As mobile location data evolves beyond just ad targeting, contributor Eric Aledort takes a look at how it’s being applied across the entire enterprise, from urban planning to the pricing of real estate.
More and more marketers are using mobile location data to target their ad spend: In 2015, eight in 10 marketers worldwide used location targeting for mobile advertising, according to eMarketer. In the near future, mobile location data will saturate media buying and attribution reporting in the mobile-first era, becoming a fundamental characteristic of advertising.
But that’s only a partial view of its bright future and potential. Location data is already evolving beyond ad targeting to become a core asset informing strategic decisions across the entire enterprise. And as the use cases for location data expand, so too does the variety and number of enterprises that can leverage it.
In the next few years, mobile location data will continue to expand its reach throughout the rest of the enterprise. It will play a bigger role in the placement of stores, the pricing of real estate, even the layout of cities and transit lines. Here are a few near-term use cases where we are already seeing signs of adoption.
Visitor bureaus and tourism boards spend millions each year promoting their cities as travel destinations, but the return on that spend is difficult to measure beyond general metrics like hotel occupancy and flight bookings.
Companies like Arrivalist are certainly moving in that direction, and that’s helping allocate spend. But moving beyond the measurement of ad dollars, location data can provide travel bureaus a much more granular understanding of what drives travelers to their destination, and allow them to compare that data against other destinations within their competitive subset.
If you’re a city like Columbus, Ohio, you might be looking at Cincinnati, Indianapolis, maybe even as far as Denver, and asking, “What is similar? What are the things that only my city has? And what are the things they have?”
Mobile location data can map the foot traffic trends and deliver a better understanding of what’s motivating travelers to each destination, giving Columbus, for example, much better insight into how to sharpen their competitive edge and attract new business.
Public transit agencies and urban planners
Urban planning, particularly around transportation infrastructure, is one of the most consequential and high-stakes arenas in which mobile location data can play a large role.
Decisions about where to build transit lines and transit paths for driverless cars, where to redirect freeways and where to place parks or schools should be based on the most granular possible understanding of human movement patterns. But in these cases, the data capture mechanisms lag behind the sophistication in how to optimize planning around that data.
Car location data provides one key element, particularly for roads — but what about cities like New York and San Francisco, where cars are not the predominant mode of transportation?
As cities across the country continue to prioritize sustainable planning solutions, understanding where people walk, bike, run and sit is just as crucial as knowing which bus they take or freeway they drive on. That should give cities and urban planners a strong incentive to look at mobile location data.
Real Estate Investment Trusts
Real Estate Investment Trusts (REITs) are becoming more sophisticated in how they select and pool their real estate holdings, but mobile location data (read: foot traffic) is not yet a core component of their algorithms.
Consider, for example, a REIT that owns a large portfolio of triple-net-lease pharmacy and retail locations across the US — traditionally very safe investments because of their long-term tenants (CVS, Walgreens) and because of their locations within core business districts. A REIT’s own algorithms might assume a gradual appreciation of those assets, consistent with previous trends.
However, a closer look at foot traffic trends could indicate that certain locations within their portfolio are seeing dramatic drops in visitation rates, perhaps due to shoppers migrating to online solutions. Because the threat to Macy’s and CVS posed by Amazon might be priced into their equity price, it’s still not priced into the underlying real estate that they’ve occupied for decades. Seeing that foot traffic change in advance could save the REIT and its investors millions by giving them a clear indication that it might be time to sell.
Right now, the benefits of location data are accessible only to those organizations that have made sizable investments in sophisticated tech stacks and large data and analytics infrastructures. Retailers, Quick Service Restaurant chains (QSRs), auto dealerships, hotels and other large-scale brick-and-mortar enterprises have become early adopters and are already reaping the benefits. These organizations also already had large marketing departments with talent and experience in using location data to target ads.
For mobile location to make the leap to this next generation of enterprises — the ones without huge marketing infrastructure — the key will be providing elegant visualization, ease of use and user experience. As soon as location data becomes actionable to the non-expert, the possibilities begin to multiply.
Mobile location data today is predominantly a data point for the targeting of advertising. With imminent improvements to access and ease of use, it will soon evolve into a critical form of business intelligence readily applicable across the entire enterprise, across many diverse lines of business. This is just the beginning.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.