Geotargeted ads are helping brands engage and influence consumers with contextually relevant messages. Or are they? It turns out nearly two-thirds of spend on location targeting advertising is inefficient due to poor quality data and mistargeted location impressions, according to a study from Location Sciences. 

The success of location-based marketing is dependent on the accuracy and quality of location signals brands use. Yet “The State of Location Advertising” found that 65 percent of spend on location advertising is outside of the targeted area or based on signals of insufficient quality to deliver targeting requirements. For every $100,000 spent on geotargeted ads, $29,000 delivered impressions missed the targeted area and $36,000 “was possibly wasted” as a result of insufficient location signals.

Without high-quality location signals, the performance of targeted ad campaigns is undermined. Mobile IP addresses are generally inaccurate for mobile location, making GPS data the top choice for advertisers in quick-service restaurants (QSR) and retail. While GPS is the most precise form of location data, the study shows that some app developers create fake GPS signals to increase ad revenues, with 36 percent of GPS-enabled apps found to display location fraud. 

In order to improve the performance and transparency of location-based digital marketing, advertisers should understand what they’ve purchased and the method used to deploy geotargeted ads. For example, knowing whether the ads are being delivered near the desired location, assessing the quality of the location data being used and determining if the location is actually improving the performance of an ad campaign are factors to keep in mind.

“As with all data, the key to improvement is transparency. Location quality improves significantly with transparency, enabling brands to ensure that the correct quality signals are being used to deliver targeting. Brands can enhance their ability to realize much better performance from location advertising by using the right vendor for them and understanding the data that is being used,” said Jason Smith, chief business officer, US Location Sciences. 

The analysis is based on 500 million digital location-targeted impressions delivered in the UK and US between January and June 2019. Data was collected via a tag embedded in digital creative directly from suppliers.