As Andreessen Horowitz partner Benedict Evans once put it, “Mobile is eating the world.” And location is to mobile what visuals were to television: it’s the single most differentiating characteristic of mobile devices versus their predecessor, the desktop.
For marketers, location provides valuable insight into consumers’ context as well as real-time data signals for hyper-relevant targeting. That’s why location continues to be a crucial component of mobile marketing strategy.
Marketers and agencies are increasingly turning to location data to deliver smarter targeting, holistic measurement, consumer insights, and more. But how, exactly? And are they satisfied with the outcome of location based initiatives? What are the most common concerns they face when using location data?
To answer these questions and more, Factual partnered with Ad Age to survey advertising agency and brand marketing professionals about their use and perceptions of location data. The research, titled “Why Quality Matters: Location Data for Mobile Advertising Is Only as Good as its Source” is available for download today.
Here are a few key takeaways from the research:
Marketers and agencies continue to increase their investment in both mobile and mobile location data. Survey respondents indicated they plan to increase location data budgets by more than 25% in 2018.
Targeting is the most common use case for location data, while basic geotargeting (i.e., targeting by country, region, DMP, or zip level) is both the most familiar and the most commonly used targeting tactic. Over 73% of respondents currently use basic geotargeting.
Perhaps surprisingly, location based audience targeting is the second most commonly used tactic –– even surpassing real-time geofencing. Audience targeting also received the highest satisfaction ratings of all location based targeting tactics.
Targeting may be the top use case for location data today, but that may not always be the case. When respondents were asked how they plan to employ location data in 2018, an interesting story emerged: more sophisticated use cases like consumer insights and closed-loop measurement are growing.
59% of respondents plan to use insights derived from location data to inform their business strategy in 2018. While 47% of respondents plan to use location data to measure the effectiveness of campaigns at driving offline store visitation.
Most respondents (67%) cite conversion rates as the top key performance indicator (KPI) by which they measure campaigns, followed by leads generated (56.5%), click through rate (CTR) and cost per click (CPC) (55.1%). However, in-store sales ranked very low –– at less than 3%.
Since the vast majority of sales still occur offline, this highlights an important gap in most marketers’ performance reporting.
As found in previous research, data quality and transparency are marketers’ top two concerns regarding location data. More than 80% of respondents indicated that data quality was their single most important consideration when using location data for targeting.
Not only do respondents care about quality, but the majority view it as a serious problem: 58% of respondents viewed the current quality of mobile location as “very/extremely problematic.”
Marketers and agencies are also concerned about transparency, with 55% of respondents rating that the degree of transparency currently available for mobile location data as “very/extremely problematic.” Specifically, more than 75% of respondents want to know how data quality is validated. Most (68%) also want to understand how location based audiences are defined and built, and more than 66% want to know the original source of the data.
We encourage marketers and agencies to expect transparency from data providers and ask questions to help validate data quality, because the effectiveness of any location based marketing initiative is directly correlated with the quality of the underlying location data.
Here are five tips to reference when evaluating location data providers:
Know the Source - When considering location data, understand where the location data comes from and how it’s being cleansed and processed.
More Than Just a Location - Location data is not just “data about a location.” It encompasses both data about the mobile device user, and data about the surrounding world –– or places data. You should understand the how both of these types of data are sourced, cleansed, and validated.
Understand How Place Is Attributed - Seek to understand the methodology used to bring mobile device user and place together, in order to attribute a user visit to a specific place.
Keep it Fresh - Businesses open and close often. Ask your data provider how often their places data is updated to accurately reflect these real-world changes.
Go Global - Consider the global nature of data. It’s important to think of consumers globally, not just in the United States.