LOCATION SCORE INDEX Q MOBILE ADVERTISING S GUIDE TO LOCATION ACCURACY

Transcription

1 LOCATION SCORE INDEX Q MOBILE ADVERTISING S GUIDE TO LOCATION ACCURACY

2 LOCATION ACCURACY MATTERS THIS REPORT FOCUSES ON HELPING MARKETERS UNDERSTAND: The current state of location data quality in the mobile ecosystem How location data is generated When location accuracy matters THINKNEAR S LOCATION SCORE INDEX CONTINUES TO DRIVE THE INDUSTRY TOWARDS BETTER ACCURACY Location is at the core of every marketer s mission of providing the right content at the right place and right time. However, the quality and accuracy of location data remains top of mind for senior-level marketers. This second edition of the Location Score Index provides an update on the state of the industry and seeks to help marketers understand why accurate location matters not just for hyper local campaigns, but for ALL campaigns. Since publishing our first Location Score Index in May, the industry has taken notice and is making moves to improve location accuracy. In July, the IAB published 12 Questions Every Buyer Should Ask about Location Data, and in August, the MMA launched the Mobile Location Data Accuracy Committee with Thinknear and other industry players to focus on the critical issue of location accuracy. METHODOLOGY The Thinknear platform accesses the largest sources of locationenabled mobile inventory in the U.S. To compile this report, we sampled and analyzed data from over a billion ad impressions and ran location accuracy tests on close to 500,000 consumer ad experiences. Location is enabling better targeting and driving better consumer experiences, but data accuracy will be the key to ensuring further growth of the industry. The Location Score Index is the benchmark for measuring the mobile industry and we are committed to improving transparency and accuracy for marketers. 2 Location Score Index Q

3 LOCATION DATA IN THE MOBILE ECOSYSTEM Location accuracy starts at the publisher level, and app developers have realized it pays to share location data. Publishers use a variety of sources to determine user location, with the accuracy of these sources ranging considerably. LOCATION ACCURACY DEFINED Location Accuracy is defined as the proximity of a user s stated location per the ad request, compared to the user s actual location in the real world. Stated vs. actual location can vary by a matter of feet or a matter of hundreds of miles. Identifying the user s true location is the goal of any ad network, as it enables enhanced targeting opportunities and better performance. The primary sources of location are below. PRECISION VS ACCURACY It s important to clarify the difference between precision and accuracy. Precision relates to the granularity of the data, a DMA, a zip code, a city block, or a specific latitude and longitude. Accuracy refers to whether the data is actually correct. So while a precise ad request may specify a user s location to within a matter of feet, that data is worthless if it is not accurate. A-GPS Assisted Global Positioning System 1 MOST ACCURATE GPS satellites maintain a constant orbit around the earth, sending signals to the ground allowing a smartphone to calculate location within a few feet under optimal conditions. A-GPS can be a battery drain, so developers choose other solutions. Additionally, weather and building interference can reduce effectiveness. CELL TOWERS 2 3 WI-FI Nearly all Wi-Fi connection points have been mapped to a location, so depending upon the availability of Wi-Fi networks, triangulation within 10 to 100 meters is relatively easy. The downside: Users are not always near a network, or they may simply have turned off the phone s Wi-Fi. ACCURATE LOCATION DATA ENABLES: o Enhanced audience targeting o Higher engagement o Better creative Cell towers are typically three-sided with a transmitter on each side. Location accuracy to within ¾ of a square mile is possible when three towers are present and there is no interference. When a user has coverage from a single cell tower, or even two towers, the location approximation can range over many miles. Building interference can also reduce accuracy. 4 IP A device s location can be approximated using its IP address as assigned by the network operator; however, in terms of identifying the true location of the user using standard network techniques, it s almost universally wrong. INACCURATE LOCATION DATA RESULTS IN: o The wrong audience o Negative brand perception o Wasted money and effort USER REGISTRATION 5 LEAST ACCURATE It s typical practice for an app developer to ask a user to share their postal code or home city when registering for an app. The app developer then pinpoints the center point of that geographic region. Real-time location data is effectively always wrong for this type of location information. Regardless of source used, location data is typically translated into latitude and longitude. 68% OF AD REQUESTS INCLUDE LOCATION DATA IN 2014 WHILE IN 2012 ONLY 10% OF ALL AD REQUESTS CONTAINED LOCATION DATA. 3 Location Score Index Q

