Targeted Mobile Advertising – Are We Being ‘Watched’?

Photo Credit: iStock.com/Artist’s runeer

One thing that always bothers me while using an app or playing games on my smartphone are the annoying ads that inadvertently pop up. I am sure it happens to every one of you as well. Just when you are about to cross that ‘mega-difficult’ level of Candy Crush Saga or about to headshot the enemy in Call of Duty, an ad appears out of nowhere recommending you to try another app or view a product.

But there is one intriguing thing that I noticed about these ads. All of them, in one way or another, relate to me. How do the advertisers recommend me an outlet that is nearest to where I live? How do they know that I am a designer looking for apps related to my field? How do they know I regularly visit Starbucks on my way to work? Are they spying on me?

How Do They Know About You?

Curious to know how to these mobile advertisers know so much about me, I started searching for answers. While searching on the internet, I stumbled upon a very interesting and informative article, Mobile advertisers: What do they know about you?, by Rani Molla from Gigaom that explains how companies use location data to help mobile advertisers in sending targeted ads.

Turns out mobile advertisers don’t know as much as we think. It is rather based on algorithmic inferences of mobile phone data collected by data analytics companies from various sources, some of which include:

•IP Address: One of the most common information that your mobile phone data gives out is your IP Address. However, this only lets the data analytics firm predict your location to up to 100 km. Most of the location data obtained from IP addresses isn’t useful for mobile advertisers.

•Cell Towers: Cell towers enable the companies to pinpoint your location to a 1000 meter-radius. For instance, if are near a cell tower GSM network in Manhattan, the data analytics will predict your location within a 1KM radius of that tower. So this also doesn’t give 100% accurate location to mobile advertisers.

•Wi-Fi: – Many ad supported apps and mobile sites can predict where you are sitting using a technique popularly known as Wi-Fi sniffing. This involves discovering and sharing of Wi-Fi location data that can allow prediction of location to a 100 meter radius.

•GPS/aGPS: This is the most effective and accurate ways of knowing location data is through Global Positioning System (GPS) and aGPS (assisted GPS) that can predict location as close as 10 meters. Most smartphones are equipped with either GPS or aGPS that allows apps to triangulate your exact location.

Moreover, with apps like Foursquare and Facebook that allow you to ‘check-in’ to places, data analyzing firms can predict your demographics, shopping habits and places of interest.

What Are The Benefits?

So how does location data help mobile advertisers in their marketing endeavors? Here are a few benefits of using targeted approach in mobile advertising that are in a way favorable for mobile users as well.

1. Giving customers what they want:

In the conventional ‘push’ advertising, advertisers usually bombard products and services to the audience irrespective of the target market. However, when mobile advertisers know more about users’ demographics and lifestyle via location data, they can offer them with what they exactly want. That means the mobile users will also be getting less irrelevant ads and more productive ones that appeal to their needs and way of life.

2. Avoid unresponsive audience:

Through detailed location data, mobile advertisers can also avoid targeting to that particular segment of the audience who are unresponsive to their marketing gimmicks. This way, not only do they save the time and effort of reaching irrelevant viewers, they also end up saving thousands of dollars.

What are the Drawbacks?

Even though targeted mobile advertising has its benefits for both marketers and users, it can be quite a turn-off. Here are a few drawbacks of this approach.

1. Accuracy of Data:

From a mobile advertiser’s point of view, there is the issue of location data being accurate. The data analyzing firms might be able to pinpoint the exact location of the mobile user, but all other psychographics such as shopping habits, eating preferences, frequent visited places are based on algorithmic assumptions.

2. Privacy of Data:

The biggest concern from a mobile user’s perspective is the privacy of data. Is the average user comfortable with data analyzing firms scooping into information about where they are and what they are doing? As if it’s not enough that we have to live with the fact that Old Uncle Sam keeps a watch on us 24/7, nobody would want another ‘spy’ on their tails.

Are We Ready for Targeted Mobile Ads?

As technology continues to grow like Topsy, information security and privacy protection become more and more challenging. Even though targeted advertising through location data has its perks for both marketer and users alike, are we really ready for such contemporary form of mobile advertising at the expense of our private and confidential information?

What is your take on the subject? Do you think that collection of location data without user consent is unethical, if not illegal? Or are you in support of targeted mobile advertising even though it trespasses on your privacy?