When the Music Stops: The End of Wireless Company Location Data
By Joshua Lawton, 8/28/18
When the music stops, the party is over, the instruments are packed up and people go home. Unfortunately for every advertiser and marketer in the United States, the music has stopped, because somebody took away their instruments, but they still need to play a song. It is unusual for a still relied upon technological innovation that has been the buttress of an entire industry to dissolve overnight, but when it happens, rather than dissolve into dust, its dissolution is felt like an earthquake that shakes the very foundation of an industry. That earthquake was Verizon and AT&T’s recent announcement that they would no longer sell mobile phone location data to third parties with whom their consumers do not have a relationship.
While you and I as consumers and privacy advocates might rejoice, the marketing and advertising industry is in trouble. Companies that built their business models on buying location data from wireless companies to package and resell have lost the key component of their business. Organizations that used location data from wireless providers as the sole foundation or as part of a package to provide daily impressions data to media buyers and media owners have lost their key source of data. Solutions that have taken years to build are going to have to reevaluate their development roadmaps, all because the two largest wireless carriers in the United States have stopped selling them location data.
Now, this is not to say that the location game is totally lost. Between the General Data Protection Requirement (GDPR), Vermont’s data broker legislation and the upcoming vote in California on their privacy law, things are looking bleak. GDPR is going to impact the efficacy of understanding consumer behavior and targeting and retargeting ads because automated decision making is outlawed under GDPR. Last but not least, only 40% of Americans keep their Bluetooth on, which seriously degrades the effectiveness of beacon technology. Relying on apps or software development kits (SDKs) to provide location data is fraught with error.
Foursquare reports that nearly 80% of the location data in their bid stream is inaccurate. Skyhook Wireless also suggests that up to 90% of the location data appended to their ad inventory is inaccurate. What's more, ThinkNear found that 54% of all location-targeted mobile ads are off by a half mile or more.
But all things considered, from Safe Graph to Cuebiq to Abraxas Technology, there are options for media owners, media buyers and advertisers to go to when they want to know the number of impressions that a billboard or another piece of physical advertising receives.
Unfortunately, where this data privacy movement in the U.S. is heading is a moving target. There are multiple factors that can impact what types of consumer data is shared. Therefore the out-of-home (OOH) advertising industry (along with the rest of the advertising industry) needs to be prepared for a rapidly changing privacy environment by engaging with companies that are providing data without relying on another company as their source. Media owners who prepare for the future will find themselves reaping the rewards of an increasing OOH advertising spend. Media owners who don’t will be selling their inventory at a discount to those who did. Additionally, as these regulatory waters continue to swirl, advertisers and media owners can take the following steps to stay on top of the shifting policy environment:
- Bring in a data privacy officer. Under GDPR, companies dealing with consumer data need to have someone responsible for ensuring that consumer privacy is followed in accordance with GDPR. As the regulatory foundation for data privacy shifts around the world, it is wise for advertisers to bring in someone to fill the data privacy officer position.
- Turn to alternatives that do not solely rely on SDKs to provide location data. Relying on app location data has been a go-to for advertisers. From understanding consumer behavior to retargeting ads, they have played a pivotal role. As regulations shift around the world, the efficacy of SDKs and apps will lessen.
- Understand what camera technology can and cannot do. Sales and the companies that they work for have done a great job of marketing what their camera technology could do. From being able to tell you the emotions of a consumer when viewing an ad (something that is based on incomplete scientific research)to telling you that they can track people from one location to another (a feat that with state of the art techniques has around a 50% accuracy ratein certain conditions), understanding the limitations of camera technology can keep you in line with privacy regulations.
This article was originally printed on Forbes.
Want to know how Abraxas can help you navigate this new era? Feel free to reach out to Josh at JLawton@abraxastechnology.com.
Follow Abraxas Technology on Twitter @Abraxas_Tech.