Paranoids beware: Factual and Smaato partner to better unlock consumer location data for advertisers

By Michael Carney , written on December 3, 2013

From The News Desk

If the hair on the back of your neck is tingling unexplainably this morning, rest easy, I’ve found the source. Two of the most location-aware companies are teaming up to help advertisers better track and target you through your mobile device.

From a business perspective, it makes ton of sense for the global mobile Real-Time Bidding (RTB) ad exchange and Supply Side Platform, Smaato (SMX), to partner with Factual, which operates perhaps the world’s richest location data platform consisting of 65 million local businesses and points of interest in 50 countries. From a consumer perspective, it’s just plain creepy, unless you take the position that if you’re going to be advertised to anyway, those ads might as well be relevant.

Relevance is very much the goal of this partnership. Smaato already collects mountains of data, including GPS data, shared by its more than 76,000 mobile app developer and mobile publisher partners in 230 countries. But to parse that data into meaningful information that can then be matched with targeted advertising, the company needs the computational muscle of Factual’s Geopulse Audience engine.

Factual will analyze Smaato’s data and utilize machine learning techniques to define its audience into over 40 segments including those like household income, gender, age, and zip code, as well as behavioral traits such as business traveler, in-market auto buyer, and quick service restaurant diner.

So the next time you play Pandas and Ninjas or message using Pinger on your smartphone (both are Smaato customers) while scarfing down a cheeseburger between test drives at the Honda dealership, realize that you are telling advertisers more about yourself than you ever imagined.

“Mobile ad targeting has traditionally been a challenge, but by collaborating with Factual, we are giving advertisers an easier, more intuitive way to reach their target audience,” says Smaato CEO Ragnar Kruse. Factual CEO Gil Elbaz, adds, “Location is inextricably intertwined with mobile, and a proper understanding of location can be incredibly powerful if used to deliver personalized content to mobile users.”

And there’s the rub. One man’s creepy tracking is another man’s personalized content, and there’s a valid case to be made on both sides.

If a user is genuinely taking test drives at the Honda dealership, then an ad in their favorite game featuring a 24-hour sale on Toyotas is far more relevant, and dare I say useful, than one for tuxedo rentals at the Men’s Warehouse.

At the same time, targeted advertising reaching highly coveted demographics commands premium CPMs. In a world where consumers are growing more and more reluctant to paying for software and apps, advertising is a necessary evil to keep developers and publishers in business. As we have learned repeatedly with social networks, when it comes to software and the Web, if you’re not paying for the product, you are the product. We as consumers can’t have our free cake and eat it privately too.

So while it may be creepy to know that advertisers know your annual income and your favorite travel destinations, remember that the ads will appear whether they’re targeted, and thus useful, or simply generic, and thus intrusive. And if you really don’t want to be inspected and tagged like livestock, whip out your credit card next time you reach the App Store checkout and opt for the ad-free, paid app – or simply turn off location tracking for apps that have no business knowing where you use them.

We live in an ad-supported world of our own creation. The sooner we acknowledge that fact and learn to bend the system to suit our needs, the better. In the meantime, the publishers are going to continue peering deeper and deeper into our personal lives in an attempt to monetize every eyeball to the maximum extent possible.

Suddenly, that dumb phone doesn’t see so unappealing after all.

(Disclosure: Factual is backed by Andreessen Horowitz, where three partners are individual investors in PandoDaily.)

[Image via DVDBeaver]