Why Retailers Will Drive the Future of Mobile Location Data
December 14, 2017 | Contributed by: Hilmi Ozguc
While much has been written about the power and promise of mobile location, the greatest challenge in the industry to date has been poor data quality. Study after study has demonstrated that up to 90% of mobile ad inventory has incorrect or imprecise location attached to it, and the majority of location-targeted ads are off by more than half a mile.
Unless something changes, the industry will have a difficult time reaching the $32 billion projected to be spent on location targeted mobile advertising by 2021. Fortunately, something is changing. In fact, an entirely new source for mobile location data is emerging. That source is a growing network of more than 15 million active indoor location signals, which is creating an unprecedented level of data accuracy and putting brick and mortar retailers squarely in control of the mobile location ecosystem.
The power of mobile location
What is it about mobile location that makes it so valuable for marketers and advertisers? In a word: context. Knowing a person’s physical location provides rich context that can be used to drive greater messaging relevance. And every marketer knows that more relevant communications lead to higher performance.
For brands wishing to drive purchase consideration, delivering mobile ads to consumers who are in or near a store that sells their products can help to reduce friction in the consumer purchase journey. And for marketers who wish to develop a deeper understanding of their customers, data generated by a person’s physical world location provides unique insight into that consumer’s needs and preferences.
So, what’s the problem?
The problem is that unless location data is accurate and precise, it has very limited value. There is a huge difference between knowing that a consumer was near a store vs. knowing that a person was in that store or at a particular aisle of the store. Being somewhere near a store provides no insight into a consumer’s intent.
Location data that cannot explicitly verify a person’s presence in a particular store is of little use when it comes to enhancing customer profiles, delivering more targeted and personalized marketing messages, influencing purchase behavior or attributing retail store traffic to online advertising campaigns.
But haven’t we already solved this?
Well, yes and no. Because location data supplied by mobile ad networks and exchanges has historically been unreliable, inconsistent and notoriously inaccurate, an entirely new set of mobile location data vendors has emerged over the past few years. These vendors promised to deliver better data by using specialized mobile app SDKs and GPS signals to identify a user’s location.
Unfortunately the proprietary algorithms and processes that these vendors use to refine the “somewhere nearby” data generated by satellite and cell tower location signals do not address the source of the problem. GPS location data is simply not accurate enough to verify a consumer’s intent. And while “near the store” information might be fine for localizing mobile display ads, without precise verification that a person actually entered a particular store, the results of offline attribution, omnichannel personalization and real-time mobile marketing efforts will be far from ideal.
Where do we go from here?
The real problem of mobile location accuracy won’t be solved with a better algorithm for refining GPS-based location data. Instead of treating the symptoms, what’s needed is a better source for the data. Thankfully, indoor mobile location signals provide just that.
With 100% accuracy and precision down to a few meters, BLE and WiFi signals can be used to generate high fidelity location data that is reliable for not only verifying store visits, but also identifying the specific aisles where a consumer shopped. Additionally, major hardware providers like GE, Phillips, Osram, Cisco, Verifone and others are embedding these signals in light fixtures, WiFi access points and payment terminals. Virtually every major retailer now has or will soon have the ability to generate this location data across their entire network of stores.
With this new source for mobile location data, retailers are finding themselves at the center of the mobile location ecosystem. By generating their own first party location data, they no longer need to rely on third party providers to understand what consumers are doing in the physical world. By controlling access to the location signals in their stores, they can specify the mobile audience partners they wish to work with. And by extending new in-store mobile merchandising opportunities to select brand suppliers, they can enable a new generation of digital shopper marketing in their stores.
Thanks to indoor location signals, retailers will drive the next generation of mobile location, and mobile location may just drive the future of retail. The technology and infrastructure is here. Now it’s up to retailers to make their move.