A Primer On Mobile Location Data

The mobile industry has been talking about the potential of location data for years — and yet, reality has been slow to follow. But now innovations pushed by a host of innovative companies are finally producing creative, interesting results.

How Mobile Location Is Collected

Mobile location data is, very simply, a latitude and longitude coordinate (lat/long) connected to a device’s mobile ad ID, along with a timestamp of when the data was collected. But how that lat/long is derived is less straight-forward and has a major impact on the two factors by which the quality of location data is judged — accuracy, how well the data matches where the user really is, and precision, how small of an area a user can be pinned to.

  • Weak: Historically location was collected by triangulating on the the cell towers a user was hitting. Although some location data is still collected this way, it is described as coarse and is considered to be poor in both accuracy and precision. Location derived from a user’s IP address suffers a similar problem. Data collected via these methods has less application for real-world uses.
  • Good: Location collected from a device’s GPS is considered fine and delivers good accuracy and precision, typically capable of placing a user within a particular building (such as a store). Even here, though, it’s important to understand where the GPS data is coming from; data directly from apps is more reliable than data harvested from the bidstream, where fraudulent lat/longs are often delivered in an attempt to game CPMs.
  • Strong: An emerging location collection method uses uses the wi-fi and bluetooth sensors on mobile devices to uncover proximity to wi-fi or beacon devices. Once the location of these devices is mapped, it delivers a highly accurate picture of where a user has been.

Most apps collect this data when a user opens the app up to use a location-specific feature like a map or a search for nearby deals — this is called foreground collection. Some apps collect location data in the background throughout the day; a coupon app, for example, might need to know when the user is near a store so that it can deliver a relevant coupon.

Privacy is an important consideration in collecting location, and it requires both a clear reason for collecting the data plus an extra level of permission from the user. However, a recent study showed that users are generally willing to share their location with apps as long as it will deliver real functionality, like contextual alerts, location-relevant guides and maps, or coupons and discounts.

How Mobile Location Is Used

Many advertisers think that location is used primarily for geo-fencing and geo-conquesting — delivering deals, coupons, or sales messages in real time when a customer is near your store or a competitor’s. However, the truth is that location data has some shelf life and there are many creative ways it can be used. Here are some typical use cases:

  1. Creating location based audiences: You can use location to find shoppers of a particular store, people who attend sports games, urban commuters, or frequent travelers. Urban Outfitters used demographic and location data to identify women who frequented nightclubs and bars and sent them offers for fabulous party dresses; it boosted revenue 146%.
  2. Validating advertising with foot traffic: Are your ads driving customers into stores? Analyzing location data can be used to analyze the mobile media buys or creatives that actually drive foot traffic.
  3. Retail analytics: Layering location with other market data can give stores a better understanding of who is coming in, where they came from, and where they go home to.
  4. Urban and retail planning: Location data can be used to plan traffic, parking, and other infrastructure projects and to decide where to focus economic investment.
  5. Analyzing investments: Financial research companies use historical location data in big data models to analyze individual stock and broader financial metrics against the flow of people and traffic. They keep these models under tight watch.

With new location collection methods delivering ever more accuracy and precision plus new ways that the data can be used, it looks like 2017 is finally the year when mobile location data will fulfill its promises.