The Bad Data Domino Effect: Far-Reaching Consequences of Inaccurate Location Data | Marketing Maestros | Blogs | ANA

The Bad Data Domino Effect: Far-Reaching Consequences of Inaccurate Location Data

April 3, 2019

By Warren Zenna

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Bad data often goes unnoticed, and when it does, it has far-reaching consequences for marketers. When brands and agencies run advertising campaigns, specifically attribution and other location-based campaigns, they rely on the resulting campaign reporting to inform their longer-term media strategies. However, since as much as 80 percent of location data may be inaccurate, trusting blindly in that reporting is a risky endeavor.

Too often, marketers unknowingly make decisions based on flawed campaigns, and those decisions are costly — wasting countless resources both in the form of human and financial capital — and going unnoticed for months, or longer. This is the bad data domino effect. Here's how it works and how we stop it.

Imagine a lifestyle brand is using location data to inform its campaign targeting and creative strategy. The brand updates its creative based on user location to reflect regional factors, including store locations, area-specific promotions and the weather. The campaign does not perform as well as the brand had hoped. The brand team and its agency partner attribute that to the creative because the delivery report they received from the data supplier showed proper delivery. So, they update their messaging and deploy the ad again. But the problem wasn't the ad concept; the problem was that the location data was in fact inaccurate. Now the brand has wasted money and time deploying a new strategy predicated on bad data.

Versions of this scenario happen frequently. Location data inaccuracies give brands false reads on which markets to invest in. The data also impacts campaign results that affect subsequent decision-making. The biggest cost is to brands who are working from incorrect strategies, thus not generating the results they paid for.

The rippling effect of bad data is especially pronounced on the agency side. When an agency adjusts a targeting or creative strategy, it affects how its employees spend their time and which DSPs and vendors it employs. It is a hard thing to undo. No one wants to raise his or her hand and say, "Hey, I just wasted a whole lot of people's time."

Economic constraints also make it hard to stop the domino drop. That lifestyle brand mentioned above is willing to spend $X to achieve Y. Perhaps its budget isn't enough to procure the high-quality location data it needs, but no data supplier is going to cop to that, because if it does, a competitor will swoop in and promise the brand otherwise. Everyone is forced to take the deal they are given and do their best with the budget they have been dealt.


Here's What Needs to Change

Despite the existence of some great verification platforms currently in market, brand managers have no means of testing the validity of their location data, and most reflectively trust campaign reporting and their agency partners. But brands should be more skeptical.

Location-based advertising is not a transparent market. Suppliers check their own homework. Buyers use different tools to purchase and vet location data from multiple sources, and these tools vary in effectiveness. There are no standards, and for brands, no guarantees that the data they are working from is sound.

Brands need to educate themselves about the realities of the location data space. If a company tells you it can serve your target customer a personalized coupon at the precise moment he or she lifts a competitor's item off the shelf, you want to believe them. But let's face it, many technology vendors will promise unicorn-like outcomes to win business.

Brands should look for partners who are willing to tell them "no" if something is not achievable or if the proposed strategy is unrealistic or if their budget is too small to achieve the desired results. Brands also need more granular tools for analyzing and verifying data so they can understand the type of information they are building their strategy upon. In short, they need third-party tools — and they need to use them consistently in order to educate themselves about what they are buying.

At an industry level, we need transparency, which should result in price recalibration. It costs too much to keep the promises the industry has made to marketers, so agencies and buyers end up turning to cheap inventory to stay within budget. In a transparent market, brands and providers could evaluate the true value of data and make more sober investments.

The majority of companies in the location data space are not bad actors, they are simply responding to harsh economic dynamics to remain competitive. If location-based advertising gets a bad rap, the good will be dragged down with the bad. If brands don't trust location data, they won't want to buy it, which could cause prices to drop even more.

Location targeting and location data insights are a highly effective ingredient of successful marketing strategies. When location data is accurate, it is immensely powerful. We can't rob brands of this, but for location-based advertising to work, brands need tools for understanding their data so they can make the best decisions possible. Otherwise, the dominoes will keep falling.

Warren Zenna is president — Americas at Location Sciences.

The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

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