Don’t let location data quality become an ad fraud–sized crisis

Location-targeted ad spending in the US is expected to hit $38.7 billion in 2022, up from $17.1 billion last year, according to research firm BIA/Kelsey. What may be a shock to marketers is that a significant chunk of that spend — anywhere from 30 to 80% — is currently being wasted on inaccurate, poor quality, and fraudulent data.

While this potential loss is a fraction of the $44 billion that Juniper Research predicts advertisers will lose to ad fraud by 2022, it is still an alarming number — particularly if you are among automotive, quick-serve restaurants (QSR), retailers, or other businesses that rely on the effectiveness of location-based advertising to drive traffic to your brick-and-mortar locations.

Although the industry has made inroads in the fight for greater viewability and ad fraud protection through verification platforms such as IAS and Moat, it took too long. Meaningful change didn’t happen until brand marketers woke up to the issue and demanded it. Must we wait for a Marc Pritchard equivalent to declare enough is enough? If change won’t occur until brands speak up, then let’s start that rallying cry right now.

A quick history to avoid repeating it

Brands and publishers alike embraced programmatic as a godsend at first. Brands could more easily identify and target their desired audiences, while publishers could more efficiently monetize their inventory.

As time went on, people, including fraudsters, realized how little oversight there was. Industry watchers and publications revealed the billions those fraudsters were stealing from brands. But it fell on deaf ears.

The reasons? To oversimplify a few: businesses and the people behind them were making tons of money from programmatic advertising. No one wanted to rally for transparency solutions that would shine a light on problems with their own solutions or practices. No agency employee or brand marketer wanted to be the one to raise his or her hand and say, “Oops. I may have wasted millions on fraudulent advertising.”

It took high-profile scams like Methbot and investment embargoes from brands such as P&G cutting their digital marketing expenditure and demanding reform, for change to happen. Pritchard’s rallying cry about the preposterous amount of money P&G was potentially wasting gave his peers permission to take action and start asking questions.

Today, we have verification and ad fraud detection and prevention tools for every part of the digital ecosystem. We have standards and oversight. The battle is not over, but we are making strides, and the problem is, at least, publicly acknowledged. Now it's time to do the same for location-based marketing and the data that supports it.

How to frame the location discussion, without a mea culpa

Location data losses aren’t as big, but they are more than enough to be significant, and enough to encourage people to stay hushed out of fear of repercussions. There are also unique market economic factors at play in which outsized demand for location data incentivizes the industry to pass off subpar data as sufficient in an effort to achieve scale.

The businesses that stand to lose the most from location data inaccuracies and fraud are multi-location brands because they invest the most in location-based targeting. Automotive, QSR, and retail, for example, use location data to drive foot traffic to their brick-and-mortar locations and target users who are within proximity their stores (or their competitor's stores) with relevant mobile-based messaging designed to drive action. With competition from their brick-and-mortar neighbors and fast-moving online brands, now more than ever, companies can’t afford to waste money on bullshit data.

The good news is that it’s still early enough to start asking questions without a mea culpa. Just like the early days of programmatic, we lack transparency. Location data-specific verification tools are emerging, making us smarter and more effective. Suggesting that your team gets serious about location data quality isn’t an acknowledgment of a misstep; it is a proactive measure to get ahead of a growing problem. Do so now, before you get a call from a concerned client or boss.

And that call will come. The media and the industry at large are getting wind of location data shortcomings. Almost daily, business news outlets and trade publications alike are sounding off on location data tactics, privacy issues, and fraud.

News to brand marketers: it’s not your fault that bad data is on the market. But it is incumbent on you to be educated and understand the complexities of location data collection and distribution. If you haven’t already, start asking questions about how your partners source and verify the location data you are using to build your campaigns.

As time marches on and losses mount, it becomes harder to raise your hand and admit you were complacent. Let’s double down on solutions now, so brands can invest in location data with confidence.

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