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As Location Data Use Becomes A Mainstream Marketing Tool, Advertisers Seek Alternatives To Facebook, Google

False impressions, transparency, and pricing are the topmost concerns about location-based advertising with Facebook and Google, a survey from Factual finds.

Last year’s $17.1 billion spent by marketers on location-targeted mobile advertising is expected to rise to 22.2 billion in 2018 on to $38.7 billion by 2022, according to BIA Advisory Services.

To get a sense of what’s driving that spending — and the forces that still hinder it — geo-data specialist Factual commissioned Lawless Research to design and conduct a study about marketers’ practices and preferences when using location data. Between March 22 and April 15, 2018, manager-level and above respondents from 534 consumer brands and 166 advertising/marketing agencies were asked about their spending plans and what their concerns about the use of geo-data are.

Some of the topline findings of the Factual Location Based Marketing Report include:

Marketers are concerned about the Facebook and Google duopoly in online advertising, and the majority are seeking alternatives. Data is locked within walled gardens, and marketers are unable to learn from it or apply it outside of the siloed platforms. Transparent data, which is platform and use case agnostic, is critical in allowing marketers to understand and best reach their audiences.

  • Among the brands and agencies surveyed, 92 percent have one or more concerns about the advertising duopoly
  • False impressions (38 percent), transparency (36 percent), and pricing (36 percent) are the topmost concerns about advertising with Facebook and Google
  • 71 percent of marketers are seeking alternatives to the duopoly for online advertising.
  • Nearly all (95 percent) of location data buyers agree that data transparency accurately indicates the quality of the data

Location data increases campaign effectiveness. The majority of marketers are using location-based data for targeting, and it’s working.

  • Nearly two-thirds of marketers use location data for targeting ads and promotions, and nearly half for location-based offers
  • More than 8 out of 10 marketers say location-based advertising and marketing produced growth in their customer base (85 percent), higher response rates (83 percent), and higher customer engagement (83 percent)
  • Using location data also gave them deeper knowledge of their customers’ needs and interests (77 percent), improved ROI for their marketing and ad campaigns (74 percent), and increased lift (70 percent)

Personalization is a key component in marketing. Consumers are more inclined to buy a product when the experience is tailored to their preferences — but true personalization isn’t possible without location data. They’re also now accustomed to a personalized experience, and many consumers become frustrated when a marketing interaction is impersonal and doesn’t reflect their preferences. Location-based marketing helps make this happen.

  • More than 8 in 10 mobile marketers use location-based data to personalize the customer experience
  • 82 percent use location data to personalize the customer experience and 85 percent plan to do so in the next 12 months

“Marketers have clearly recognized the benefit of location data in mobile, and its usage and awareness as a mainstream and necessary piece of the digital advertising puzzle will only grow,” Factual CMO Brian Czarny told GeoMarketing. “While many may have initially viewed location as a targeting tool, our research shows that marketers are using it in innovative ways, for personalization, audience engagement, strategic decision-making and beyond.”

But what about the perennial issue of geo-data quality? Is the glass half-full?

“Data quality and accuracy are major concerns for marketers, and primary differentiators for Factual,” Czarny responded. “While we can be certain about the quality of our data, thanks in part to our Place Attachment technology that takes into account data signals beyond location to determine if a user is at a specific place, data from other sources can be harder to qualify. We do know that nearly all location data buyers (95%) agree that data transparency is a good indicator of quality. As providers become more transparent, the state of the industry will improve as a whole.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.