With smartphone usage becoming so widespread, geofencing offers an excellent way for businesses to get in touch with prospective customers with personalized promotions. In fact, geofencing technology is compatible with 92 percent of smartphones in the United States. The ads themselves also boast high levels of success, with 53 percent of shoppers saying that they have visited a particular store after receiving a targeted, location-based marketing promotion. Half of those who stopped by a store also reported that this visit was unplanned.
However, the data used in geofencing comes from a variety of sources, with some more accurate than others. Thus, not all of them can be viewed with equal levels of trust. Businesses looking to invest in geofencing should make sure they thoroughly understand the origins of geofencing data, so they can make sure that their efforts produce the results they seek.
So where is the location data coming from?
In geofencing, advertisers use three main sources of data, each with their own benefits and drawbacks.
SDKs are commonly cited because they offer very high-quality data. This information is gathered through a piece of code placed in an app, which then collects information about the location of the mobile device. Although the information it collects offers great real-time insight around the clock, it does require permission from the user to operate. It also can drain the battery of the mobile device, which can then hurt the user experience.
Beacons also hold a prominent place in the field of geofencing because of the accuracy they offer. This information is collected through beacons that offer data such as when a person has visited a store and how long they were there. It relies, however, on users having an app with an SDK and that they have their Bluetooth turned on to allow the beacons to collect information. In the wake of recent regulations and general awareness about consumer data privacy, Apple’s recent iOS update denies data access to apps via Bluetooth unless users have granted consent.
Geofencing information can also be gathered through bid-stream data. This information is collected through ads that run on mobile apps. While it solves some problems associated with SDKs– namely it does not put as much stress on the battery life of the mobile device and it is easy to scale, the information does not have the same degree of accuracy of SDKs. For example, not all the information that gets collected in the bid-stream comes through GPS, it can also come from user-entered information. Since customers sometimes need to collect information about areas that differ from their immediate location, user-entered data does not carry the same degree of accuracy.
Location data sources
For brands to effectively run geofencing marketing campaigns, the advertiser also relies on the device itself to secure the location, so that the information can be passed along. There are a few different sources of data that both android and iOs devices depend upon to capture this information.
GPS: If the user has GPS enabled, then this source of data provides very accurate data points on the location of the user. Unfortunately, if the user does not turn on GPS, or if they leave areas with many GPS signals and satellites, the accuracy can quickly degrade.
IP address: The IP address also offers some insight regarding the device’s location, but it tends to not be the most reliable source. Generally, the IP address will come from the app server, which might not be in the same proximity as the user themselves. Therefore, this information does not help much with real-time tracking.
Mobile network triangulation: Mobile network triangulation often provides a reliable source of data and information. It can help to target people within larger geographical boundaries, such as a particular neighborhood or zip code, but it does not help with targeting people to a smaller radius, such as outside a particular store.
WiFi: When users are in areas with prevalent WiFi signals, this can provide accurate and valuable data regarding the location of users. Unfortunately, for people in areas that do not include a number of different WiFi signals, the information here will again be less accurate and helpful.
Beacons: Beacons can offer an extremely high degree of accuracy, including the ability to identify people within a few yards. Stores can even use this information to target people within certain departments of their stores. Unfortunately, this information is hard to use at scale and can place a strain on the batteries of the users’ mobile devices.
Registration: When users first sign up for various apps and programs, they often provide some information about their general location. Although sometimes this information can provide valuable insight, it cannot be counted on as particularly accurate because users can easily move about and the information becomes unusable.
How accurate is location data?
As businesses begin to construct their geofencing ads, they need to understand how to evaluate the usefulness of the data they receive. To understand this data, they must understand the terms used to describe the data collected.
Accuracy refers to how close the location data is able to get to the actual location of the mobile user. Precision, on the other hand, looks at how closely two or more measurements are to each other.
When advertising platforms discuss location data, they may also use unstructured data points, such as recency. Recency looks at how recently and/or how frequently a customer visits a particular store. This can add additional information to the data collected through the other means and provide a greater degree of usefulness.
Behind the scenes: How a location-based ad gets shown
When an advertiser identifies the geolocation to target, and have the ad creatives ready. The following sequence happens:
- The creative is uploaded, and the location targeting is configured to focus on the specific geolocation and bids are allocated.
- When a device enters the geolocation of interest and is connected to the internet. It opens a request for the available ad spot.
- The request for an ad arrives from the ad server, passing along the data containing important information such as the device ID, operating system, app, location data, and other valuable information that allows the server to pair it with an ad.
- The auction process for the ad placement on this particular device will be completed within milliseconds, with the highest bid for this spot in this particular location getting awarded.
- The ad is then served to the device, and a unique record of it is stored on the platform.
Geofencing allows advertisers to provide customers with highly personalized ads that reflect the immediate location of the user and their proximity to particular businesses. The ability of ads to target people based on where they are and their needs will help them bring in new potential customers. Those interested in running these types of ads should familiarize themselves with the important information above and create ads that will help their organizations thrive.