LOCATION SCORE INDEX Q MOBILE ADVERTISING S GUIDE TO LOCATION ACCURACY

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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 The impact of accurate location data on campaign performance INTRODUCING : THE FIRST TOOL TO MEASURE LOCATION ACCURACY IN MOBILE ADVERTISING Location is front and center in the mobile industry and the pace of technological change has been amazing. First-generation geofences have been replaced with advanced proximity targeting, as well as location-driven audience targeting and behavioral retargeting. Location is solving the mobile cookie dilemma, and continued improvements in location data will deliver an even greater supply of targeting opportunities. In 2012, approximately 10% of all ad requests contained location data, while in 2014 the number is closer to 67%. As advertiser demand for location data has grown, so too has the number of publishers, ad networks, and other inventory sources willing to share location data. But, is this flood of new location data good for the industry? It all depends on the quality of the data. Accurate targeting is reliant on accurate location data. This report seeks to help marketers understand the state of the industry in terms of the quality of location data. The goal of the Location Score Index is to provide transparency and understanding to the marketers who will influence the direction of mobile marketing. The quality of location data will continue to improve and we hope this report helps to educate and accelerate the pace of change. There are enormous opportunities in mobile but as marketers, we are constantly evaluating tools to help us get to the best data possible. Location Score helps us to be smarter, ROI driven buyers and will help accelerate the industry to move towards more accurate location data. Amit Shah, VP of Marketing, Flowers.com 2 Location Score Index Q

3 INTRODUCING AND THE INDEX Senior-level marketers are seeking more transparency and a better understanding of data quality related to location-based marketing. With this report, Thinknear announces the launch of Location Score, the first technology designed to give marketers deep insight into the quality and accuracy of the location data used in mobile campaigns. The technology will provide marketers with a transparent and objective measurement tool that will enable more accurate targeting and better consumer experiences with location-based advertising. The technology is also the power behind this report, the inaugural edition of the Location Score Index. The Location Score Index is a summary of the overall state of location for the mobile industry. Marketers know that data quality can vary significantly, and it is our goal to help marketers understand how both accurate and inaccurate location data can impact campaigns. DEFINING LOCATION ACCURACY 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 miles. Identifying the user s true location is the goal of any ad network, as it enables enhanced targeting opportunities. METHODOLOGY The Thinknear platform accesses the major sources of location-enabled mobile inventory in the U.S. To compile this report, we sampled and analyzed data from over 3.5 billion publisher ad requests, 53 million ad impressions and have run location accuracy tests on over 20,000 consumer ad experiences. Our analysis focuses specifically on: o Quantifying the volume of ad requests that include both high-quality and low-quality location data o Measuring the accuracy of location data with regard to the stated vs. actual location of a mobile user o Quantifying the impact of location accuracy on mobile campaigns LOCATION ACCURACY REFERS TO THE PROXIMITY OF A USER S STATED LOCATION PER AN AD REQUEST COMPARED TO THE USER S TRUE LOCATION IN THE REAL WORLD. THINKNEAR FOUND SIGNIFICANT ISSUES IN LOCATION ACCURACY THROUGHOUT THE INDUSTRY, PROMPTING THE CREATION OF THE INDEX. STATED USER LOCATIONS ACTUAL USER LOCATIONS DATA POINTS PULLED FROM MOBILE CAMPAIGN TARGETING SPECIFIC LOCATIONS WITHIN THE DALLAS/FORT WORTH DMA, Q STATED USER LOCATIONS AT LEFT REPRESENT THE STATED USER LOCATION PER THE AD REQUEST. ACTUAL USER LOCATIONS AT RIGHT REPRESENT THE TRUE USER LOCATION AT TIME OF AD REQUEST BASED ON REAL-TIME COLLECTION OF USER LOCATION DATA. 3 Location Score Index Q

