Poor Data Quality Is Hurting Location-Based Campaigns—Here’s How to Fix It

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This post is the latest in our “Targeting Location” series. It’s our editorial focus for the month of March, including topics like location-based ad targeting, attribution, and privacy. See the rest of the series here

Even in the information age, there’s a lot of misinformation about where the data used to power location-based advertising campaigns actually comes from.

As they walk down the path of least resistance, many marketers are still using location information from cell towers to power their location-based campaigns. That’s a grave mistake, according to Warren Zenna. A 20-year veteran of the advertising space, and current president of the Americas at the mobile location intelligence company Location Sciences, Zenna is determined to educate the public on the pitfalls of inaccurate location data and the inherent challenges in pulling location information from cell towers.

We recently chatted with Zenna about how poor data quality is hurting local campaigns, and what can be done to turn things around. Here’s what he had to say.

Q. Given your depth of experience in the advertising world, how would you describe the moment we’re at right now, in terms of location specifically?

A. Location data has a two-prong dilemma—it’s being both being misused and used in the wrong ways.

There is simply no transparency in the location data ecosystem. This leads to a race to the bottom for location quality and location data value. Location data providers, in order to keep the lights on, must fulfill location data demand while maintaining their margins. So they make promises. “Sure, we can deliver that to you at your proposed price.” Clients, on the other hand, are trained to believe that the quality location data necessary to deliver on their campaign targets can be bought for X price, which is, in fact, way less than it actually costs to procure. Hence, the economics drive the value down, forcing lower quality data to be used. There is no transparency in the exchange, so this sort of stuff can persist.

Everyone in the value chain needs to mark everything up, and clients won’t pay the necessary premium to get the good stuff, so targeting is off, quality is low, and money is wasted. High-quality location data is hard to deliver at scale and at the low price clients are willing to pay. But this dysfunctional buying and selling dynamic persists, causing the data to be misused more for financial gain than for a commitment to data accuracy. Location targeting gets a bad name because of this, when in fact, proximity marketing is extremely effective.

Location data is best used as a highly targeted messaging strategy to reach people who are close to — or within — the promotionally relevant location of the ad message. Location data offers the ability to turn universal ads into local ads. Same as local TV. The issue is how location targeting is being executed. People don’t look at ads on their phones when they are out doing things like shopping and driving around. They look at them, sometimes, when they are inactive. Mobile ad creative needs to be better — more engaging and more contextual — and presented when someone is in a contextually relevant mindset.

Q. Why do you see it as a mistake for marketers to use location information from cell towers to power their campaigns?

A. Cell phone tower location data is not very precise — it may, in fact, be considered one of the least precise forms of location data. One reason suppliers provide cell tower data is that data is cheaper than more accurate forms of location data. Simply put, it’s easier to procure and more abundant.

Cell towers by their very nature do not offer highly accurate location data. Their data is only accurate to a little less than a mile. For marketing campaigns that have wide location targeting parameters, this type of data can be sufficient. For more accurate or tighter location proximity parameters, GPS data would be needed to deliver on those requirements. However, in many of those instances, cell phone data is still frequently used in campaigns of this type—mainly due to the economic dynamics of the location data ecosystem.

Brands want to spend X per impression and GPS data is not available at that cost, so cell phone data is used and speciously reported. Cell phone tower data is frequently used to inflate the volume of delivery.

Q. What do you see as the solution, then, if brands want to improve the accuracy of their campaigns?

A. I think that the entire location data industry needs to be a great deal more responsible about what is, in fact, achievable with the use of location data. Incredible promises are being made to unsuspecting brands by suppliers with tales of James Bond-level targeting results and in-store delivery of ads to moms wearing pink sweaters in the aisles of the Walmart on Main Street in Des Moines.

Once marketers become smarter, more educated, and more aware, they can then better understand how location targeting actually works, where it’s most effective—where it’s not—and how to best use and measure it. Also, marketers need to understand how location data is procured and how the results are reported. If this is done, accuracy will go up because expectations will be more in line with deliverable outcomes. Right now, it’s simply too easy for garbage to slip into the system undetected. Once this becomes harder, brands will have more transparency.

Brands themselves need to wake up and understand that the low rates that they have become addicted to cannot be sustainable if the quality of the marketplace improves. They are going to have to be willing to pay more for quality. Punishing the suppliers may seem like a justifiable reaction, but it only hurts the industry if the pricing models force this kind of bad behavior.

Q. What are some of the misconceptions you hear among brand marketers running location-targeted campaigns?

A. I think that some myths have been promulgated about what mobile location targeting can do. For example, one myth is that mobile ads can be delivered to people in stores at the time that they are in the aisle and offer a promo on a product that’s in the store at that time. While this is technically possible — and I say technically with some latitude — it will virtually never happen. People do not use their phones or interact with ads in this manner. And even if two or three people actually do this, that is not a scalable result by any stretch of the imagination. It’s a silly promise and one that I hear a lot in today’s sales pitches.

I also know that people, not just marketers, have this belief that ‘surveillance marketing’ is a global spy network, peeping into people’s personal stuff and snooping on their private lives. While this is possible — governments have the means to target a person of interest, like a terrorist for example, and pick out and monitor his devices — this is not something that Google, Facebook, or any of these other big tech giants will do. They are in it for money. They just want to send us ads and use our data in exchange for dollars. I am no fan of Facebook or Google, mind you, but I do understand their basic motivations.

Q. Looking forward, how do you see us using location data in campaigns five years from now?

A. GDPR and other regulatory initiatives, as well as verification platforms like Location Sciences, will become more mainstream in the next two years. These factors are going to put pressure on the entire ecosystem to get their stuff together. Brands will be a lot smarter about what they buy, what’s possible and what is not, and suppliers will be forced to deliver more transparency.

Location data will come at a premium, be more expensive and more accurate based on realistic expectations. 5G is going to have higher frequencies and higher bid rates, as well as improved protocols that will make location data even more accurate, which may increase accuracy and in the long run, [and] decrease cost. Overall we will have a much more transparent, smarter, and sober marketplace.

This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.