With over 770 million GPS-enabled smartphones, location data has begun to permeate the entire mobile space. The possibilities for location-based services on mobile go beyond consumer-facing apps like FourSquare and Shopkick. It’s powering advertisements, and many other services — from weather to travel apps.
We specifically examine how location-enabled mobile ads have generated excitement, look at how location-based feature have boosted engagement for apps, and demystify some of the underlying technologies and privacy issues.
Take a look at this graphic:
A pure GPS approach and the “lat-long” tags it generates is considered the standard for location data.
But there are at least four other methods, sometimes used in combination, for pinpointing location:
- Cell tower data: When GPS signals can’t reach the device’s GPS chip, which often happens indoors, the device will often report its location by communicating with the cell tower it’s connected to and estimating its distance. It’s less accurate than pure GPS data.
- Wi-Fi connection: It’s an accurate method but requires an active Wi-Fi hotspot. Wi-Fi locations are matched with GPS coordinates. It can pinpoint a user to a specific storefront, which is why many retailers are rolling out free public Wi-Fi to enable in-store mobile ads.
- IP address: Location can be gauged by the IP address associated with the data connection. The accuracy of this approach varies between carriers, and is far less reliable than the above methods.
- User-reported: When users sign up for emails or register for mobile apps and services, they often enter their addresses and zip codes. This data can be translated into GPS coordinates to build a geolocation profile of a single user or user base.
The ability to collect user location data and track it has raised some concerns over privacy. However, Android and iOS give users the ability to opt out of location tracking altogether via their settings.
As we detail in our report, there are many opportunities emerging from this new local-mobile paradigm, including location-enabled mobile ads, search, and features that boost engagement for apps.
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