Not All Location Is Created Equal: How Accurate Location Data Increases Ad Campaign Performance

Nov 20, 2014   

Posted by Schneidermike

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Location and advertising go hand in hand. Location-based data means better targeting for brands, more relevant content for consumers, and optimized eCPMs for publishers....when it’s accurate. But bad data can tarnish the otherwise perfect relationship between advertising and location, and cause advertisers to lose trust in the value of delivering IP-based location for optimal campaign performance.

The Pitfalls of Bad Location Data

Our work with leading adtech companies revealed that 90% of the location data appended to ad inventories is inaccurate. The inaccuracies come from antiquated IP positioning providers who trace ad requests through the Internet to find the hub access point and assign the hub’s latitude and longitude to the IP addresses.             

Most IP providers use a network topology method to generate random latitude and longitude points within broad geographic regions in an attempt to inflate the value of their solution. While country or state-level data may be trustworthy, this low-resolution data prevents ad tech companies from assigning accurate context to their audience - such as demographic information or determining if a user is inside of a venue.

When location providers have limited knowledge of an IP address and estimate its location to a broad block level area or zip code, it is a of waste advertising inventory. For example, advertisers that are trying to target “New Parents” waste their inventory on broad location points that could be segmented and accurately targeted.

This challenge can be brought to life in an example where data management platform, MEDIATA, needed accurate location to build user intelligence and deliver relevant advertising. Like all server-side ad tech platforms, the only consumer location data source MEDIATA can access is IP address. 

Making the assumption that any location is good location proves to be costly for advertisers and a missed opportunity to deliver highly targeted content to their audiences, therefore depleting profitability and performance. Overlooking the accuracy of location data results in advertisers serving the wrong content to the wrong people in the wrong places. Building audience personas with inaccurate location means that advertisers will not truly know their audience and will not be able to provide relevant and timely content.

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The Promise of Location-Driven Profit With Precise Location

Exact location yields an increase in the effectiveness of programmatic bidding algorithms and the value of ad inventories by reaching consumers where and when they are in decision-making mode. Tagging inventory with enriched location data like user behavior along with exact location adds a new layer of meaning to ad units.

MEDIATA tested Skyhook’s technology against other leading IP providers who use network topology methods to trace ad requests. They partnered with Skyhook to position IP addresses precisely and to deliver more relevant advertising to consumers based on their location.

Hyperlocal IP, a main feature of Skyhook’s Context Accelerator, takes an empirical approach to location, having accurately positioned over one billion IP addresses worldwide. Each time a device requests location, our on-device software prompts device sensors to scan for Wi-Fi, GPS, cell tower and device accelerometer data.

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With each scan, Skyhook returns a precise location and records the IP address, which is automatically included in any communication with our servers. Using a patented hybrid positioning engine, Skyhook’s Precision Location product intelligently combines those sources to deliver hundreds of billions of precise latitude, longitudes.

Skyhook’s Context Hyperlocal IP allowed them to offer brands highly-granular geo-targeting with precision as fine as 100 meters based purely on IP address for devices on Wi-Fi networks. Adding precise location to user profile data is a major step forward for brands seeking to reap the benefits of precision audience targeting at scale.

Through a 9-month research and development partnership, MEDIATA saw a stunning 20% campaign lift as a result of adding Skyhook’s Hyperlocal IP to its mobile ad inventory.

“MEDIATA’s results prove the hypothesis that hyperlocal targeting drastically improves the signal of content,” said Kipp Jones, SVP of Product and Engineering for Skyhook. 

“Teaming up with the world’s leading location positioning company has already demonstrated very significant improvement in not only campaign performance, but also our audience intelligence.” said John Stones, Head of Product and Innovation for MEDIATA.

Skyhook’s Context Accelerator creates a contextual understanding of users based on location data, allowing our customers to deliver personalized, relevant content and dynamic experiences to mobile users. Skyhook transforms location from a simple latitude and longitude to an essential, actionable data layer of context that helps our customers understand users while respecting their privacy. We made Context Accelerator easy to incorporate into any development stack to leverage the power of our first party location network made up of billions of access points, processing hundreds of billions of location requests.personas_streetscene2

why not all location is created equal for ad tech: whitepaper download

Topics: Advertising