Location Data Inaccuracies

Location Based Advertising

Making good use of accurate location data from a mobile phone is something every advertiser pursues in order to offer highly relevant ads to shoppers. The reason for this is that ads are more effective when served to the right interest at the right time and right place. The installation of ad blockers is on the rise in part due to shoppers being bombarded with irrelevant and annoying ads.

On average studies have shown that 90% of location data in ad requests is inaccurate due to being stale or fabricated. The other 10% has a higher level of accuracy but determining which of those 10% has a level of accuracy good enough to target a shopper is difficult. The kicker is, advertisers have no way to know which data is good.

Existing solutions on the market focus on filtering the vast amounts of 3rd party location data available. How this data was obtained is unknown and therefor these attempts are flawed. To that, we remind you of one of the basic computer science principals, “garbage in, garbage out”.

Location is only one factor in targeting your intended audience, building customer loyalty and brand awareness, ultimately influencing the purchase decision. Effective advertising can and should be complementary within the context of your audience and their daily movements. AdAbouts technology combines accurate location with interests and behavioral patterns to enhance your audience profiles and ensure your campaigns are on target.

The Many Inefficiencies of Real-Time Bidding

Current inefficiencies of RTB
Imagine for a second that you are on the main floor of the New York Stock Exchange as the market opens. Papers are flying, phones are ringing off the hook, and traders are clamoring to cut deals as fast as they can. This is an example of real-time bidding in the financial sector. Stock brokers use the present information they have on hand, based on data and news collected from around the world, to buy and sell stocks instantaneously.
A similar concept of real-time bidding applies to the mobile ad market.

What is Real-Time Bidding? (RTB)

Real-time bidding is defined as a process in which advertising inventory is bought and sold on a per-impression basis, via programmatic instantaneous auction. Basically, when a mobile phone user sees a pop-up ad within an app or on a website, that ad got onto their screen by winning a RTB auction.
In terms of mobile advertising, the bidding group is the advertiser and the app publisher is the auctioneer. That said, mobile advertisers only pay a publisher for displaying their ad if the end user actually clicks on the advertisement.
In order to determine which ad wins a RTB auction, developers consider two primary variables: 1) the price of the bid and 2) the location of the user. The goal is to display ads that are both relevant and high-paying in order to maximize profit. However, traditional RTB practices have been exposed as inefficient recently and this is why.

Inefficiencies of Real-Time Bidding Practices

Traditional mobile advertising is inefficient because the calculations that publishers make to decide which ads to display are incomplete. According to software developer and CEO of AdAbouts Richard Sylvester, “the largest problem we see is the fact that all RTB servers work by returning the highest bid.” Of course, awarding ad exposure to the highest bidder makes sense, if payment were guaranteed. But remember, publishers only receive payment if a user clicks on a displayed advertisement. Therefore, the price of an ad must be weighed against the probability of converting the ad into a click from the user.
Sylvester goes on to explain this concept with the following example scenario:

“[A] bidder has an ad that is simply a white box with nothing inside of it. The bid payout for this ad is $0.50 if clicked.

Another bidder that was outbid by the above ad was for coffee while the end user was at a bookstore. The bid was only $0.30 if clicked.

Assuming the white box has a click through rate (CTR) of 0.1% due to curious people and accidental clicks this equates to an eCPM of $0.50 for 1 click per thousand impressions.

Now assume the second ad won. It could have a much higher CTR of, say, 5% due to its relevancy. Based on this CTR the developer would have an eCPM of $15 for the 50 clicks at $0.30 cents.”

The above example is dramatic, but it clearly shows the issue with traditional RTB practices. To summarize, the highest bid is not always the most profitable. This means that publishers should take relevancy into account when deciding which ads to display in their apps.

Enhanced Real Time Bidding

AdAbouts turns the tables on RTB by focusing on ad relevancy rather than the price of a bid.

The Efficiency of AdAbouts

AdAbouts turns the tables on RTB by focusing on ad relevancy rather than the price of a bid. This philosophy is important because, as the example above shows, revenue is about click through rate, not necessarily bid price. To maximize CTR and generate the most revenuefor both developers and advertisers, AdAbouts improves upon the two traditional variables associated with RTB (price and location).
First, AdAbouts is revolutionary in that it condenses multiple ad networks into one program for easy comparison. So, instead of taking bids from advertisers in succession, AdAbouts simultaneously receives bids from all interested advertisers. Resultantly, greater transparency and competition leads to higher bids.
Secondly, AdAbouts uses a different type of location data gathering software called Location 2.0 Technology (patent pending). Whereas traditional RTB location data focuses on geographic coordinates, Location 2.0 focuses on the immediate environment of the mobile phone user. In the example above, AdAbouts would deduce that the user is inside of a bookstore, a fact that makes a coffee ad more relevant.
Thirdly, AdAbouts measures and monitors ad content over time and applies a Value Score to the advertisers content which measures relevancy and effectiveness in determining which bid wins the AdAbouts Enhanced Real-Time Bidding auction.
The result of these three tactics is advertisements with more relevance to each individual user which equates to more clicks which leads to more profit.