4 We score location on a 100-point, non-linear scale. Thus, it s easier to grow a score from 25 to 35 than it would be to grow from 75 to 85. We constantly update the algorithm used to calculate Location Score, so industry scores fluctuate from time to time. LOCATION SCORE TOP 5 APP CATEGORIES BY LOCATION SCORE SHOPPING TECHNOLOGY SOCIAL WEATHER SOCIETY & COMPUTING NETWORKING Out of the 27 app categories analyzed, the five above demonstrated the highest location scores. INDUSTRY AVERAGE LOCATION SCORE VOLUME BY ACCURACY LEVEL (Q3, Q2) 46% HYPER LOCAL Accurate to within 100 meters or less of the 34% user s true real-time location. (Size of a football field) 9% LOCAL Accurate between 100 and 1,000 meters of the 9% user s true real-time location. (Approx. 0.6 miles) 18% REGIONAL Accurate between 1,000 and 10,000 meters of 30% the user s true real-time location. (Approx. 6 miles) 16% MULTI-REGIONAL Accurate between 10,000 and 100,000 meters 20% of the user s true real-time location. (Approx. 60 miles) 11% NATIONAL Accurate to within 100,000 meters of the user s 7% true real-time location. (Greater than 60 miles) 4 Location Score Index Q

5 INTERPRETING THE RESULTS Location Score is based on the principle that accuracy is always important for a campaign, regardless of whether the desired targeting area is the size of a few meters, or an entire DMA. Every ad request that passes location data is scored on a simple point scale, where highly accurate data is scored higher than data with low accuracy. However, the scoring scale is nonlinear; highly accurate data is weighted more heavily than less accurate data. Based on our analysis, the industry score of 55 indicates that there is a very broad spectrum of data quality in the mobile ecosystem. We found some mobile inventory sources both at the publisher and aggregator levels to be relatively accurate (scoring in the low 90s) while other inventory sources were extremely inaccurate (scoring in the low 20s). INDUSTRY LOCATION SCORE TREND 55 12% improvement quarter over quarter in Industry Location Accuracy 50 The Industry Location Score increased from 49 in Q2, to 55 in Q3, 2014, a 12% improvement in location accuracy. The Location Score Index and pressure from marketers is starting to increase the transparency and quality of data in the industry. WE ANTICIPATE THAT LOCATION ACCURACY WILL CONTINUE TO IMPROVE OVER TIME AS PUBLISHERS AND OTHER INVENTORY SOURCES INCREASE THEIR FOCUS ON LOCATION. 45 Q Q Additionally, tools such as Thinknear s Location Score platform that filter out questionable data will force bad players to adapt or exit the space. 5 Location Score Index Q

6 LOCATION Q&A WITH VICTOR MILLIGAN, NEXAGE Thinknear partners with the mobile industry s top programmatic inventory sources, including Nexage. Recently we sat down with Nexage s CMO, Victor Milligan, to discuss the importance of location accuracy. HOW IMPORTANT IS LOCATION DATA TO MOBILE ADVERTISING? Location data is a strategic asset a high-value currency for mobile advertising. Precise location data is unique to mobile, giving brands and retailers an extraordinary opportunity to drive affinity, foot traffic, and most importantly, sales. This is the reason that spend on lat/long-enabled inventory on the Nexage Marketplace more than doubled from before Black Friday throughout the holiday season in Advertisers and media buyers place a higher value to lat/long inventory, which can command upwards of a 2-3X CPM premium relative to nonlocation-enabled impressions. HOW IMPORTANT IS IT FOR BUYERS TO RECEIVE ACCURATE LOCATION? It is critical. Buyers will price, and maybe more importantly execute hyper-local campaigns with the expectation that location is accurate. And it should be accurate. Nexage helps buyers understand the exact nature of the location parameter by sending signals to media buyers as to whether they are buying centroidderived lat/long or GPS-derived lat/long where GPS-derived is substantially more accurate and valuable. Our goal is to ensure advertisers and media buyers can decision on accurate location signals and get the strategic value out of location data they need to drive business results. HOW HAS KNOWING YOUR OVERALL LOCATION SCORE AND YOUR PUBLISHER S LOCATION SCORES HELPED YOU MAINTAIN A LEADING POSITION WITHIN THE PROGRAMMATIC SPACE? Thinknear s Location Score is critical to ensuring that the value of location data has a direct and strategic impact to advertisers and publishers. At Nexage, we have a similar view and a strong builder sensibility. We have made real and important steps to both increase the availability and integrity of location data, especially GPS-derived data, for buyers and advertisers while ensuring publishers accrue the full value of making that data available. WHAT STEPS HAVE YOU TAKEN TO WORK WITH YOUR PUBLISHERS TO INCREASE THEIR LOCATION ACCURACY? We take a multi-pronged approach to location accuracy, including the following: o Nexage conducts forensics on location data sold on the Nexage Marketplace to help publishers and buyers understand the fidelity of the data o The Nexage SDK gives publishers and app developers a better opportunity to send high-quality location parameters to buyers and advertisers o Nexage continues to help publishers and app developers make location parameters lat/long, zip/post code, city, state and DMA available in a privacy-safe way so that the entire mobile advertising ecosystem benefits from this mobile-unique asset CATEGORY SPOTLIGHT: FASHION & SHOPPING APPS GO FOR ACCURACY PERCENTAGE IMPROVEMENT IN LOCATION ACCURACY 74% STYLE & FASHION Since Q2, 2014, the Style & Fashion and Shopping app categories have seen 74% and 42% improvements in the accuracy of their location data, respectively. Developers in these categories as well as others are realizing the importance of accurate location data on user experience and have taken steps to improve their scores. For marketers, this means the availability of high quality inventory is expanding and allowing for content and creative that can be accurately localized for each campaign. 42% 24% 18% 12% SHOPPING SCIENCE EDUCATION NEWS 6 Location Score Index Q

