Location Data Fireside Chat with CPO Andy Schrader: Five Questions to Ask When Shopping for Location-Based Marketing Software

Location data is valuable only when it’s reliable and scalable. Being able to target coffee drinkers who have been inside a Starbucks: very valuable. Trying to target coffee drinkers who have walked past a Starbucks: not so valuable. To ensure your agency or brand gets the best quality location data, ask these questions. 

1. Is the location database what I need?

Does the location database, also called a point-of-interest (POI) database, in the solution you are considering include the locations you care about? The POI database usually doesn’t come to mind when thinking about the quality of la/lon data collected from mobile phones. But without a POI database to decipher the latitude and longitude signals you don’t have a set of locations to target or report on.

Some location data software specializes in certain types of businesses, so you want to make sure the locations most important to you are included or can be added. A provider may have all 14,000+ McDonald’s locations in the US in their database, but may lack auto dealerships. If you work with automotive companies, that provider is not a good fit for your business.  When shopping, you should confirm your locations already exist in the database, or if they can be added. If they can be added, ask how easy it is to do that.

But that’s just that first part of the question. Location data can be accurately gathered from mobile devices, but does the software you are considering match that GPS signal or event precisely enough to fit your needs? If the POI is not accurate, your data will not be meaningful or you may pay for more mobile ad IDs than you need. Ask the software vendor if they use radii or polygons for place matching. For example, a 100 yard radius around a Starbucks will deliver devices seen walking by or visiting neighboring stores.  In this case, the latitude and longitude received from the device would be accurate, but the place is incorrect. That’s how you end up with an audience that includes people with no interest in coffee.

Be sure to ask the software vendor if you can create your own polygons. You may want the visitors to three buildings during an event or to include the parking lots outside of a football stadium. The ability to build custom polygons can support your efforts in acquiring a more accurate audience.   

2. Do you work with my DSP?

Agencies and brands have preferred ad platforms and adtech partners, from Facebook to Centro to Adsquare and everything in between. You’ll want to ensure that the location-based audience data the software makes available to you can be easily pushed into your preferred demand-side platform (DSP).

The first question you have to ask: Does the DSP I am currently working with accept third party location data?  If it does, then make sure the software plays nicely with that DSP. The final thing to consider is the match rate between the mobile device IDs the software delivers and the DSP. 

If you do not use a DSP and advertise just on social media, make sure the location-based audience data can be exported from the software and uploaded to the ad platform of your choice. If the data is stuck in the system and the software does not let you get it out, look for different location-based marketing software. 

3. Where does the location data come from?

Location data can be collected from several sources, some more accurate and trustworthy than others. In-app GPS data is the most accurate. Location data providers sometimes use the IP address, WiFi or, worst of all, bidstream data. Roughly 90% of bidstream data is inaccurate. Find out the source of the location data you’ll be getting out of the software.     

4. Are you compliant with current privacy laws and standards?

You would have to be living under a rock to not have heard the buzz in regards to concerns and changes to consumer data privacy. Though location data is pseudo-anonymous, it is still under some amount of scrutiny. This is a good thing. With the implementation of CCPA in California and GDPR in the EU, as well as ethical practices and standards, it is imperative your location data provider is privacy compliant. There are a handful of organizations that set the standard for privacy compliance in the absence of federal regulations. (Stay tuned.) The NAI, IAB and the Future Privacy Forum are all excellent regulatory bodies that your location data provider should be a member of.

5. How can I be an impartial judge of accuracy? 

To judge the accuracy of location data, you can compare audience sizes accessible in the software to known foot traffic. For example, you can compare the number of mobile devices seen, which correlates to location-based audience size, to the publicly reported number of attendees to an event, or to the foot traffic counted in your store. While no location-based marketing software will be able to provide you with all of the visitors to a location (think children, people with no phone, people who have opted out of location services, etc.), comparing the two figures allows you to gauge accuracy. The best location-based marketing software will typically provide 5-10 percent of the total visitors. You can consider 5 percent to be an actionable threshold of devices. If the software gives you less than 3 percent, keep shopping.

Get a free foot traffic analytics report showing you visitors to the location of your choice. Included in the report:

• Repeat visitors and visit frequency
• Competitive locations visited
• Heatmaps of home/work location for the audience
• Foot traffic trends over time