COVID-19 shook up location data, and the changes it wrought are here to stay

Ad Age’s Where Series examines the unprecedented challenges facing marketers and offers a look at where the industry is going in 2021 and beyond. In this first of four quarterly reports, we highlight consumer data trends and how they will impact the customer experience.

 

In a post-COVID world, the physical location of customers could prove a valuable source of data, helping businesses translate pandemic data into retail sales. 

A year of people online shopping and binge-watching amid lockdowns was something of a boon for companies in the business of collecting customer data. People around the globe were stuck at home, conducting life from their screens and generating terabytes of first-party data that Orchid Richardson, senior VP of programmatic and data at IAB, calls “the big explosion.” 

But as the world slowly starts to re-open, with people increasingly offline and using devices less, experts say that fire hose of pandemic data could start to taper off, revealing new battlegrounds in the fight for customer data. 

“As customers venture back into the real world, how the hell do you make sense of that change,” says Rob Jonas, chief revenue officer at Foursquare. “We’ve got a backdrop of every business realizing that data is a critical way of managing business, and location is critical to that.”

Customer data, after all, is the lifeblood of modern advertising, the metric by which publishers are judged, the currency traded between ad tech companies, and the source of ongoing fights about privacy and customer consent. Legislation and the scramble for a new advertising identifier has only highlighted the importance of first-party data—the same type of data generated in droves by the pandemic.

Applying the wealth of data collected during the pandemic requires it to be refined and properly managed.

A dramatic change in business

For companies that collect and process customer data, COVID marked a dramatic change in business. “Thanks to COVID, suddenly everybody had to come to terms with the fact that consumers were moving around and changing their behaviors in new and completely unpredictable ways,” says Drew Breunig, exec VP strategy, PlaceIQ, which provides location intelligence to its clients. The firm saw different behaviors in consumers across the country, across counties, and even across households in the same area.

We can ascertain the level of risk [a consumer is] willing to take,” says Breuni. Using that information, a grocery store can target consumers who are more willing to venture out with in-store deals, or target consumers who remain in isolation with pickup or delivery options.

Mark Read, chief executive officer of WPP, says his agency group has been testing postcode-based targeting, in which users are targeted by the area they live in.

Location as a filter for data hygiene

Location data is also proving useful in helping filter out the massive amounts of first-party data generated by the pandemic. Netflix, for instance, is obtaining valuable first-party data on its users, but with children moving in with parents and other family members hunkering down together, that information is cluttered by other members of the household. Most people share accounts, says Steve Silvers, senior VP and general manager, marketing solutions, Neustar. It’s still first-party data Netflix is collecting, but with different household members using the same account without bothering to switch profiles, the data can be cluttered and useless, he says. 

“Brands are sitting on these huge oil fields of data, but you can’t take it out of the ground and stick it in your car,” says Silvers. “It needs to be cleaned up, refined, processed.” Most people tend to have at least three separate email addresses and one or two phone numbers, he says, which for ID-based solutions would create five distinct profiles alone.

There are some solutions emerging. Some companies, like Neustar and TruOptik, are tapping into their own wealth of location data to define households and reduce ambiguity. Neustar says it has an offline graph of every person in the United States after its 2011 acquisition of customer identity business TARGUSinfo. By matching raw data against households, Neustar says it is able to refine data and make it usable.

Even broad location information that identifies a user’s region can be helpful. “If we get the same email address in New York and California, then it’s useless,” says Silvers. “If we get it in two locations, you have to discount that data unless you get something that corroborates that data.”

Location and the return to in-person

Location data companies are not worried about the return to in-person. “The two biggest fears I hear are flip sides of the same coin,” says Breunig.

Companies that have done very well during the pandemic, such as value-oriented retailers like the Dollar Store and home-improvement retailers like Home Depot, are worried about hitting the same growth goals they managed during the pandemic and will rely on location data to help achieve that. Meanwhile, companies that have struggled because of COVID-19 closures and relied on location data to reach scarce audiences during the pandemic are likely to continue relying on location data. 

The beginning of the end of the pandemic means more people moving around, creating an opportunity for companies that deal in location data. 

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