emarketer webinar: location matters—using mobile location data to drive actions and sales

© 2016 eMarketer Inc.

Made possible by

Location Matters: Using Mobile Location

Data to Drive Actions and Sales

Cathy Boyle

Principal Analyst, Mobile

September 29, 2016


Introducing the three main characters in this

“location matters” story

1

The consumers

2 3

The data The marketers


Part I:

US Consumers


US Consumers

64% will use a

smartphone

regularly in

2016.

On average,

they’ll spend

3 hours and 18

minutes daily

using apps* * internet-connected apps

Source: eMarketer, April and August, 2016


Nearly all

US adult

smartphone

owners have

used

location-based

services on

their phone


Two ongoing trends will drive the absolute

number of location-based service users higher

1

2016 growth rate for

US smartphone users

+8.7%

Source: eMarketer, March and August 2016

2

2016 growth rate for

US mobile app users

+4.9%


Plot twists!

Three of them

have occurred so

far this year

Each has likely influenced

consumers’ attitudes toward

sharing location data


1. The

confrontation

between the

US Justice

Department

and Apple over

smartphone

security in

early 2016

VS

It likely heightened consumers’ concerns

about the privacy implications related to

sharing their location via a smartphone


2. Snapchat

usage took off

More people in the US will use

Snapchat this year than use

Twitter—58.6 million vs. 56.8

million, respectively

Source: eMarketer, June 2016


The use of

Snapchat’s

geofilters doubled

in three months

Over 1 billion geofilters were being

viewed daily as of late August

2016, double the number from

earlier in the summer

Source: USA Today, August 2016


3. Pokémon Go

launched on

July 6, 2016

By month’s

end the app

had 25 million

US users

Source: comScore, September 2016


Pokémon Go requires the user to have

location-sharing services turned on


Location-sharing

is integral to

four of six

fast-growing

apps in the US

Fitbit and Bitmoji were the

other two fast-growing apps

noted by comScore

Source: comScore, September 2016

% Change in US adult

users since June 2014

+195%

+824%

+220%

+492%

Ranked in order of the

number of US unique users


Employing this handful of best practices will

increase opt-in rates:

Explain why and how location sharing will improve the

app experience

Deliver on the promise that location sharing will provide

value

Ease the user into the “official” opt-in request

Don’t ask for more permission than required for

delivering a compelling user experience


Part II:

The Data


Location data quality remains a challenge;

experts say much of the data is bad

“We throw out 80 percent of data

coming from the bid stream because

it’s completely inaccurate.”

—Steven Rosenblatt, President,

Foursquare

“We throw out 80% to 90%

of mobile impressions because the

lat/long data is not accurate enough.”

—David Bairstow, Vice President,

Product, Skyhook Wireless

“The problem with the

location data set on the

exchanges is 95% to

97% of it is bad.”

—David Shim, Founder

and CEO, Placed


Inaccuracies in location data can manifest in

two ways

1 21x -3,339584

y 3,339584X

Incorrect latitude and longitude

coordinates for a mobile device at a

specific point in time

2x -3,339584

y 3,339584

=TargetX

Incorrect point-of-interest or “place”

data for the coordinates provided


Steps are being taken to sort good data from the

bad, and to raise awareness of the problem

Location-savvy advertising networks, demand-side

platforms (DSPs) and data management platforms

(DMPs) are weeding out the bad data from the good

Industry groups are continuing their efforts to improve

data quality

– The Interactive Advertising Bureau (IAB) issued its first mobile location data

guide for publishers in February 2016

– The Media Rating Council (MRC) is due to circulate its first set of location

guidelines before the end of the year


Location experts are looking forward to the

MRC’s guidelines

“Having an independent

source that says what

vendors need to show in

order to substantiate

their promises is going

to weed out any bad

players.”

—David Shim, Founder and

CEO, Placed

The guidelines will address many

aspects of location, including:

1. The leading methods used to derive

location data

2. The varying degree of precision and

accuracy of each method

3. Pairing a device location to a place

4. Taking altitude and speed into

account

5. How to share location data across

the advertising ecosystem

6. Privacy disclosures and compliance


The MRC hopes to achieve two goals with the

location guidelines

“The best case scenario will

be if vendors actually enter

the process and get audited

and accredited against

the guidelines.”

—David Gunzerath, Senior Vice

President and Associate Director,

The Media Rating Council

1. Increase awareness of

the strengths and

limitations of the

various techniques

2. Give location data users

the leverage they need

to have more informed

discussions with

providers


Reports of poor

data quality haven’t

rattled marketers’

confidence in the

power of location

data

Roughly 70% of marketers polled

by the LBMA in early 2016 said

location data was valuable,

actionable and accurate


Part III:

The Marketers


Marketers found ways to capitalize on the

Pokémon Go craze

Image source: Reddit

Some used old-school ways

to lure players in, such as

window and sidewalk signage

66% of Pokémon Go players

polled by MGH Inc. said they

had seen businesses

promoting Pokéstops and

Pokémon-themed products,

services and discounts

Source: MGH Inc., August 2016


Other businesses bought a “lure” via the app to

attract crowds of players

“One pizza shop owner in New

York paid a modest $10

through the app to temporarily

draw a dozen of the imaginary

characters into his restaurant, and

saw business leap by 75% as

players came in to ‘catch ‘em all.’”—New York Post

Source: New York Post, article published on July 12, 2016


“Lures” didn’t work for all businesses, however

“We bought lures for a couple of days

for two restaurants—one in Oklahoma

City and one in Overland Park

[Kansas]. People showed up, but

almost zero made a purchase.”

