by Mike Hershey, EVP of Government Affairs, OAAA
When leveraging data for targeted advertising purposes, location data is invaluable. Advertisers generally do not want to promote snow boots in the Sunshine State or surf boards to consumers in Kansas.
The out of home (OOH) advertising industry has a big advantage in this regard over other forms of media, as location data is an inherent part of its business model. With inventory in the physical world, location is already established. However, matching mobile device IDs with the physical location of the inventory can make an OOH campaign much more effective. It can allow for more precise, cross-device targeting from digital signage to mobile device, exposure measurement, and then attribution when that mobile device visits the physical or online location of the advertiser. These functions can be accomplished by placing beacons and other tracking devices on OOH inventory or working with third parties who are able to map mobile devices to the locations they have visited.
While the benefits of location data are clear, the risks are becoming more apparent. Regulators have always viewed location data as sensitive, despite not having laws that specifically addressed the issue. The Federal Trade Commission (FTC) is in a lawsuit with a data broker, Kochava, over how geolocation data is collected and used. While the FTC can bring enforcement actions to regulate deceptive and unfair practices, which is what they are alleging in the current case, Kochava has asserted that the FTC is alleging violations of “non-existent laws” when it comes to location data. Now, with the introduction of comprehensive consumer privacy laws in multiple states, the rules are coming more into focus.
Four of the five states with new comprehensive consumer privacy laws taking effect in 2023 have specific definitions for precise geolocation. Two of those states, Virginia and Connecticut, require obtaining the consumer’s opt-in consent before collecting location data of 1,750 feet or less. California requires offering consumers the ability to opt-out of the use of location data of 1,850 feet or less. The challenge of offering consumers these rights in the physical world are clear as digital signage and billboards do not have privacy policies that consumers can click to read.
Therefore, OOH campaigns need to balance the obvious value of incorporating location data into campaigns with the new legal obligations regarding such data. Providers should not be dissuaded from using data due to the new regulatory environment, but rather, they should be thoughtful in how such data is collected and leveraged in the OOH industry. The data is valuable and effective, though it comes with compliance obligations.