (35-64 yrs old) and are married.

33. D4. About how many hours per week do you spend using the Internet for personal use [outside of work use]?; D5. How many hours a week do you spend on social networking sites (e.g., Facebook, Twitter etc.)? Demographics Overall, 7 in 10 respondents spend more than 10 hours per week using the internet for personal use. Respondents in Canada, however, spend less time on the internet compared to other markets. 45% less than 3 hours using social networking sites. Interestingly, just over 4 in 10 respondents in Japan are not a member of social networking sites. Number of hours spent using the internet per week Number of hours spent using social networking sites N = 1500 N = 1500

34. Mobile Phone Spend, LBS Willingness To Spend In UK, Germany, and Canada, majority spend less than £55 , less than EURO 75, and less than $75, respectively per month on mobile services. 26% of respondents from US spend $75 - $125 and 23% from Japan spend YEN 6001-10,000 on mobile services. Overall, willingness to spend on location-based services is very low (see “mean” for each country below). MEAN = EURO 1.5 MEAN =$2.6 MEAN = £ 1.9 MEAN = YEN 132.0 MEAN = $1.4 N = 300 N = 300 N = 300 N = 300 N = 300 D6. How much do you personally spend on mobile phone services a month? (Note: If you are part of a “family plan” please estimate how much of that is attributed to you personally.)

35. D7. Please specify your annual household income. Household Income Average Income = $52792.0 Average Income = £31292.1 Average Income = EUR38333.8 N = 300 N = 300 N = 300 Average Income= YEN 589.6 Average Income = $49458.7 N = 300 N = 300

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