Location Intelligence and the Riddle of Venue Density

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When used correctly, location intelligence can be a game-changer for brands and agencies looking to improve returns on investment and reach consumers based on where they go.

So what's the biggest problem that savvy marketers overlook? Venue density. Or rather, how location companies providing ad targeting, measurement, consumer analytics and more understand places with many adjacent stores and restaurants packed tightly into an area.

Imagine a retailer trying to understand whether a consumer has walked into its store, the neighboring pharmacy or the gym upstairs. Or a coffee chain with an airport kiosk trying to tell if someone is sitting at the gate, browsing the gift shop or buying a cup of coffee.

With more than 30% of leading retail and quick service restaurants (QSR) venues located in dense areas -- think of any city street, shopping mall or airport -- one mistake can change audience understanding. Insights from bad technology can get baked into long-term marketing plans, quickly multiplying the impact.

So how can marketers leverage location to strengthen ad buys? Here are four questions every marketer needs to ask:

1. What portion of your company's sales come from densely occupied areas? Before seeking out a location partner, brands need to assess what portion of their own sales are derived from shops located in dense and urban areas.

If you're handling advertising for a store with isolated locations the size of a football field, finding a location partner that understands density is not a concern. But, according to Foursquare's location database of more than 105 million places worldwide, over 30% of leading retail and QSR shops are located in dense or urban areas, which means that a large portion of the company's sales come from those locations.

2. Is your location partner hand drawing shapes? Any company can lay out a map and draw polygons of places, but discerning marketers should ask how it understands location beyond a cartographic footprint.

There's too much going on in a dense or urban area to assume that hand-drawn shapes would account for a venue's true "shape."

Phones don't see the world the way people do: hand drawing shapes eliminates the many factors that contribute to a "phone's eye view" of the world. What if a QSR is on the second or third floor of a mall, or if a gym is a floor above a boutique? Hand drawn shapes do not take these nuances into account.

3. Does your location data provider rely solely on GPS? There is much that people don't understand about GPS. In the broadest terms, it is an insufficient signal to solve the problem of location in dense areas. Interference compromises accuracy in dense areas; GPS technology does not account for stops (the clearest signal of intent); and even accurate, two-dimensional GPS cannot identify a venue in a complex space.

Companies providing actionable location insights for marketers and advertisers should be able to interpret a range of signals in order to get a granular understanding of densely laid-out spaces.

4. How does your location tech partner address a place like the Mall of America, San Francisco, or a busy SoHo street? The proof is in the pudding, so give location intelligence providers an example of where your brand is located in a dense area and let them explain their technology, data and findings around specific venues.

No marketer wants to exclude up to 30% of its potential sales, so don't just take a partner's word for it: ask them to prove it to you. There needs to be an honest dialogue around location-based marketing. Since location is not an entirely solved problem, marketers need the right tools and questions to navigate this nascent space.

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