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Summary:

Sense Networks uses your location data to send you targeted ads. Location data, however, isn’t as exact as you might think.

Dartboard; one dart on bull's eye while three darts are off-target
photo: Corbis / Chat Roberts

With the onslaught of new technology and attendant privacy violations, it’s easy to hyperbolize what “they” — the government, big corporations, hackers — know about you. As far as what advertisers know about you from your phone’s location data, it’s not as much as you might think. We spoke with Sense Networks, a company that uses mobile data to help ad agencies target their desired users, to find out what advertisers know — and don’t know — about us, and how that relates to the ads we see on our phones every day.

“The idea that everybody knows everything about you isn’t true,” Sense Networks CEO David Peterson told me. Instead, what advertisers know about you are general demographics, such as age, income, ethnicity and where you live, work and shop. 

How do they know that?

Every time you open an ad-supported app on your phone, you initiate a real-time bidding war from advertisers. Advertisers are trying to reach certain demographics with their product ads, lest they waste marketing dollars on people who are unlikely to buy their products. It’s a bit like TV commercials, which are paired with programming and time slots whose viewers they’d like to reach.

Your phone gives off a several types of  location data: IP address, cell-tower positioning, Wi-Fi and GPS. Each second, Sense Networks receives around 25,000 bid requests for ads, which they parse to create user profiles. But according to Petersen, the company dismisses 50 percent of those right off the bat, either because they don’t contain location data or because Sense’s algorithms show that the location data is flawed. For example, if the location data shows you to be at the exact latitude and longitude that is the center of New York City, it’s likely that the app is only registering which city you’re in, not where in the city you are.

Location-source

Still more of the data isn’t useful because it’s too broad. Of what’s left, Sense networks looks only to assisted GPS and Wi-Fi data, which can predict location roughly from 10 to 100 meters, respectively (see graphic above). That location data tells a lot about you: Based on when and for how long you are at particular locations, Sense Networks can guess in which zipcodes you live and work.  It then overlays Census data from which it infers demographic information about you based on your zipcode and the zipcodes you visit regularly. Accordingly, Sense Networks says it doesn’t know specific information about you. Rather it has general information about people who are similar to you in age, income and consumer habits. 

“We build demographics based on shopping habits: Do you go to baseball games, national parks, take airplane flights?” Petersen said. For their part, advertisers are usually looking for a specific demographic. “We ask, who would you like to target: loyalists to your stores, to your competitors, a certain lifestyle?”

Whether you really fit in with what your demographics say about you—well, it depends on how much attention you give to ads.

  1. Great piece, Rani. There is a great deal of confusion on the part of consumers on how specific brands really get about targeting. While people think their personal information is being hoarded somewhere to be laid bare in invasive ways, the truth is very different. Marketers are in a race to enrich and overlay data to gain the best segmentation of the public so that they can determine propensities to listen and act on a message or ignore.

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