By definition, advertising is a form of communicating with a customer with the aim of selling them a product. This definition might sound very simple, but in today’s data-driven world, when every decision, every action is based on analysis of some sort of data content, advertisers are going the extra mile to deliver personalized impressions and to add a value that will win over their prospects.

Having that goal in mind, companies very recently started investing in location-based advertising. Urgent demand for location-targeted advertising has been caused by changes in mobile users’ commercial intent and advertisers’ evolution to align with that behavior. Although the costs of mobile location-based advertising are still relatively low, according to the marketing and analyst firm BIA Kesley, they are expected to grow from $12 billion in 2016 to $32 billion in 2021, climbing to 40 percent of overall mobile ad revenue by 2020.

The influence of location data

“Location” has become a huge part of our daily lives. We check-in to restaurants on Foursquare; share our location with friends on WhatsApp; tag photos to show where we have visited on Instagram. By analyzing people’s real-time location in addition to their social behavior and navigation through the web, advertisers are able to send localized ads to the targeted audience. Today, this type of ad plays a significant role in driving the path to in-store purchase and they are specially important for small to medium size businesses, as they are now able to target potential customers who are within arms’ reach of their stores.

There are three kinds of location data, which are used to optimize ad campaigns:

1st party location data – data is collected directly from the audience, for instance from the device itself, via user registration forms or by transforming an IP address into location data.

2nd party location data – someone else’s 1st party data.

3rd party location data – data is collected from a 3rd party such as a data provider or data aggregator. It is typically purchased on a large scale and it gives the sheer volume of user data you can access.

When working with 1st party location data, publishers are aware of how and when the data is collected. On the other hand, in the case of 3rd party data, they do not have that sort of insight. Therefore, if you want to improve advertising performance and relevance, it is crucial to ask the following questions when evaluating the data provider:

  • How are they collecting the data?
  • How do they transform raw location data into useful data?
  • How is data refreshed and maintained?
  • How accurate is the data?

To explain the effectiveness of targeted marketing with the right data and how personalized ads affect customers’ or business owners’ real-life activities, let’s consider the following two scenarios:

  • Imagine you could detect a long waiting time in a local competitor’s store, and you could serve ads for your business directly to the customers waiting in a line or inform a customer who was just about to set foot in the competitor’s store about your new offers and promotions.
  • Or, for instance, if the crime rate in a certain area has risen recently. A home security company could use that information and tailor an ad that will be pushed only in the evening to the targeted audience within a 5-kilometer radius.

In order to produce and deliver effective and valuable ads, advertisers must rely on accurate and reliable location data. Otherwise, it could have a negative impact on their campaign targeting approaches.


Location-based services are opening a world of possibilities in the marketing industry. The omnipresence of location services has already surpassed the need for a business to be merely present on the map—the latest geo-targeting trends require highly precise and up-to-date location data to gain market advantage. Geo-targeting and geo-fencing rely on very precise and accurate data to create virtual perimeters around businesses, areas of interest, or even temporary events, to serve relevant information to customers. Backed by real-time feedback data from social networking sources, they can be a powerful basis for building a new generation of highly responsive micro-marketing campaigns.