Blog skyhook logo 2017 Predictions: Advertisers Get Smart About Location

Dec 29, 2016 8:00:00 AM

2017 Predictions: Advertisers Get Smart About Location

Posted by Skyhook

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The tech world saw explosive growth this year, with especially creative uses for location services emerging. Based on our customer feedback, product growth and location data challenges in 2016, we have a few ideas on what the next year has in store for industries like IoT and advertising.

Our Product, Sales and Innovation teams weigh in with a few predictions:

dynamic user experiences with good location1. Retailers Will Make Real Use of Location-Derived Analytics

"A shift happened this year from explaining to retailers why location data was highly useful, to now making moves to integrate providers and using data to do complex foot traffic analysis," claims our VP of Product David Bairstow. The hurdles of the past have been “why do I need this data?” But now retailers are asking “how do I get this kind of data?”

The result? "2017 is the year where location-derived insights start to drive retail strategy," said Bairstow. Retailers will look to insights from initial tests to learn what drives traffic to their stores, and the second half of 2017 will have retailers going for a full location tech implementation.

2. Foot Traffic Attribution Takes Off Without Beacons

The model of beacon usage is changing, but what’s interesting to us is how the pricing model is changing. In terms of measuring attribution, it’s tough to monetize and justify the massive investment in installing hardware across all stores (and the maintenance of that hardware as beacons die or new stores are created). Retailers will begin to ask, is this worth it?

icon_larger_shop-attributions.pngWe’ll see a resetting of the stage for the next phase of growth. If we’re going through the hype cycle, we’re now in the trough of disillusion where companies that invested heavily in owning the space start to take off or fail.

"But that’s where the beauty of a Wi-Fi based system comes in! You can deploy infrastructure that supports your current mission and make location tracking better, enabling beacon-less foot traffic," said Skyhook Chief Developer Evangelist Kipp Jones. "Retailers may not actually be looking for aisle by aisle foot traffic, but rather 'did this person come into my store? What traffic went by my door?'"

3. Advertiser Knowledge of Location Matures

Disruption in location is needed. By 2017, advertisers knowledge of location will mature and we anticipate seeing more innovative campaigns and best practices for location and behavioral targeting emerge.

Matt Kojalo, VP of Adtech at Skyhook says "‘Close enough’ won’t cut it in 2017 when it comes to location. “Bad location” can no longer be passed off as REAL location.  Accuracy is required for both the location and the venue to create behaviors and perform proper attribution."

Street Addresses mapped to a Lat/Long or IP derived location are just not real. Advertisers are starting to realize this and will notice more in 2017.

On the mobile front, more apps will be asking to keep location permission on – Uber is one example of this new trend. The result will eventually lead to less stringent regulations around using location for advertising. It remains to be seen whether or not all that data will improve user experiences.

4. New Contextual Use Cases Emerge With Weather Data

You may see weather data getting sucked into enterprise or brand use cases: smarter cities, smarter ads, everything!

"Retail can be affected by weather both on the advertising or operations side. For example, if you know there’s a storm coming, you may not staff your store as heavily. Or retailers will want to see how weather patterns affect certain demographics," said Cindy Chaw, VP of Global Partnerships.

5. IoT: Marketplaces or Platforms Mature

We’ll see big players like Amazon and IBM start to harden their solutions, and then we’ll see standards win out and common protocols win out. We suspect this will all happen at the start of the year. This is when we see the fallout of everyone trying to jump into the market in a year and a half - we’ll start to see the results of company investments. Already we’ve seen a number of smaller players in the space put in significant investment in their technology, only to go out of business or sell off their assets to a bigger player.

Our Big Prediction

Location - and the emphasis on "good location" - becoming more prevalent. Across industries, we'll see that more and more understanding of consumers will be derived from the places they visit. Brands, Advertisers, Apps and Retailers will want that information to power a slew of new campaigns, use cases and experiences. 

Anatomy_of_Location-1.pngThe companies to win in 2017 will be determined by their ability to understand device location. This extends beyond simple lat/longs - it will also be in how well venues and stores are positioned that provide context to location. There are many data sources to line up to get right, and that data will be important not only for advertising,  but more so for the sake of consumer understanding. Bad location filtering and accurate insights will be of the utmost importance.

One final thought: watch how consumers react to these new developments. Companies that can pay off the value to their users for sharing this valuable dataset will reap big rewards.