Location-Based Mobile Advertising:
Have you ever thought about location-based ads for mobile users? As mobile ad spending continues to grow it is, “expected to hit $42 billion in 2018 in the U.S. alone” (Business Insider.) Mobile ad revenues, including real-time bidding (RTB), will account for 43% of US mobile ad revenue by 2018. We knew mobile advertising was going to explode over the next decade, but these numbers are just amazing. The number one contributor to the mobile advertising game is Google. Today, Google still owns 90% of mobile ad spend, but players like Facebook and Twitter are quickly getting into the game.
Let’s look at some recent studies on location-based advertising. Thinknear, a company specializing in mobile advertising recently conducted a study. They found that location data from devices has the all-time lowest percentage of accuracy. The lowest percentage since they began compiling their data in 2014. They have found “32% of real-time location data passed by publisher and exchanges was accurate within 100 meters.” That means that almost 70% of location data is not really accurate.
Actually, when you break it down by a study like this, less than half of location data is accurate. That is mindblowing to someone like me who uses targeting tools for ads across many social and web-based platforms. How can I ask my clients to buy into something that I have a hard time tracking accurate results from? I had to look into this issue further.
What Contributes to Location Data Accuracy?
- Mobile Reach: The location data from cell phones is determined by moving locations. Your ability to be “located” can be left up to your user settings in your phone. You can test this yourself. If you have a feature on your phone that will “locate” your phone, often times it will only be able to tell you the location based on the cell phone tower your phone is currently using. Many people find that their location is off by several blocks, or even miles depending on the applications running on your phone and if you are connected to a wifi network. It also depends on if you are using 3G-4G coverage from your cellular provider.
- Static IP Addresses; Stationary computers plugged into modems are assigned IP addresses that are trackable. However, IP-based data is some of the easiest to acquire you simply get assigned an address from the provider you pay to get online with. No user interaction is required for the IP address to be obtained. It can only be mapped to with a high degree of accuracy at a state or local level.
What Does this Mean for Location-Based Ads?
Advertisers who are trying to target specific geographic audiences must consider the variances in mobile and desktop targeting. There are no global standards on how providers gather and update location data. Business targeting local consumers only, your ability to track through IP addresses is going to be more accurate than mobile ads. The platforms used for advertising do not have a standard way to identify locations. Currently, location is assumed by the ad systems. If you are targeting these types of ads, you have to limit your expectations for location accuracy.
Beware of “Cached” Location Data:
There are truly no standard ways for location data to be obtained. When it comes to cached location data, you have no way of knowing how recently the data was mapped. After all, there is no universal standard for “refreshing” the location data across different user platforms. Since a user often only has to register location one time, the data can be off. Consider this: a user registers their device in one location then moved, entered the wrong zip code, or phone number entirely. Many publishers identify location data by where something was registered. What happens when the user changes that equation? Currently, there is no standard way for location information to be updated. It is important to understand these types of limitations with programs that use this type of data to target your audience.
Over the next few years will continue to see the shift to mobile devices like phones and tablets. We will see changes to the way that location data is acquired, analyzed and used for advertising. Advertisers will work to improve the accuracy of how they obtain the data. Developers will work to standardize how that data is analyzed. It will happen because advertisers will require that the accuracy of the information be improved if the industry. It will be interesting to watch what happens wth the larger players like Google and Facebook will do to improve the quality of their location-based ads as they compete for their own market shares.