Report: Location-Enabled Ad Inventory Grows but Location Accuracy Declines
February 4, 2015 | Contributed by: Greg Sterling
Location-based mobile advertising platform Thinknear released its Q4 Location Score Index, finding that mobile-location data has improved slightly over time but is still not accurate enough to deliver on the grand promises of mobile-location based marketing. Last quarter there was an overall location accuracy decrease of 7 percent compared with Q3 2014.
The data come from “location accuracy tests on more than 500,000 consumer ad experiences during the quarter.”
Thinknear’s location score measures the gap between passed or identified user location, delivered in the ad request, and actual user location. The company says that while overall location accuracy has declined, location-enabled mobile ad inventory continues to grow. Indeed, this is the casual source of the decline. Thinknear’s report says, “Our research indicates the majority of the decrease in Location Score was driven by new apps added to the programmatic space.”
Social apps had the highest location accuracy of 32 app categories measured, according to Thinknear.
Regional accuracy showed the most improvement vs. Q3 2014, while hyper-local accuracy — passed location was accurate within 100 meters of the user’s actual location — showed the highest accuracy percentage of any of the measured categories. Yet the latter declined nearly 10 points compared to Q3 2014.
It’s worth noting that none of these location-targeting categories saw accuracy rates above 40%. What that means is that 60% of the location-targeted impressions were off and not delivered as intended by advertisers. Thinknear says the growth of the programmatic ecosystem is to blame and that developers are “not placing an emphasis on ‘getting data right’ or are playing ‘fast and loose’ with location data to capture higher monetization rates.”
The company also points out that location is much less accurate on the mobile web (vs. apps), which is often still based on IP-based targeting.
What’s at stake with good or poor location in mobile ads? As others, such as xAd and NinthDecimal, have shown better and more accurate location improves consumer response rates. Thinknear said that based on 27 test ad campaigns it recently ran across a number of vertical categories, there was a “25% lift in CTRs and an 81% lift in conversion rates.”