What Marketers Need to Know About Location-Based Advertising and Where It’s Headed

6 experts from brands and agencies weighed in over Slack

Headshot of Lauren Johnson

Marketers have long envisioned a world where millions of people walking by a Starbucks store on a hot day are served an offer for an ice-cold coffee while browsing a website on their smartphone. That scenario, by and large, hasn’t worked out for brands so far due to complexities in ad targeting, challenges around reaching a sizable audience and questions about the accuracy of the location-based firms’ data that relies on bits of information pumped through technology platforms.
Still, there’s a lot of money to be made in location-based advertising. According to research firm BIA/Kelsey, U.S. marketers are poised to spend more than $16 billion on targeted mobile ads this year, reaching $20.6 billion in 2018. What’s more, brands are beginning to invest in location insights outside of advertising and into the burgeoning world of mar tech, where reams of data inform everything from what people are buying and how often they purchase to planning exactly where stores should open.
To dissect the ins and outs of what’s working, what needs fixing and where location marketing is headed, Adweek assembled a panel of six marketers from brands and agencies to hash out the issues for one hour via workplace messaging app Slack. Read on to see how the conversation unfolded.

Lauren ? [3:01 PM]: First question: For years, location data has promised marketers granular targeting to hit “the right consumer at the right time.” What are your thoughts about when and how to use location data?
Lisa ? : Location data today has many inaccuracies. We use location data with our retail partners as data points to inform decisions at the individual level.
Location accuracy: Measures how closely a company’s data matches to actual location coordinates in the real world.
Abbey: Location data is the digital bread crumbs of offline activity, so we use it in a variety of ways: for insights, segmentation, targeting, analytics and understanding if we drove people to a desired physical location.
Lizzy: I agree. I think everything is still just estimations. You can’t get 100 percent accuracy at any given time. What we have now is better than five years ago or even a year ago, but it’s not perfect.
Warren ? : Nothing is 100 percent accurate. It’s knowing how to use the data and understanding the sources you rely upon.
Brian: Agreed with @Lisa on inherent inaccuracies with location data currently available today, which is why we typically use geofencing to align HotelTonight’s use cases with people who are more likely to have a need rather than target based on a broad DMA location.
Designated Market Area (DMA): A population in a specific geographical area.
Warren ? : Geofencing is likely the most inaccurate of all location data sources. We rely mostly on first-party, app-based IDFA data.
Geofence: A virtual mapped area used by brands to target messages to people at specific locations.
Identifier for Advertising (IDFA): A piece of location-based code within iPhones used for ad targeting.
Brian: Interesting, why do you say that @Warren? It’s been incredibly successful for HotelTonight.
Warren ? : We use geofencing as part of a holistic solution to derive better data. For example, we can determine the difference between an employee and a consumer. Then we can match that user’s ID to ad calls.
Abbey: We used geofencing for an entertainment client to target people at Comic Con because we knew our show’s audience was there. That data drove activation, audience understanding and future targeting.
Lauren ? [3:06 PM]: Why is location data inaccurate today?
Adrian ?? : It’s all dependent on the device, browser and user … all things that are definitionally inaccurate at times. That’s why you mix location data with intelligence data (age, context, sequence, market, etc.). Location is one vector point, not all.

This story first appeared in the Sept. 25, 2017, issue of Adweek magazine. Click here to subscribe.

@laurenjohnson lauren.johnson@adweek.com Lauren Johnson is a senior technology editor for Adweek, where she specializes in covering mobile, social platforms and emerging tech.