7 WHEN DOES LOCATION ACCURACY ACTUALLY MATTER? Marketers frequently ask if accurate location data is needed for campaigns that aren t focused on hyper local targeting. The need for precise data certainly varies, but accuracy impacts almost every type of campaign. PROXIMITY BASED TARGETING Targeting mobile users in close proximity to a brick-andmortar location is a core tactic for retailers, auto dealers, large restaurant chains and marketers wanting to conquest the competition s customers. Accurate location is critical in ensuring impressions are not wasted on users outside of the addressable markets. LOCATION-BASED AUDIENCE TARGETING Location enables the targeting of specific audiences that brands would otherwise struggle to reach on mobile. Audience traits such as ethnicity, household income, family size, life stage and others can vary dramatically from neighborhood to neighborhood, making it critical to deploy accurate location data when targeting audiences on mobile. NATIONAL AND DMA- LEVEL CAMPAIGNS Traditional brand advertisers often leverage DMA or even national campaigns. But even wide-area campaigns benefit from location accuracy. For DMA-level campaigns, accurate location data ensures that mobile ads are delivered in the right DMA and that creative is localized effectively. For national campaigns, location allows advertisers to deploy large-scale campaigns targeting specific audiences in each local market. BEHAVIORAL TARGETING Targeting mobile users based on the places they frequently visit is a key trend in mobile. However, if a marketer wants to reach users who shop at Walmart, Macy s or Safeway, the location data used to create the user profiles must be highly accurate. Poor location data can render user profiles worthless and prevents location-based retargeting from being effective. LOCATION DATA IMPROVES MARKETERS ABILITY TO HIT THE RIGHT TARGET, REDUCES IMPRESSION WASTE AND IMPROVES PERFORMANCE FOR NEARLY ALL CAMPAIGN TYPES. LOCATION BASED AUDIENCE Location provides a wealth of information about mobile users and can be used to target very specific audiences. But audience traits can vary significantly over very short distances, which means location data must be highly accurate to effectively reach the target audience miles Chicago Hispanic Population with Income > $50K More than 70% Hispanic 30 70% Hispanic Less than 30% Hispanic

8 WHAT S YOUR LOCATION SCORE? Thinknear s Location Score technology powers all of Thinknear s mobile campaigns and is used to create the Location Score Index. We are also making the technology available to marketers for use in location-based campaigns on ANY mobile network through our Location Score Tags product. Location Score Tags is a simple and free solution that allows mobile marketers to benchmark the location accuracy of all their location-targeted campaigns. Visit LocationScoreTags.com to learn more. In the PC world, marketers are demanding verification of viewability. Location Score may become an equivalent kind of metric for mobile display advertising a way for marketers and advertisers to have confidence that they re actually getting what they paid for. Greg Sterling, Opus Research LOS ANGELES SAN FRANCISCO SILICON VALLEY NEW YORK CHICAGO DALLAS DETROIT Copyright 2014 Thinknear by Telenav. The Android robot is reproduced or modified from work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.