Over the course of the past few years, there has been an increase in negative press regarding mobile application and operating system location tracking. Since location tracking often happens in the background, (just check out this story from 3/10) leaving users unaware that their location was being tracked, the revelations from reporting has caused an equal and opposite reaction by consumers and OS providers.

Media Implications Summary: TLDR

Fewer targetable impressions informed by hyper local location signals
In-store attribution winners will be companies with multi factor opt-in and first party data
Each mobile location platform has strengths/weaknesses depending on methodology. They will all be affected, in different ways, by these changes.
Signaling of the eventual changes to ADID regulation, akin to cookie regulation

Details of the Regulation

After changes by the Operating Systems — Apple iOS 13 and Android 10 in 2019 — user controls have been added so consumers can manage how and when they’re sharing data to their apps. Apple’s changes, alone, reduced foreground location tracking by 24% and background location tracking by 68%.

Most recently, in February, Android 11 was released with even greater location controls. App developers must adhere to the following: “If your app requires background location, such as when implementing geofencing, make sure that it’s critical to app functionality, offers clear benefits to the user, and is done in a way that’s obvious to them.” To enforce this, developers must get approved for background location tracking, regardless of OS version of the app. Also, the user has the option to control this functionality at the OS and App level.

We expect these changes to have a similar effect on the volume of location data available from Google’s OS, as Apple’s changes had in the recent past.

How it Impacts you

Inventory

Total data informed mobile inventory will be reduced because data providers can’t validate the location to add their heuristics onto it, with confidence. Likely, the cost of smaller segments and more coveted segments will increase

Audiences

Audiences will be smaller, and companies using third party data won’t have access to the same scale, to make the more complex audiences out of ADID’s tied to multiple locations. Additionally, geofencing will produce fewer biddable impressions, so overall targeting will be affected. The companies with scaled first party or multi-factor opt-in data, to create audiences, will win.

Measurement

Measurement using 3rd party location is similar to building audience. The only difference is there is additional processing involved in separating the attributable foot traffic to devices to remarket.. Therefore, first party data providers that obtain consent, and panel based data providers have a new relevance that was once hindered by scale.

Advertisers should assess their options when measuring site visitation and mobile attribution, and find out HOW their partner collects location data.

Why it all matters

OS updates by Apple and Android provide more user control and restrict the ability for apps to monetize hyperlocal location data.
Audience creation and measurement are severely affected by data paucity.
Privacy and user consent is only going to increase in velocity so working with reputable companies that will be less hindered by these changes is important
Eventually, changes to ADID’s (the mobile cookie) will likely be similar to changes made to Safari and Chrome cookies over the past few years, making it necessary for technical advancements like clean rooms and data hubs to be made available for mobile attribution and ID obfuscation.

The industry is heavily reliant on the data provided by mobile – location or otherwise – given mobile is ⅔ of digital ad spend. Therefore, progression to major change will be slow as to not disrupt commerce. However, advertisers and agencies need to begin to prepare for a world with less location data and an inability to port ADID pools anywhere across apps and sites, in the near future.