4 We ve seen that the quality of location data makes a significant impact on campaign performance. Location Score is a great tool that will help us ensure the targeting is accurate and that performance is optimized for our clients. Alex Richter, Camelot Strategic Marketing & Media 49 VOLUME BY ACCURACY LEVEL OUT OF 100 BY OPERATING SYSTEM 51 ANDROID 48 ios BY POPULATION DENSITY 50 URBAN 44 RURAL INDUSTRY AVERAGE 34% HYPER LOCAL Location data was accurate to within 100 meters of the user s true real-time location. 9% LOCAL Location data was accurate between 100 and 1,000 meters of the user s true real-time location. 30% REGIONAL Location data was accurate between 1,000 and 10,000 meters of the user s true real-time location. 20% MULTI-REGIONAL Location data was accurate between 10,000 and 100,000 meters of the user s true real-time location. 7% NATIONAL Location data was not accurate within 100,000 meters of the user s true real-time location. 4 Location Score Index Q

5 INTERPRETING THE RESULTS Location Score is governed by the simple principle that accurately knowing a mobile user s location to within a matter of meters is much more valuable than knowing her location by zip code or region. Scoring is a simple point scale, where a higher score indicates a more accurate level of location accuracy. Every ad request that passes location data has its own score. Highly accurate requests are scored higher than requests with low accuracy. However, the scoring scale is not linear. The ability for marketers to leverage advanced location targeting tools is dependent on high quality location data and therefore, scores grow exponentially as they become more accurate. A score of 100 would indicate the user s actual location is within 100 meters of the stated location per the ad request, 100% of the time. Based on our analysis, the industry score of 49 indicates there is a very broad spectrum of quality in the mobile ecosystem. We found some inventory sources to be relatively accurate (scoring in the high 70s), while other inventory sources were extremely inaccurate (scoring in the low 20s). Further, there was also a broad range of location quality by app. Certain apps provided high-quality location data while others consistently provided poor location data. Over time, we expect the Location Score Index will show improvement in industry-wide location accuracy. Publishers, networks, and other inventory sources will gain a better understanding of location technology, and marketers will demand more granular reporting. App developers with accurate location data will monetize better and thrive. 5 Location Score Index Q Location Score varies slightly by density of population. In urban areas where there are many more Wi-Fi and cell tower signals, it is actually easier to accurately identify a user s location. Location Score was 14% higher in urban areas than in rural areas. We found that Location Score did not vary significantly by operating system. Both Android and ios operating systems performed consistently in terms of overall location accuracy. DESPITE A LOW OVERALL SCORE FOR THE INDUSTRY, HIGH QUALITY LOCATION DATA IS AVAILABLE AND ACCESSIBLE WITH THE RIGHT TOOLS.

6 LOCATION DATA IN THE MOBILE ECOSYSTEM App developers know that sharing location data improves monetization, and they have several methods of collecting location data. Some methods, such as GPS, are more difficult to collect consistently, but produce very accurate location data. Methods such as IP address lookup and registration data are much less accurate. Regardless of the source, the data is typically translated into a set of latitude and longitude coordinates that are passed to the advertiser. It is very difficult for the advertiser to assess the quality and accuracy of the data without the help of a location expert. A-GPS Assisted Global Positioning System 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 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. USER REGISTRATION 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 MOST RELIABLE 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. 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. LEAST RELIABLE Regardless of source used, location data is typically translated into latitude and longitude. NOT ALL LOCATION DATA IS CREATED EQUAL. TO GET THE MOST OUT OF YOUR MOBILE ADVERTISING DOLLAR, IT S CRITICAL TO UNDERSTAND HOW LOCATION DATA IS COLLECTED Most marketers are just beginning to understand the complexity of mobile data. The location ecosystem can be difficult to navigate, but it s important for marketers to know the sources and relevant levels of quality associated with mobile location data. While the growth in available data is conceptually a good thing, the problem is that growth often comes at the expense of quality. App publishers understand that location data results in higher ecpms and better monetization rates. Therefore, app developers are incentivized to include location data in their ad requests, regardless of the source and accuracy of the data. The problem facing the industry is that app developers are not location experts, and the data being passed to advertisers is often of very low quality. The result is that a mobile user s true location is often very different from the app developer s stated location for the user. This impacts targeting, mobile creative, mobile content, and the overall engagement experience between advertisers and consumers. 67% OF AD REQUESTS INCLUDE LOCATION DATA, BUT ONLY 34% OF THOSE REQUESTS ARE ACCURATE TO WITHIN 100 METERS OF THE MOBILE USER S LOCATION. 6 Location Score Index Q

