How Z-Axis is Set to Level Up Localized Marketing Post-Covid

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As the country and world get back to a new business norm, many businesses are making plans to market their way back to positive sales growth. According to the latest Modern Commerce Monitor report (produced by Localogy), 70% of business owners stated they will be spending significantly more on marketing and promotion within the next six months. Main Street is on the hunt for the tools and providers that will pull them through this crisis and beyond, even as economic and pandemic uncertainty remain.

The margin for error is thin and every dollar counts. Accuracy and precision are top of mind, as advertisers continue to long for reliable data to make the most strategic decisions in their advertising spending, especially in the digital space.

Advertising technology and localized marketing platforms built their business on the use of GPS signals to provide real-world KPIs like foot traffic attribution, allowing businesses large and small to go beyond the click to reach and engage more precise audiences. And while this technology has certainly improved from its early days, it can only go so far without the introduction of another dimension: z-axis.

To put it in perspective, location data and its marketing implications are about to go from Atari to Xbox One. 

How, you ask?

GPS-based location data is simply X and Y coordinates, or longitude and latitude. While these two dimensions have worked for mariners and marketers alike for quite some time, it’s time to set our sights on the skies … well, maybe let’s start with skyscrapers.

For those new to the industry and the concept, the general idea is that z-axis can enhance location data by providing the floor level — or altitude — information. For veterans of the industry, the dream of z-axis integrating with x and y has been a long time coming.  

What are some use cases?

Audience Definition: A female, millennial shopper heads to her favorite store at the local mall. Advertisers have a strong interest in knowing which shops she visits and where she makes purchases. Unfortunately, GPS-based data platforms cannot distinguish the difference between foot traffic for her favorite jewelry store on the second floor and the Dave and Buster’s visitors on the first floor. Our shopper gets lost in the shuffle. For an advertiser, the z-axis is the difference between accurate targeting and unusable data.   

Accurate Retargeting: A consumer is inside a Starbucks on the first floor of an office building. You want to retarget that consumer the next day to get her to come back to Starbucks for her morning coffee. Your data led you to believe she was at Starbucks, but she was actually visiting the lawyer’s office on the fourth floor above the Starbucks. Adding the z-axis provides more context to ensure that advertisers aren’t wasting ad dollars retargeting the wrong person.

Visit Attribution: An advertiser is running an ad on a video streaming service (or OTT) that is designed to drive in-store visits. If the in-store locations happen to be in dense urban areas with multi-story buildings, visits will likely be overreported, as there will be no distinction from the store location on the first floor and office/residential from floors above.  

Multiply this by every mall and mixed-occupancy skyscraper across the country, and you can start to understand the limitations and wasted campaign dollars, and how z-axis floor-level capabilities integrated into x and y can solve it. 

Why is this happening now?

The Federal Communications Committee (FCC) adopted new regulations for wireless carriers which will come into force in April 2021.  The new order mandates that wireless 911 calls include vertical-location, or z-axis, information accurate to plus or minus three meters (which is approximately one floor), relative to the device’s location 80% of the time. Carriers must meet this requirement in the top 25 markets in the U.S. by April 3, 2021.

The use of barometric pressure-sensing smartphones, paired with local weather data sources to determine altitude, has not yet delivered on that promise to enhance location data —until now. The FCC regulations have led to engineering breakthroughs in barometric pressure calculations, which now provide a level of precision never seen before. This opens up unique opportunities for advertisers.

So how does this new view of location data make its way to advertisers?  

As all great technology stories go, it starts with partnerships. Simply put, media and technology platforms sign a bunch of papers, shake hands, exchange some money, and share data. How they use that data will determine how their clients and customers are able to leverage it. The addition of z-axis will usher in greater precision for agencies and marketers and provide for better return on ad spend.  Advertisers need to lean in and ask their agencies or data partners about adding z-axis to their location data capabilities.

Dan Hight is VP/GM of data partnerships at NextNav.