Peter Koeppel, Founder and President of Koeppel Direct, takes a look at the problems and promise of location-driven data.
From an information standpoint, it is certainly an amazing time to be in marketing, and especially in direct response marketing. Omnichannel has opened up marketing options that we could have never imagined even a few years ago, and it is getting easier and easier to find out exactly who is seeing marketing messages and where they are located. It almost seems like it is too good to be true to have so much incredibly accurate demographic information at our fingertips.
Unfortunately, right now location-driven data is not as perfect as we would like. In fact, it is fraught with problems that are still preventing it from being the tool that both advertisers and customers really want it to be. Sure, we dream of pushing ads for phone upgrades to AT&T customers when they are entering an AT&T wireless office, but the truth is that we’re still working the bugs out of location-driven data.
Barriers to Location Driven Data Success
Some of the challenges with location-driven data come from the data providers themselves, and some of from the way programmers choose to interpret or utilize the data they are provided. In addition, Smartphones, which are at the heart of location-driven data, cannot always be counted on to function properly. Along with these common technical problems, we are seeing an increase in fraudulent data complicating the already difficult puzzle that is capturing location-based data.
A world where coupons appear on a user’s mobile device as soon as they enter a store is possible, but we have a lot of barriers to overcome, including:
Rounding errors. Believe it or not, rounding errors are some of the most common problems with locating mobile users. If the data sent to the programmatic software tells us that someone is located at 40.7577 degrees North, 73.9857 degrees West, we know they are standing in the middle of Times Square. Truncate or round the data, though, and suddenly we believe they are at 40.76 N, 73.99 W — nearly two blocks down the street. In tightly packed urban areas, this is enough leeway for serious errors in direct response marketing delivery.
Bad software assumptions. The same problems that occur when software rounds GPS coordinates happen when programmers make bad assumptions about customer behavior. Even though it is generally done to save battery life, identifying users when they are simply approaching a retail location is an ineffective way to deal with location-based data. Customers might simply be driving by to visit the store next door or around the block, with no interest in the targeted marketing in front of them. Instead of providing them with useful information they will welcome, they are instead annoyed and form negative associations with the brand.
Miscoded access points. Unfortunately, there are still a lot of issues with access point identification codes. Too often coordinates get transposed or towers and hotspots are coded far from their actual locations. When a cell tower in the middle of Kansas farmland is suddenly getting more mobile traffic than those in major metro areas, it is difficult to be confident that your location-based data is as accurate as it could be.
Fraud. Plain and simple, fraudsters are trying to increase the income they are generating off of impressions, regardless of the damage they are doing to companies looking to honestly take advantage of location-driven data technology. As these tricksters game the system more and more, they will drive down the value of location-based marketing efforts for legitimate brands.
Data impurity: Let’s not overlook another major problem destroying the incredible potential of location driven direct marketing: data impurity. When you cannot be sure that the coordinates you have are actually correct, it can quickly destroy the industry’s opinion of the technology. Steps have to be taken to ensure that the location information that passes through various networks remains intact. Rounding errors, approximate location information and miscoded access points have to be corrected so that marketers can deliver their messages to the people who want them.
Finding New Ways to Value Location-Driven Direct Marketing
There are several ways location-driven data can be improved to make it into the tool it was always meant to be. First and foremost, fraud must be flushed out by taking advantage of independent third-party companies that specialize in fraud monitoring — these companies already have the skills and equipment required to sort out legitimate views from those meant only to defraud.
Location-driven data is still an untamed wilderness of direct response marketing. If we tend to our data more carefully and, in doing so, weed out those bad apples seeking to undermine it all for their own gain, the potential could be almost unlimited. Marketers have remade the world with technology before, and location-driven data is the next step in that evolution if we have the strength to tame it.