Taking the Pulse of the Location Data Ecosystem

Companies selling location and proximity data and services themselves concede that it’s a pretty small market, but that location data is an increasingly critical signal for a variety of marketing, operations, and product features well beyond mobile advertising. Street Fight surveys confirm that location data is attracting lots of interest from local marketers, even as spending and deployment are still nascent.

I moderated a panel at a half-day event on local data last week which was hosted by Unacast, a company that aggregates location and proximity data for marketing platform providers. It was a good opportunity to catch up on industry trends and anxieties. I’ll sketch out some of the prominent themes from the conference, many of which have been consistent for the last 12 to 18 months. But momentum is definitely building.

The Location Data Ecosystem. Participants conclude there are very few companies that can gain useful insights or apply raw local data, so adoption growth is dependent on packaging, platforms, and applications. SafeGraph, one of the raw data providers, claimed it had lowered prices on a monthly basis to expand the market, and several panelists thought that AI – for relatively easy pattern-matching sooner than predictive capabilities or self-learning – would also move things along. With a still-fragmented location data supply chain, there was some expectation of relatively near-term consolidation, likely through acquisitions that could bring new new players into the space. Many observers are wary of publishers and other media sellers buying up location data players for fear of a “grading their own homework” threat during increasingly prevalent attribution analysis. That kind of thinking could apply to Verizon, Google, and Facebook, let alone Snap, that acquired Placed in June. Speaking of Facebook, while several participants said the social network giant had no location data play, a couple of others are expecting some big developments sooner rather than later. And although Apple recently scaled back a plan for iOS 11 to tattle to users whenever apps tracked a user’s location, most of the attendees think that feature will be back in future releases, which they expect will panic users and make smartphone data collection more difficult.

Use Cases for Location Data. Early users of location data applied it to geo-targeted mobile advertising, which hasn’t proliferated rapidly. Street Fight’s 2017 survey of enterprise local marketers confirms that only a quarter use geo-targeting regularly. But these days, companies are applying location and proximity data to tasks like online-to-offline marketing attribution and audience modeling. And media companies are starting to personalize their mobile content and apps, rather than just using location data for ad-targeting. Seemingly everybody mentioned hedge funds looking for signals, and a few talked about self-driving cars as data consumers.

Quality, Accuracy, and Transparency. In order to reach scale for big ad campaigns, data providers often make use of the bid-stream of ad request information from mobile devices on ad exchanges. This data is universally regarded as low-quality or even fraudulent. As my Street Fight colleague Stephanie Miles pointed out, just as online display ad viewability is plaguing that market, location data quality is the scourge of this one. Many participants believe that, in addition to filtering out bad data, being totally transparent about sourcing and accuracy rates can only increase adoption. After all, reach can be more important than accuracy for some marketing programs, e.g., less-accurate GPS data can still be useful for re-targeting, even if it’s insufficient for proper attribution analysis. Unacast introduced an initiative for scoring the confidence level of different data sources and types, and it hopes to give feedback to data suppliers on how they can improve or fit in, as well as to buyers. 

Geo-targeting is just getting started by big brands and multi-location retailers. According to Street Fight’s latest survey, 17% of them collect location data in service of their local marketing efforts. At the same time, as shown above, location data and mobile push offerings that could be powered by it top the list of new technologies those marketers are interested in exploring. We took a look at the early adopters, those that collect location data, to identify what other marketing approaches characterize them:

• They’re not the biggest companies among our survey respondents – telecom and technology sellers are over-represented, vs. retail – but they’re increasing the local mix of their digital budgets aggressively. A higher-than-average percentage of them are increasing spending across the board on digital tactics, including email and local sites (69% each), online display and social media (64% each) and mobile (57%).
• So far, they’re using geo-targeting at about the same rate as other enterprise local marketers, so they’re applying that data to some of the other objectives mentioned. Plus they’re far more likely to deploy location data along with other types across multiple campaigns. Twice as many of them are interested in real-time location data, although they’re average in their interest in mobile push.
• Their customer service department or IT group often is the owner of that data. Marketing technology and budget decision-making tends to be a joint effort between headquarters and local or regional management. They’re a little more distributed in that regard than most enterprise local marketers.
• There’s some evidence to suggest that location data collection correlates with success at different marketing objectives, particularly towards the bottom of the marketing funnel (upselling, customer retention, customer support).
• They’re heavy users of third-party data management platforms (DMPs), and they’re more than twice as likely to use multi-touch attribution techniques. At the same time, they’re more likely than most to cite managing multiple sources of data as their most difficult digital marketing challenge. 

These early adopters of location data are great prospects for suppliers of local marketing and commerce technologies. They’re sophisticated in their attribution and audience analysis, yet they have a little trouble with multiple data sources and with managing multiple suppliers. Helping them integrate location data with their other sources of customer and prospect information, and applying it to multi-channel campaigns and attribution should match their hot buttons.

David Card is Street Fight’s director of research.