Win At RTB with AdAbouts

Real-time bids for mobile advertisements are placed billions of times a day across the globe. For a publisher, the potential difference in revenue that can be obtained by using AdAbouts advanced metrics is staggering. And for advertisers, the increase in ad impressions can be equally as steep. Take it from AdAbouts developer Richard Sylvester, “The highest bid doesn’t always win, the most relevant ad does.”
AdAbouts is the future of mobile advertising, and, in the future, everyone wins.

What’s The Craze With Location Based Targeted Ads?

AdAbouts Location based advertising.
Imagine yourself walking in the mall during lunchtime. As you walk by the food court, you receive a notification on your smartphone from a Japanese restaurant stating that if you drop by within the next 15 minutes, you’ll receive a 30 percent discount off their lunch menu. Meanwhile on the other side of the mall, a woman walking near a shoe store sees a personalized message pop up on her phone, alerting her to new sales in the spring boots collection, something she was interested in.

If this situation has happened to you, then you are in the realm of location-based advertising. A new technology that marketers and advertiser are using to show their ads to the right people, at the right time and at the right place. This means that mobile users, like you and me, will be able to see ads based on our genuine interests along with places and businesses we frequent in the physical world.

Currently, several companies are working on the development of this new technology in which most of them are partnering with 3rd party apps and publishers to get access to mobile users’ location data. Advertisers and marketers use this data to analyze customers’ location and context so they can build consumer profiles based on their behaviors in the real world.

With all this in mind, this technology doesn’t sound all too bad, but let’s take a brief look at the financial perspectives, benefits and downsides in location based advertising.

First of all, it is worthy to mention the results from a recent report by Interactive Advertising Bureau (IAB) and PwC. This report showed that in the United Kingdom mobile ads make up 23 per cent of the £7.2 billion that was spent in 2014 on digital marketing. Perspectives are not less favorable in the United States, in which according to BIA/Kelsey location-targeted mobile ad revenues are projected to grow 35% annually from $4.3bn to $19.3bn during the 2014-2018 period. According to estimations made by eMarketer, it is expected that in 2015, global mobile ad revenues will hit $65bn with $28bn coming from the US alone.

Considering the financial perspective, this will not only benefit big marketing companies and brands, but will also be favorable for small to medium size businesses that want to drive more in-store visits and increase their brand awareness.

The highest accuracy in location based ads

On the other hand, everybody is getting benefits in the game of accuracy; including mobile users like you and me, who will receive relevant ads that will match our interests and desires with discounts and coupons. With this in mind, location-based ad technologies will enhance our shopping experiences through a more personalized service and access to discounts and deals.

As a matter of fact, users are already showing a growing acceptance towards location-based targeted ads in exchange for relevant shopping benefits . In the most recent report from Cayan “State of Payments Industry”, 78 percent of consumers are interested in using their mobile phones while shopping to get deals and coupons. In another study, conducted by ReasearchNow and Swirl, 77 percent of individuals would be willing to share location data with merchants in exchange for something valuable whereas, 50 percent of people polled by Cisco assure that discounts represent an incentive to share personal information.

All together this technology sounds like a great deal for businesses and mobile users but there are still many challenges to conquer. One of them is concerning privacy, especially for those who are non technology natives or half technology natives; who tend to perceive location-based targeted ads as intrusive and invasive with their personal info. The other issue is accuracy, even though many companies have invested time and money in the development of different platforms and proprietary algorithms to narrow location accuracy, ads are often sent to the wrong people at the wrong time and hence, budgets are being wasted as a consequence of this.

Happy customers
The solution to these problems could be laying in the capability of matching the right customers to every product and also offer marketers the tools to refine their campaigns so they show meaningful ads that connects to their customers’ interests and needs. It is also key to understand that not only is location accuracy important but content as well. Mobile users want to know what deals are available but they also want to feel connected with merchants and the brands they root for. For this reason, analytics and insights are as relevant as location accuracy.

With location based advertising, we will be able to receive ads, discounts or coupons based on places we go as well as our behavioral and search interest. In this way, merchants and brands can measure, analyze and create customer profiles to drive us into the right stores. This is a strategy to compete in the growing online market and connect more with customers.