7 LOCATION ACCURACY DRIVES PERFORMANCE LOCATION IMPACTS TIME-ON-SITE We found that time-on-site for mobile campaign landing pages improved dramatically for the highest scoring location data as compared to the lowest scoring location data, providing further evidence that location context plays a key role in consumer engagement. LIFT IN TIME-ON-SITE BY INDEXED LIFT BOTTOM QUARTILE 1.08 TOP QUARTILE INDUSTRY AVERAGE 45% LIFT FROM BOTTOM QUARTILE TO TOP QUARTILE OF GETTING CUSTOMERS TO THE STORE For brick & mortar marketers, driving store visits is another typical KPI. We found that store visitation rates (the lift in store visits from mobile advertising) increased substantially when high-quality location data was used. Store visitation lift improved 30% 51% when comparing the use of top-tier location data vs. bottom-tier location data. Accurate data means accurate targeting. If advertisers are reaching the wrong audience, performance will suffer. Location also impacts user experience. Most mobile creative involves some level of dynamic content, which allows marketers to incorporate local context into the ads they serve. Poor location data makes for a poor user experience. Accurate location data impacts performance in a variety of ways. Preferred performance metrics in mobile vary by brand, agency and vertical, but marketers have continued the move away from CTR as the defining KPI. Brands are increasingly considering engagement metrics such as store visit lift, time-onsite and post-click conversions. LIFT IN STORE VISITATION BY TIER 1.60 RETAIL VERTICAL RESTAURANT VERTICAL INDEXED LIFT INDUSTRY AVG TOP TIER INDUSTRY AVG 1.51 TOP TIER THIRD-PARTY REVIEW OF LOCATION ACCURACY Thinknear has partnered with Placed, Inc. to validate the performance impact of accurate location data on store visitation rates. Placed is an independent third party partner and manages the largest opt-in mobile user panel on the globe. In working with Thinknear, Placed has directly measured a clear correlation between accuracy of location and instore visitation. Thinknear s Location Score provides a metric to advertisers to quantify the quality of location as it relates to their mobile ad campaigns. David Shim, CEO, Placed 7 Location Score Index Q

8 THE FUTURE OF LOCATION ACCURACY EVEN WITH THE LARGE AMOUNT OF INACCURATE DATA IN THE INDUSTRY, THERE IS AN INCREDIBLE AMOUNT OF HIGH QUALITY LOCATION DATA AVAILABLE TO MARKETERS. Location Score is the first step in providing the mobile industry with an understanding of the importance of location accuracy and the impact on marketers. The good news is that there is an enormous amount of high quality location data available in the ecosystem. Thinknear is focused on building the tools and platform needed to ensure that brands have access to extremely accurate data with high Location Scores. Better data correlates with higher conversions across the metrics that matter most and the industry will continue to improve and expand over time. Marketers should focus on finding sources of high quality location data and using location to its fullest potential to help brands connect with consumers on their mobile devices. The results will include higher confidence surrounding the targeting data and better performing campaigns. Location Score was designed to help marketers build and deliver better mobile campaigns. Transparency and measurement are key factors in growing the mobile industry and Thinknear is committed to delivering tools to improve mobile marketing. 8 Location Score Index Q

9 Thinknear is a location technology company and full-service mobile advertising network focused on delivering amazing advertising campaigns for agencies, brands and consumers. Thinknear s platform delivers the accuracy, scale and technology required to effectively leverage mobile location data to power better consumer experiences. In mobile, precision matters, and as a division of Telenav, Thinknear leverages exclusive access to over 14 years of proprietary location data. To learn more, please visit and on Twitter. LOS ANGELES SAN FRANCISCO NEW YORK CHICAGO DALLAS Advertiser Contact Info ADS@THINKNEAR.COM Media Inquiries MEDIA@THINKNEAR.COM 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.