
Confessions of a location data exec - ilamont
https://digiday.com/marketing/confessions-location-data-exec/
======
StrictDabbler
This doesn't seem to describe a Ponzi scheme. Money from later investors is
not used to pay returns to earlier investors.

Contrariwise, if location data from later subscribers were used to provide
solid information to earlier subscribers that would be an effective and useful
service.

If there is collusion to both sell fake data and detect fake data that is
indeed fraud, but it's a different kind of fraud.

~~~
derefr
What the article is getting at, is that the service makes promises based on
the assumption that later subscribers will show up to provide enough data to
satisfy the SLA they give to the early subscribers, before those early
subscribers attempt to "call them on it" (by i.e. actually attempting to use
the less-common data sets in production.) If the later subscribers don't come,
the service will eventually be found useless for the early subscribers, and so
they've paid in for nothing.

Thus, _like_ in a (complete-knowledge) Ponzi scheme, the early subscribers
have an incentive to get later subscribers to sign up for the service, so that
it can be more useful for them.

But, _unlike_ in a Ponzi scheme, the later subscribers don't have to wait for
subscribers even later than them, before they can benefit. The later you
subscribe, the more immediate value the system has to you.

~~~
jlawson
Not an unknown business structure. E.g.:

I hold a party and charge an entrance fee.

The early arrivals are in an empty room. If nobody comes after them, they
won't have much fun. If you arrive after a critical mass of people is already
present, though, the value of the party is instant.

I guess the difference here is that people know how parties work in this
respect; this business may not have been so clear.

~~~
gowld
This is why paid parties usually have a higher price for later arrivals.

------
bastawhiz
I pay a lot of attention to stuff like this because it's something my
customers ask for. Podcasters pay good money to hosting services for
demographic data on listeners. There's no good way to get that data: podcasts
are RSS feeds. You see IPs and user agents. How do they know who's a 30 year
old male making $70,000? You an try to match IPs with advertising databases,
but good luck getting any sort of real signal out of that. That data is all
inferred anyway. Hell, I bet my cell phone has two dozen IPs over the course
of an average day as I connect to various wifi networks and Fi switches
carriers.

And yet, people build million dollar businesses on this stuff. Blows my mind.

Edit: And yes, sometimes people play podcasts via players on the web. This
makes up a tiny fraction of overall listens. It's not statistically
significant.

~~~
nerdponx
_There 's no good way to get that data: podcasts are RSS feeds. You see IPs
and user agents. How do they know who's a 30 year old male making $70,000? You
an try to match IPs with advertising databases, but good luck getting any sort
of real signal out of that. That data is all inferred anyway. Hell, I bet my
cell phone has two dozen IPs over the course of an average day as I connect to
various wifi networks and Fi switches carriers._

As it damn well should be.

That said, it's only a matter of time before carriers start tracking and
selling this data.

~~~
manigandham
Nobody sells this raw data, they sell the ability to use it by running ads on
their platform, and that has been offered already for a decade.

------
voycey
As an Location Data Exec I can say that so much of what he 'assumes' here is
utter tripe.

There is no need to have the phone in hand with the application open in order
to collect location data - we get billions of signals from first party data
from background usage on both iOS and Android.

These SDK's require legitimate usage of GPS in order to deliver the functions
that we provide - our permission requests are overt and informational - we let
users know exactly what data they will be sending and how we use it (one of
our products actually rewards users for doing this!).

True, Apple and Android are both cracking down on un-authorised usage and
collection of this data, it just means you have to follow some more rules in
order to collect this data. Either way it is good for user transparency.

It sounds like (for the most part) he is talking about bid stream data, which
everyone in the industry knows is the sewerage of the location data industry.
Sure you can get a few valuable insights from it - but should it be classed as
location data? No way. Even with significant cleansing it is still mostly
garbage. If that is what their entire business model is based upon then no
wonder it feels like a ponzi scheme to him.

For the rest of the location world who are using quality data - we see things
differently!

~~~
NipunSingh
Not an exec but work in the geospatial data space. Our company did an analysis
of bid-stream data and came to the same conclusion that less than 10% of bid
stream data is high quality.

[https://blog.safegraph.com/less-than-10-of-bid-stream-
locati...](https://blog.safegraph.com/less-than-10-of-bid-stream-location-
data-is-high-quality-and-we-know-how-to-find-it-3a2c0df35475)

~~~
voycey
Yep we know your company very well - we came to the same conclusions, even
despite the heavy cleansing methods people purport to undertake it is still
garbage!

------
kuhhk
> they believe up to 80 percent or more of the lat-long data available there
> is fake. No one has stopped to think about where that data has come from and
> why a publisher would choose to sell it all to a vendor who is going to
> build a business on top of their data. What’s actually happening is these ad
> tech vendors are trying to pad out the limited data they already own with
> other data sets from competitive vendors or other unknown sources.

Sounds more like textbook fraud than a Ponzi scheme (though, honestly I did
not read the whole article).

