Rohan Philips
Aug 9, 2016

Geolocation: An underused opportunity?

Xaxis’ Rohan Philips looks at the promise of location data for brands and shares some tips for getting situated.

Rohan Philips
Rohan Philips

Storytelling in today’s world, where advertisers cannot differentiate people from their phones, has made the job of a marketer much harder. And these challenges extend to the world of digital media.

Historically the ability to measure the effectiveness of online media to offline stores has been extremely limited. But thanks to two key drivers of change, the story will soon be different.

The first is the more scalable yet commonly misunderstood opportunity within mobile location as a signal, and the second is around the use of beacon technology.

Both these opportunities can be leveraged programmatically. In fact, as an advertiser there is no other way to do this effectively. It's important to understand location as a new data source rather than a unicorn that is going to transform media overnight.

Let’s start with location. There are two primary ingredients; GPS is considered by many as the most accurate and reliable source of location signal.

Research firm eMarketer estimates around 65 percent of smartphone users enable location access to one or more apps, which allows advertisers to use the latitude and longitude (lat/long) of a user in real time at a very granular level. Using five decimal points within the lat/long signal, one can even differentiate between trees.

IP addresses, which have been the bedrock of desktop location targeting, still work well when you target cities and countries, but fail miserably when you try to target stores or aisles within the store. And the problem is compounded in markets like China where IP’s are dynamic or the use of VPN is significant.

These two sources are supplemented with a combination of signals from Wi-Fi, Bluetooth and cell-tower metadata to identify a user’s current location or historic behaviour. 

In the last few months, there has been a considerable change in how location data is being leveraged; most location specialists companies have prided themselves in “triangulating” a user on more than one signal such as GPS and cell-tower IP over a period of time and building a large database of user behaviour.

However a recent FTC ruling against inMobi, which found it deceptively tracked the locations of consumers—including children—without their knowledge or consent is perhaps going to change this position.

We are more likely going to see explicit opt-in and opt-out permissions for each of those signals individually along with a more rigid policy on the level of granularity when it comes to leveraging GPS data.

Leveraging location

One thing that is becoming more obvious by the day is the fact that location as signal is going to become an integral part of user segmentation and targeting. However, this raises new questions, such as: How to measure the accuracy of location data? Is location more important than demographic or intent signals?

At Xaxis we view location as a signal that enriches our understanding of a user in our DMP (data management platform) Turbine and not as an isolated strategy.

We recognise that knowing if a user is a male or a female in a supermarket aisle determines brand choices. We know the media being leveraged for the data is as important as the data itself and appreciating an average user has more than three devices is key.

There are a few simple steps to start leveraging the location signal effectively:

  • Becoming an architect and laying out your target 'area' is important. This might be the malls, showrooms or even your competitor's location—yes, this is possible today. If you don’t have a well thought-out target area, real-time location of the user becomes irrelevant.
  • Pay attention to the source of the signal. For instance, if the GPS source is coming from a familiar travel app, chances are that they are more accurate than an app you have never heard of before. The same rule of the desktop world of 'premium sites' applies to the app world.
  • Look at how dynamic and logical the signals are, if a user moved from Sydney to Singapore in an hour, obviously this is inaccurate and more noise than a signal. Real-time DMPs and data scientists have a huge role to play in this step with constant iteration and fine-tuning of algorithms to filter the signal from the noise, without which validating accuracy at scale becomes impossible. 
  • When it comes to execution, the ‘where’ matters. RTB inventory riddled with fraudulent impressions and low viewability is a wasted investment on both the media and data front. Bridging walled gardens such as Google and Facebook is imperative to gain a holistic view of user location and media behaviour.
  • If you are not able to integrate the location signal into your creative or messaging, you could argue that this whole journey of location is pointless. The last mile of making this interaction with the user dynamic and interactive is perhaps an area where our industry in general needs to up its game.
  • The measurement and attribution opportunities are tremendous. Out goes your 'clickthrough rates' or 'site visits' and in comes your 'cost per store visit by user in real time'. Secondary metrics such as directions and reminders on your calendar are great indicators of performance. Ironically, location data becomes less important when it comes to measuring online transactions.  

Finally, I am still very optimistic on beacon technology. Whilst adoption since its launch in 2013 has been below expectations, there are some interesting applications of this technology that are starting to emerge.

For instance the use of beacons at the Sydney Airport not only helps in solving practical problems like bottlenecks at airports but also can be extended to retail shopping at airports.

There is a goldmine of CRM opportunities for advertisers who are willing to take a long-term view and ride the second wave of the beacon opportunity. Location is here to stay, but not as a unicorn but as a signal to improve relevance and effectiveness. 

Rohan Philips is the Asia Pacific VP of products and strategy at Xaxis

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