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Today’s column is written by Alex Linde, senior vice president of monetization at The Weather Company.
Mobile can sometimes feel like two steps forward and one step back.
On the plus side, vendors have promised location-based advertising on mobile since 1999, and just a short 15 years later, pretty much everything that marketers imagined is possible.
It is, however, a fragile thing. We’ve heard about the sketchy nature of the GPS data in the mobile exchanges, and the IAB recently released an excellent list of questions that any marketer should ask to make more informed decisions about their choice of location partner. And there are broader currents that we should be aware of that may yet shape the success of this fledgling market.
Foreground Vs. Background Location
Understanding the context in which the data is gathered is key. Most providers currently take their data from ad exchanges, and most impressions in ad exchanges come from games. By definition then, the location data is gathered when the game is in the foreground – when the game is on screen and the consumer is engaged – otherwise ad impressions would not be generated. What this means is that the marketer looking to reach consumers who have visited an auto lot has slim pickings. Consumers shopping for cars are not likely to be playing Candy Crush while deciding on life's second-largest purchase.
On the plus side, what this type of location does tell you is where a consumer is when they’re bored, such as at home, killing time at work or commuting. This is of course a great opportunity to optimize a campaign by only reaching consumers within traveling distance of a physical location. In addition, it gives sociodemographic insight and likely a window into their dining preferences and more.
Then there are companies that have background location, which is normally where a publisher or app provider captures location as part of the service they provide to consumers. These companies know the value of their data and keep it close. It can be used to build much more detailed profiles and is usually sold direct. Savvy marketers understand the difference and seek out this type of high-quality data. An interesting variation on this model is an opt-in panel such as Placed, where consumers are incentivized to share their background location, which is then anonymously used to let marketers know how successful their mobile campaigns are at driving foot traffic to a store.
An indicator of how valuable this data is would be the rapid growth in apps that prompt for location – even as a tangential feature.
It’s fair to say that many in the location space are nervous about the possibility of heavy-handed regulation. With that being said, publishers and others in the data space need to examine their data practices and make sure they are treating consumers with respect. Do people using a particular game or chat app recall the box that popped up to use location? If they tapped “allow,” do they understand that their precise GPS location may be sent to someone other than the provider of said game or chat app? Do they know that an unnamed third party may, through an ad exchange, be building a detailed profile of their movements? I like to ask whether a consumer would “reasonably expect” their data to be used in this way. I think it’s clear to say that the answer is no.
Luckily for the industry, the platform providers and larger players have the power to exercise self-control. For example, the new version of iOS has new prompts that tell a user that an app wishes to use background vs. foreground location, and even reminds users every few days that the app “has been using your location in the background. Do you want to continue allowing this?”
In addition to the platforms themselves, the exchanges can help. Google, for example, is not sending precise coordinates, but is splitting the globe into polygons where each cell contains a minimum of 1,000 devices. That is more than accurate enough to optimize against people who could visit a store, but prevents third parties from identifying a consumer’s home address or tracking their movements to individual stores.
This type of self-regulation is a great thing for the industry. It doesn’t prevent publishers that have a strong relationship and value proposition from collecting precise location, but if adopted widely, it does mean that consumers can trust that their personal location data is safe.