Location-based marketing is a useful tool to reach customers through contextually appropriate and localised messages. But the success of this strategy depends on the quality of the location signal.
The most reliable type of location data is GPS data (compared to IP data which isn’t quite as accurate). But despite improved performance, just 14% of geotargeted ads use GPS signals, according to a new report from location intelligence company Location Sciences.
Based on the analysis of 500 million digital, location-targeted impressions, the report found that 65% of budgets were wasted on poor-quality and mistargeted location data.
Although the majority of impressions (71%) meet targets specified by a brand, that leaves 29% of missed targets wasting cash.
The study also found that just 60% of suppliers were able to deliver on the location parameters requested by advertisers.
Just 64% of location signals were of good enough quality to deliver in the area advertisers had intended.
Around a third (35%) of suppliers were able to provide signals high enough in quality to reach the target.
Location Sciences found that as transparency and optimisation of location data increases, so do impressions. This opens the door for suppliers and advertisers to lead discussions about how they can improve the quality of location data.
“The Media Rating Council is very clear that IP signals shouldn’t be used for proximity targeting,” said Jason Smith, chief business officer of Location Sciences. “Arguably hotspots and fixed IPs can be used as a good call on location, but most IP signals are estimates or proxies for the location. The key for brands will be having transparency on these work arounds used by suppliers and a method of evaluating the strengths of these signals.”
Fraud is another major concern. Of the 16,000 apps analysed, 36% showed some level of fraud.