Location Sciences Group – Verify

Industry Consolidation and the Impact on Data Quality

Last week saw the merger of several location data suppliers. Foursquare, Placed and Factual have formed a combined company pledging to explore the power of location data. Location data leader – PlaceIQ – also announced a merger with Toronto-based location data and measurement company Freckle IoT.

The announcements come months into coronavirus and its impact on global movement, nearly two years after the introduction of GDPR, and less than a year after critical US privacy announcements impacted scaled access to the reliable location data used for advertising.

Consolidation can strengthen companies through shared knowledge and resources. And, in these instances, it could create genuine rivals to Google and Facebook in location-based ad targeting services. Conversely, consolidation can also bring about challenges in transparency, quality and fair play for competing players in the industry.

In addition to privacy’s impact on location data specifically, just last week the Media Rating Council (MRC) issued a notice to advertisers and media partners to apply “objective criteria” to data impacted by coronavirus. Location data has been noticeably impacted as lockdown impacts most of the country and beyond. Our own research has observed a continued decrease in the use of accurate and authentic location data across the industry due to privacy, fraud, and poor attention to quality. The trend has shown a dramatic impact to long tail location data players – making these recent mergers and acquisitions no surprise.

Considering the importance of location data, coupled with new dynamics impacting its availability to suppliers, consolidation should leave many location marketers intrigued. They should also, however, be wary of the larger implications data cartels can present to transparency, competitive play, and performance.

So, how should brands work with these consolidated companies to deliver the highest levels of trust and accountability?

Minimize conflict of interest:

A large majority of the market relies on a combination of all five of these companies for either store visitation insight, or location behavioural audiences.

The processes and data sets used to deliver each of these solutions are often the same. While Foursquare and PlaceIQ have wisely offset their former paid media services, integrating Factual and Freckle as additive elements of these data cartels represents a major challenge to transparency and trust in data usage.

Overlap between the performance attribution the companies represent, alongside their audience data assets, signals the potential for sizeable conflict of interest. As the MRC suggests, ensuring an objective criteria and evaluation of the mutuality of each company’s services is highly recommended – particularly considering the larger trends in location data availability and quality today. 

 

Integrate more quality control requirements within your DSPs:

Many of these suppliers have long been preferred data options in DSPs, with a simple drop-down menu attached to a media buy. On a day-to-day buying basis, programmatic traders are required to make fast yet critical decisions on what data is applied to reach the location sensitive audiences important to brand marketers business objectives.

Ease of access can frequently become more important than quality of the actual data. Ensuring that your DSP partners are presenting you and your buyers with regular transparency and accountability audits of these newly combined data entities will be critical. Otherwise there is a sizeable risk that simple consolidation will make it easier for traders to avoid more qualified, yet smaller and competing data sets.

Get more performance with smaller budgets by auditing regularly:

The advertising industry is going through a huge period of change. In addition to consolidation, cookies are moving into walled garden controls, new privacy settings are being launched, Google is packing its ADH and its cloud service into DV360 audience buying, and the coronavirus crisis is limiting data supply.  Most marketers are now left at the mercy of a fast moving yet less transparent data marketplace – in a time when transparency can be one of the industry’s biggest competitive advantages.

There aren’t enough resources nor time to watch every single dollar, every single data signal, and perfection just isn’t an option. Just as in sports, there will always be some players that cheat the system – but applying regularly scheduled audits of fair and transparent play by your data suppliers will become absolutely necessary as marketing budgets take a hit in 2020, and likely into 2021, due to the impact on our economy.

As the industry struggles to make up lost revenue, consolidation, hidden arbitrage, and decrease in quality are easy ways to make up the difference – on your dime.  Don’t allow it; integrate auditing processes that keep your business on track during these trying times.