Originally published at thinktank.personagraph.com.

According to a survey performed by eMarketer.com, mobile location targeted ads receive the highest grade (A-) of all mobile display ads in terms of effectiveness. Needless to say, location is a crucial part of any smart marketers strategy and should therefore be part of yours! As an app developer, the possibilities location data provides are enormous. We’ll discuss three areas where location services can contribute to your app’s success: features, acquisition, monetization.

Features

A user’s location can be used for many useful services. Just think about apps like Uber and Lyft, Yelp, GrubHub, Nike+, Glympse and of course countless map apps such as Google Maps. These apps locate a user so that they can provide a super convenient service to them. Although these kind of apps rely almost completely on location there are more subtle ways to use location data to your advantage. An app can be personalized to show location relevant content. For example, a news app can show a user local news more prominently and show the local weather forecast. Or an e-commerce app (m-commerce) can show popular products in a user’s region, or in contrast, filter out products that are not available. Game apps can use location to let users that are closeby challenge each other. Location relevant push notifications can provide users with convenient updates. One of the most creative uses of location data is Snapchat’s creation of Our Story. There numerous examples of how app developers utilize location data to make life better for their users. And if there’s one thing people love, it’s apps that save time and provide a convenient and frictionless service. Developers that successfully build such an app can experience enormous success, as the examples mentioned above illustrate. Given that major app stores have hundreds of thousands of apps, making your app stand out from the crowd is essential for success.

In the (near) future, the mass adoption of wearables will further increase the importance of having location data. You can customize your app to run seeminglessly on Android Wear. Also, since Google Now is a prominent app for this wearable OS, integrating your services with Now can deliver extra value to your users. Of course not every type of app has use for location data in its features. However, location data is always useful for marketing purposes.

Acquisition

User acquisition is a serious pain point among app developers. “Build it and they will come” has long proven to be terrible advice. To acquire users, modern developers turn to the world of marketing and advertising. The key to successful marketing is to know your audience, something Personagraphexcels in. Location plays a big part in knowing your users. By combining location data with information about your most valuable users (biggest spenders, ad clickers, etc.) you can uncover where you’ll most likely find this cohort. With these insights, you can start focusing on acquiring more of these users in that region. There are many free methods you can deploy regionally but paid channels are better equipped to focus your user acquisition activities in specific areas. This highly specified segment can drastically increase your ROI on advertising expenditures. First, you acquired users that are most valuable for your app. Second, by advertising locally you can outbid competitors while still bidding a lower price for ad inventory compared to national campaigns. To summarize, acquisition campaigns become more efficient and more effective with location data.

Monetization

As just described, by using location data you can acquire the right type of users. This new influx of users are targeted for their value to your app and should have a higher average Lifetime Value (LTV). What results is that you can monetize your app better both through an increase in quantity as through an increase in quality of users. If you monetize your app by selling in-app ad inventory, having location data can greatly improve your CPM. Just like you were able to smartly outbid a competitor in your acquisition campaigns based on the right insights, an advertiser is willing to spend more for your highly specified ad inventory. Also, users that are served a highly local and relevant ad will be more inclined to click through. This higher CTR will increase your ad revenues.

What will the future hold?

So far we’ve only discussed location data in the absolute sense, such as where a person is expressed in latitude and longitude. The future will bring relative location data that works indoors. Currently, companies that are using iBeacon are popping up. iBeacon allows for communication with smartphones that is triggered by proximity cues. This could provide data about where a person is standing relative to a product she may like for example. Keeping an eye on and responding to these sort of developments will keep your app on the front line of trends and innovation.