Location Analytics Is On The Rise

The ability to track location is having profound business impacts


Consumers expect marketing materials to be relevant to them in every sense. They don’t just want things about what they’re interested in, they want things they are actually in a position to use. Four out of five want ads pertinent to where they are, according to Google, while research has found that geotagged Instagram posts get 79% more engagement that those without.

Our location is now easier to determine than ever thanks to mobile. The majority of us share our location multiple times a day through apps such as Google Maps and Facebook, and as our cities become smarter, with more and more sensors being introduced collecting data on the movements of the population, it is only going to get easier to know where people are and are likely to be.

Utilizing this information has seen the popularity of location analytics rise dramatically. Location analytics is the process or the ability to gain insights from the location or geographic component of business data. Forrester estimates that the adoption of location analytics will increase to more than two-thirds of data and analytics decision-makers by the end of 2017, up from less than 50% currently. It can benefit business in many ways, but it is marketers who stand to gain the most, using the information to connect with audiences on a new level. They can, for example, send geo-targeted push notifications to mobiles, which research has found to be 6-8 times more effective than other notifications. Indeed, in a Posterscope survey of 100 marketers, respondents said location data could improve ROI by an average of 60%.

There are, however, issues with introducing location analytics, particularly around privacy and security concerns. There is clearly something creepy about strangers knowing where you are, leaving people understandably reticent to tell them. Important to allaying people’s concerns is tying requests for people to share their location with immediate benefits to them. For example, providing coupons when people check into your store and special offers. MacDonalds has taken an especially interesting approach, joining forces with popular game Angry Birds. Players can add levels to games without paying extra fees simply by logging into the WiFi at certain MacDonalds’s restaurants - who have paid for the privilege as it entices people in.

It can also be used in store to help understand people’s purchasing behavior. One customer will generate more than 10,000 unique data in a single visit from various sensors placed throughout a store, indicating where they will go, at what point they make the decision to pick up an item, essentially re-creating the online shopping experience for the brick-and-mortar environment. US fashion retailer Nordstrom, for example, has spent millions introducing technologies like sensors and Wi-Fi signals into its stores that enable them to track such information. Location analytics firm RetailNext is also tracking over 500 million shoppers per year by collecting data from more than 65,000 sensors installed in thousands of retail stores to provide shops with actionable insights they can translate into better product placement and marketing solutions.

Location data can even be used to understand wider social issues. Tracking the spread of disease has already helped to quash the spread Zika and Ebola, while Chinese internet search giant Baidu has used billions of location records from its 600 million users to better understand the Chinese economy by tracking the number of people around offices and shops to measure employment and consumption activity.

The value of location data is rising rapidly and mobile operators are beginning to realize this by selling the data on. Belgian telco Proximus, for example, recently started to sell anonymous location data about users connected to its mobile network, which it says will benefit marketers and event organisers. Proximus CEO Dominique Leroy listed some of the benefits, noting: ‘Thanks to reports based on mobile location data, they (businesses) can undertake more targeted promotion, align their staff and resources more closely with demand, establish a new business on the best site and manage traffic flows more effectively.’ However, such data is expensive, starting at €700 per report, which somewhat limits the good it can do as it prices it out of the hands of academics and NGOs. As it becomes more popular among businesses, however, this could see it decrease in price, which will benefit everyone.

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