Location-Based Advertising: What Role Can Publishers Play?

samanthapricesellsiderThe Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Samantha Price, director of ad products for The Weather Company.

In 2001, the Sloan Management Review envisioned a bright future for “m-commerce” and a theoretical young consumer named Tommy.

“His cell phone beeps: It’s a message from the Soda X portal. The Chicago Fire soccer team is playing tonight, and the Guess? store that Tommy is approaching is offering him half-price tickets for the game if he buys a pair of jeans today.”

Back then, the idea of location-based advertising was as hypothetical as flying cars. Today, GPS-enabled mobile devices have made it reality, but it remains surprisingly difficult to do correctly.

For publishers, they not only need a clear value proposition to offer users in exchange for tracking their location, but they also need to do so without harming the battery life of users’ devices. “GPS fixes” vs. “passive location triangulation” have varying location quality and battery life impacts that should be factored into app designs.

The gold standard for location data hinges on users opting in to declare their precise latitude and longitude coordinates. Mobile users, however, are increasingly savvy, recognizing when there is no good reason for sharing sensitive personal data like precise location. iOS 8 notifications increase the awareness of which apps are tracking location on your phone.

As a result, there is an increasing need for publishers to provide the give to get for location data. Is the app content enhanced by precise and current location data? Should app users trust that the app needs their location?

Why Data Quality Is Important

This balance of user impact and accuracy correlates to the quality of the data that is available for ad targeting. Understanding those differences is an important consideration not only for the publisher building an ad-targeting platform, but for the buyer as well. The first question to consider: What location data triggers the delivery of the ad?

The IAB recently published “12 Questions Every Buyer Should Ask about Location Data as a reference for determining the data available from partners. These questions are a great starting point, but this document only offers the questions to ask. What do they mean for delivering a campaign? Is IP address or probabilistic latitude/longitude data narrow enough to achieve useful targeting on mobile? What is the recency of the location data?

Poor-quality location data increases the possibility of misidentifying the user’s location by a mile or more, completely discrediting the target’s validity and wasting ad dollars. Realizing the bright future of m-commerce and reducing waste depends on validity of targeting data. On the other hand, disregard the “benefits” of latitude/longitude decimals beyond six places, which is worth about four inches. Beyond that, you’re splitting atoms.

Achieving Scale

With precise location targeting, scale can be a challenge. Enter the promise of the ad networks. Here is where we haven’t fully moved toward precision. Few publishers have the location data and scale to deliver targeted ads without participating in the location-sharing ecosystem that networks rely on.

Recent articles have discussed the fidelity of location signals associated with network inventory. If location data is being thrown away because it’s falsified, incomplete or low-quality, scale suffers. However, when quality data exists to build on, scale is made possible by looking at user location over time. A few auto intenders may be at the dealership right now, for example, but many more visited in the last month and can be reached at home, work or on the go.

Weaving In Local Content

Building on the gold standard, publishers that have a location trust relationship with their users can also deliver a connection where local content in the app complements the ad messaging environment. This relationship is associated with user mindset and receptiveness to the marketing message. Will the user be in a passive mindset, killing time while playing a game on their phone? Or will the user be in an engaged planning mindset?

Environment has always been a factor in building a local media mix. The question of the right proximity radius for outdoor messages now translates to digital. The message that you put on a billboard three miles from the store vs. the store signage is now applied with the precision of mobile targeting options.

How do I prove it works? Attribution reporting based on mobile location signals is gaining momentum. But, just as with delivering the marketing message, fidelity of the location signal and user opt-in and consent for tracking location is equally important for proving exposure to an ad drove visits to a store. Did the consumer walk into a Burger King or the McDonald’s next door? It’s simple to see how more precise data is key to ad effectiveness studies, but still tough to ensure you’re getting quality data.

Fifteen years after the turn of the century, it’s exciting to see that old vision of “m-commerce” coming to life. As the supporting ad technology continues to improve, we expect marketers and Tommys alike to reap the benefits. Publishers can provide closed loop reporting to prove it.

Follow The Weather Company (@weatherchannel) and AdExchanger (@adexchanger) on Twitter.

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