—Kirk Williams, Franchisee, Rock & Brews


Niantic has begun offering sponsored locations

in Pokémon Go as a form of paid advertising

Sponsored locations have only

been deployed in Japan, so far

McDonald’s was the first big brand

to jump on board

In September 2016, Japanese

mobile operator SoftBank

announced it too would have

Sponsored Locations in the game Image Source: Toru Hanai, Reuters


Location-based sponsorships of another kind are

attracting marketers to Snapchat

Most brands are sponsoring

geofilters to raise brand

awareness

Sponsored Geofilters are also

proving to be effective at

increasing consumers’

purchase intent

Pernod Ricard’s

Sponsored Geofilter for

Jameson whiskey

Raised

purchase

intent by 42%


Bloomingdale’s used Snapchat’s Sponsored

Geofilters to increase foot traffic to its stores

“Instead of looking for

physical clues in each store,

shoppers looked for the

store’s Snapchat geofilter.”

—Jonathan S. Paul, Operating Vice

President, Social Media and Paid

Media, Bloomingdale’s


Most common use case:

Location-based ad targeting (proximity targeting)

Three other use cases are also proving powerful:

1. Geobehavioral ad targeting

2. Consumer insight and audience building

3. Online-to-offline measurement

Marketers use location data in multiple ways

with paid mobile media


Retailers have a history of targeting ads to

mobile users within proximity of their stores

Sale

Image source: Nathan Yau

Many target competitor stores, too

(aka “conquesting”)


But interest in

proximity

targeting is

not limited to

retailers

A majority of US marketers

polled in January 2016 saw

ad targeting and increasing

in-store sales as key benefits

of location-based marketing


Hilton Hotels used proximity-targeted search ads

and flight cancellation data to increase revenue

Image source: Siwat V

Impact on local hotel

revenues:

Philadelphia: +500%

Washington DC: +220%

Charlotte: +100%

New York City: +88%

Source: iProspect, 2016


To influence real-time behavior, marketers need

to satisfy consumers’ immediate needs

“The Hilton campaign was

about understanding

consumers’ needs

and convincing them to

take an action in the

moment.”

—Jeremy Hull, Vice President,

Products and Services

Solutions, iProspect

“To increase lunch sales at

Rock & Brews, we

targeted businesses within

a 10- to 15-mile radius of

the restaurant in the

daypart around

lunchtime.”

—Jessie Thomas, Channel

Supervisor, VML


Marketers also target ads based on the places

their target audiences frequently visit

Source: Placed, June 2016

This may prove powerful for “get out the vote” campaigns for the

upcoming US presidential election


Marketers like those at Office Depot use location

data to build audience segments for ad targeting

Analyzing device visitation rates to

specific locations over time

provides insight into the type of

person using the device

Using such data in aggregate

enables marketers to build unique,

geoinformed audience profiles

for ad targeting

Examples: Office workers, mothers

with children, artists

Office Depot results:

33% lift in purchase intent

29% lift in store visits

vs.

0% lift for both metrics

when using DMA targeting

Source: IPG Media Lab, Thinknear, Office Depot Inc., September 2016


How are store visitation rates measured?

There are two leading methods for using location data to

measure store visitation rates:

1. Impression-based measurement. Comparing the location of a device

when the ad is served to the location(s) where that device is detected after

the ad is served

2. Panel-based measurement. Tracking the locations of a large panel of

mobile users over time via apps


The need for accuracy and precision is critical

when location data is used for measurement

“Combining GPS, Wi-Fi,

cell tower locations

and sensor values like

accelerometer, gyroscope

and compass gives you a

more accurate view of

where somebody is.”

—David Shim, Founder and CEO,

Placed

Using a cocktail of data

signals is a best practice

for attaining the highest level of

precision, accuracy and

confidence


Marketers need to ask three key questions when

using location data for measurement

1. How was the location data derived?

2. Is it first- or third-party data?

3. Are the proper permissions in place to use the data for

attribution purposes?

Marketers that seek answers to these questions will be best

equipped to use location data to measure increases in store visits


To sum up:

More US consumers are turning location-sharing services on—and

keeping them on—thanks to a new wave of location-centric apps

Most of the location data in circulation in the ad ecosystem is not accurate

enough for hyper-local targeting or offline measurement

Mobile advertising firms are weeding out the good data from the

bad for advertisers

The Media Rating Council will issue location guidelines before the end of

the year

Location data is being used in multiple ways—for proximity targeting,

geobehavioral targeting, audience targeting and store visitation measurement

© 2016 xAd, Inc.

LOCATION MATTERS

65%Complete a transaction related

to their mobile research

78%Want to purchase within a day or

sooner when using mobile

2 out of 3consumers in the US are making trips into stores to complement their

mobile research, a 20% increase from just one year ago.

© 2016 xAd, Inc.

BRIDGING ONLINE AND OFFLINE WORLDS

AT HOME

54%

Location When Last Accessing

Information on Smartphone

+75%32%

6%

AT THE STORE LOCATION

24%

+41%

2013

2016

Download the 2016 Global Retail Shopper ReportxAd.com/mp2p

44


Learn more about digital marketing with an

eMarketer corporate subscription

Around 200 eMarketer reports are published

each year. Here are some recent reports you

may be interested in:

Q&A Session

Made possible by

You will receive an email tomorrow with a link to view the

deck and webinar recording.

To learn more: www.emarketer.com/products

800-405-0844 or [email protected]

Cathy Boyle

Location Matters: Using Mobile

Location Data to Drive Actions

and Sales

Snapchat Advertising: A Roadmap for US Brand Marketers and

Digital Agency Executives

Location Intelligence, H1 2016: Guidance for US Marketers on

Consumer Behavior, Data Quality and Mobile Marketing Tactics

The Mobile Attribution Gap: Five Missing Links in Mobile That

Make Attribution Harder