Until We Fix Location Data Inaccuracy, We Will Never Close the Mobile Spending Gap

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Ocean Fine, vice president of agency and strategic partnerships at Factual.

The ability to leverage location data – not just to launch targeted advertising campaigns, but to learn about an audience, create rich customer profiles and shape future marketing decisions – is part of what makes mobile so powerful and unique.

The trend had been to leverage location data from location-based networks as part of a media buy. But in the last year or so, a movement started. Marketers are taking a closer look at all of their data and putting a greater onus on data strategy. Although they are moving away from a bundled approach to location data and media, we’re not quite at the point where most brands feel comfortable buying and using location data on their own as something more than an element of media targeting.

Part of the challenge is that location data is not easy to come by. For brands, collecting location data for their own customers is complicated. They need to develop processes for assessing mobile data throughout their entire ecosystem and have the in-house knowledge or partnerships to make decisions with the data once they have it.

Adding to the challenge, location data is wildly unreliable. Foursquare reports that nearly 80% of location data in its bid stream is inaccurate. For Skyhook Wireless, approximately 90% of location data appended to ad inventory is incorrect. Those stats align with others.

Using inaccurate location data in advertising is really bad, especially since marketers have probably customized their creative based on that faulty location. One of the common scenarios is when advertisers try to buy bulk impressions for a very precise target audience, often as part of a bundled data/media buy. How do they trust the accuracy of their targeting, and ultimately their media dollars, to a media company that is rewarded on scale, rather than accuracy?

Tactics get widened, targeting blended, to fulfill that IO. All of a sudden, the sunscreen company isn’t just targeting people on the beach, but, rather, all of Florida, including the woman stuck working in a high-rise on a Saturday and the nurse who is on her lunch break in a windowless hospital. If that message of safe fun in the sun is eliciting any emotional reaction at all, it is anger.

The Data Learning Curve

Recently, RFPs and RFIs with location data components have evolved immensely in terms of the type of questions they include. It’s not just about whether or not marketers can target a particular audience in a particular place. Buyers are asking how the data is sourced, how accurate it is and if it could fit in with their existing systems. This demonstrates that the marketplace is maturing, but there is still more to be done with education.

People spend more time on their mobile devices than they do on any other device or media channel, but you wouldn’t know by looking at brands’ ad spending. More accurate location data drives more effective mobile marketing campaigns, which should, at least in theory, drive marketers to spend more advertising dollars on mobile.

Location data can also help with another mobile pain point: attribution. Location data is a way to determine whether or not mobile tactics are driving the desired action in the physical world. As brands decouple location data from media and develop processes for using it in their ad tech systems in conjunction with other data sets, such as purchase behavior, they can better assess their marketing. Did someone go to a store after they saw a mobile ad? Did someone see an ad and bypass the store but make a purchase online later? Or – oh no – did they see an ad and visit the competitor?

The tide is definitely turning. You can tell by the types of questions people are asking and industry coverage. Many brands use location data sometimes; no brands, to my knowledge – and I’d love to be wrong – use location data all the time to inform every mobile marketing decision they make.

Follow Factual (@factual) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. The stats around location data are consistent with what I’ve seen. It takes a long time to develop the correct blacklisting technologies to clean out inaccurate data. However, if you have the right techniques to find and utilize the 10-20% of the bid stream data that is highly accurate, it’s possible to create location information useful for targeting and store lift measurement. That being said, it’s also important to measure what really matters, which is sales lift. Full funnel analytics that go all the way from ad exposure through to customer transactions, in a scalable, privacy-safe, way is key to helping advertisers understand how to evaluate and optimize media.