Advances in mobile advertising have allowed advertisers to target users at very specific locations with the help of reliable geolocation data. This information enables advertisers to serve highly personalized ads based on a user’s zip code or even proximity to store entrances. Ad requests that deliver geolocation data not only provide more transparency, but also make the inventory more attractive to advertisers. As a result, these ad requests typically pay a higher CPM, making it a win-win situation for both the advertiser and the publisher. However, keep in mind that the source of the geolocation data plays a factor as some tend to be more reliable than others. The most common sources of geolocation data are: GPS, IP-derived and user provided.

GPS Geolocation
In most instances, GPS geolocation data is considered the most accurate as it’s sent directly from the mobile device. However, some apps may use a cached GPS location rather than the device’s current location to save time. When a previous GPS location is used, depending on how long ago it was last retrieved, the data can be highly inaccurate, rendering it useless to the advertiser. Some apps will set the GPS location when the app is first installed and never bother to update it again if the app doesn’t require geolocation data to function. Other apps may retrieve geolocation only when the app is first started and will maintain that location data until the app starts again, or until some specified timeframe expires and it is retrieved again. Apps that require location data to function, such as a weather or dating app, typically have much more accurate GPS data because it is updated more often.

Identifying inaccurate GPS data is difficult; in general, an advertiser must assume that location data is being retrieved each time an ad request is sent so it can be relied on for targeting purposes. On the publisher side, having inaccurate geolocation data can hurt their bottom line. When an advertiser runs a campaign that is geo-targeted at users within a certain radius, they expect a certain number of conversions under the assumption that the users are actually physically nearby. However, when the data is erroneous, the ads are shown to the wrong users, resulting in low conversion rates and possible early termination of the ad campaign.

Takeaway: Publishers passing GPS geolocation data in ad requests should make sure that the data is retrieved as often as possible so the data is as accurate as possible.

IP-Derived Geolocation
Geolocation derived from an IP address is less accurate than GPS data, and thus considered less valuable. Deriving the geolocation from an IP address involves the process of retrieving the mapped location of an IP address from a third party source. Unfortunately, the degree to which a third party database can provide an accurate location is limited. Many times, the IP addresses are mapped to cell towers or data centers, which may be miles away from the user’s actual physical location. If an advertiser is attempting to target users within a very limited geo radius using this data, the ad campaign’s performance can suffer. Therefore, it is critical that the IP mapping database be kept up to date; otherwise, the geolocation can become outdated quickly. While inaccurate IP-derived geolocation is easier to identify, it typically requires a third party service to do so.

Takeaway: Publishers who must derive geolocation from the IP should make sure whatever mapping service they use is up-to-date to ensure accuracy.

User Provided Geolocation
User provided geolocation data can be passed in the ad request without designating where it originated from. The data could be GPS and may be accurate, but could also be derived from an IP address which is less regarded. Because of how difficult it can be to determine its reliability, advertisers may refrain from using this information.

If passing data this way, publishers should follow the same best practices listed for GPS and IP-derived location data to maintain accuracy.

Due to the various sources geolocation data can originate from, many advertisers now request the geolocation source be passed in the ad request in order to determine accuracy of the data. Typically the source is noted as either GPS, Derived from IP, or User Provided. There can be varying forms of accuracy with all of these sources, but providing transparency to the advertisers allow them to make a more informed decision on how reliable the data can be.

By providing transparent, quality and accurate ad inventory, publishers can command higher CPMs and earn increased ad revenue. Publishers who cut corners in these areas will be exposed and their ad inventory will likely end up being filled at a much lower rate. It only benefits publishers to be as transparent and accurate as possible with advertisers. It will not only increase their bottom line, but also help to establish a trusting and long-term relationship. Additionally, it helps to clean up the mobile ad space and provide a better user experience for those who are shown geo-targeted ads.