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© 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

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© 2016 eMarketer Inc.
Introducing the three main characters in this
“location matters” story
1
The consumers
2 3
The data The marketers

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© 2016 eMarketer Inc.
Part I:
US Consumers

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
Nearly all
US adult
smartphone
owners have
used
location-based
services on
their phone

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© 2016 eMarketer Inc.
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%

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© 2016 eMarketer Inc.
Plot twists!
Three of them
have occurred so
far this year
Each has likely influenced
consumers’ attitudes toward
sharing location data

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
3. Pokémon Go
launched on
July 6, 2016
By month’s
end the app
had 25 million
US users
Source: comScore, September 2016

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© 2016 eMarketer Inc.
Pokémon Go requires the user to have
location-sharing services turned on

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
Part II:
The Data

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
Inaccuracies in location data can manifest in
two ways
1 21
x -3,339584
y 3,339584
X
Incorrect latitude and longitude
coordinates for a mobile device at a
specific point in time
2
x -3,339584
y 3,339584
=Target
X
Incorrect point-of-interest or “place”
data for the coordinates provided

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
Part III:
The Marketers

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
“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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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%

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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”)

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 eMarketer Inc.
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

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© 2016 xAd, Inc.
MOBILE
PATH TO PURCHASE

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© 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 3
consumers in the US are making trips into stores to complement their
mobile research, a 20% increase from just one year ago.

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© 2016 xAd, Inc.
MATCHING THE ONLINE EXPERIENCE
64%
26%
18% 18% 16%
Top Retailers Shopped on Mobile

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© 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

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Download the 2016 Global Retail Shopper Report
xAd.com/mp2p
44

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© 2016 eMarketer Inc.
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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