~~~
PLenz
Not really fraud, phones have different levels of horizontal accuracy based
off of privacy settings, GPS & cell signal strength, battery life, CPU load
and that's before you get to the obfuscation that exchanges do. At Dstillery
we built a geodata classifier to tell us what was and what wasn't good data.
We throw out 60% to 75% a day as not useful for learning anything from. But we
can be picky since we combine web and location data we aren't beholden to
needing the unreasonable amounts of location data you need working with just
location data. Location should be holistic part of the data, not the be-all,
end-all.

~~~
PLenz
It should also be noted that we have anti fraud tech baked into our system
that fires before our geodata stuff runs. Fraud gets cleared out for being
fraud not for being bad location data.

------
manigandham
As someone who has contributed several articles to this "Confessions" series,
beware that they're designed to highlight the worst-of-the-worst situation.

It's true that there are many junk vendors. Heavy politics and misaligned
incentives for ad agencies usually means that the bad companies do better than
the trusted vendors because fake data can obviously be shaped to look better
than the real results.

That being said, location data does work. There are many ways to collect it
from visual scanners in doorways, to open wifi networks that ping phones, to
ISPs enriching data feeds. There are also 1000s of analytics SDKs embedded in
apps that send pings constantly, so having a specific app open is not a
necessity and never actually used by any serious network. Pretending that's
the only way it works is just misleading.

------
reilly3000
One of the main promises of hyper-local geotargeting was the ability to build
audience pools based off of location data that could be correlated with
inferred home location mashed up with Zillow data to provide home value and
estimated equity. On paper this kind of targeting would be really appealing to
home improvement chains, banks, and even restaurants. I never really bought
that way when I was a media buyer, so I can't say if it was ever effective.
That said, I imagine it was more compelling to marketers when the data was
sourced from a few trusted entities. Now, practically every free-to-play
android app is asking for location data 24/7, no doubt to be sold to data
exchanges. Once a location data relationship is established with an app
publisher, there really is nothing stopping them from feeding psuedo-random
location pings and getting paid for it. Its just another form of ad fraud. I
wouldn't recommend a major digital buy to my worst enemy these days; Facebook
lies about their metrics, Google sticks your ads next to child porn, display
has been destroyed by domain spoofing and arbitrage. Maybe good old-fashioned
direct buys with publishers are still safe, but there is a reason why TV
budgets have held strong.

~~~
mlthoughts2018
This just kicks the can one level down the road. Aggregator companies like
PlaceIQ, Foursquare and Yelp will act as the intermediary and create more
rigorous ways to detect spammy / useless location signals, and smooth out
location tracking data.

Those intermediaries are the main worries, because brands or marketers may not
trust every random Android app, but they will trust Yelp or Foursquare or
something, and frankly given additional scale from data bartering and SDK
pings that send back location from many other apps, places like Foursquare or
Yelp really can provide targeting services that come close to what adtech has
always promised.

To be clear, I’d consider this a bad thing, because places like Foursquare or
Yelp, whatever they may say to put a PR spin on it, are quite literally
preying on people who unwittingly share their location data and don’t really
understand the terms, especially not when it’s some tertiary SDK traffic logs
agreement causing some music app or hotel app or weather app to send them data
tied to your IP address or device ID.

If those businesses can’t monetize their basic value proposition, like a app
to search reviews of restaurants, it’s a signal to delete & shutdown the
app... but unfortunately it’s become the reverse: a signal to abandon
investment into the actual user and diversify all kinds of deceitful behind
the scenes ways of getting user data and making users into the product.

------
boxcardavin
I think we all know what the quote is about even though it's not an actual
Ponzi scheme, it's just fraud. Another good reminder to question everything,
especially group wisdom.

~~~
TeMPOraL
Adtech industry is about tools for things of questionable ethics. You
shouldn't expect people doing and selling that to be paragons of honesty, who
won't use their tools and methods against competition and customers _within_
the industry.

Reminds me of this story about why whales don't die of cancer: because they're
so large, that by the time their cancer grows to be dangerous, it gets its own
cancer and dies.

~~~
tareqak
I looked up your story ("whales don't die of cancer" on duckduckgo), and found
it: [http://www.bbc.com/earth/story/20151031-the-animal-that-
does...](http://www.bbc.com/earth/story/20151031-the-animal-that-doesnt-get-
cancer) .

~~~
TeMPOraL
The possible explanation of this (Peto's paradox) I mentioned was something I
read on SlateStarCodex once, and it's from this paper:
[https://academic.oup.com/icb/article/47/2/317/719209](https://academic.oup.com/icb/article/47/2/317/719209).

I don't think this hypothesis is widely accepted, but I remembered it because
it's _neat_ , and fits the game-theoretic model of cooperation/defection
perfectly - which also makes it extremely useful for drawing analogies.

~~~
1zee
Can you elaborate on the analogy in the context of this thread?

~~~
TeMPOraL
Tumors can be seen as made of cells which eschew cooperation with the rest of
the body, and instead selfishly multiply, to the detriment of the whole and
ultimately themselves.

It is my belief that advertising is a cancer on the society; it's exploiting -
and in the process, destroying - every vulnerable individual and social
heuristic. It involves uncooperative behaviors like manipulating people and
lying to them.

The analogy here is that since entities making up the advertising industry
eschew cooperation and embrace exploiting others for short-term gains, they're
not going to magically start playing fair and cooperating _within_ the
industry. Therefore, to the extent you expect advertisers (including adtech)
to scam you, they'll scam each other just the same - as seen in this article.

This, fortunately, somewhat limits the effectiveness of that industry.

I came up with this analogy few years ago, when I read accusations that
Optimizely designed their A/B testing suite's UI in a way that promotes
drawing statistically unsound conclusions from A/B tests, misleading you to
believe that the tested intervention worked - and thus making you think
Optimizely is successfully helping you learn things. My own personal
observations from working alongside one social marketing team also confirmed
the soundness of this analogy.

EDIT: that Optimizely debacle I'm talking about:

[https://blog.sumall.com/journal/optimizely-got-me-
fired.html](https://blog.sumall.com/journal/optimizely-got-me-fired.html)

[https://news.ycombinator.com/item?id=10872359](https://news.ycombinator.com/item?id=10872359)

~~~
1zee
Ah, so you're an optimist

------
mlthoughts2018
Location aggregation companies, like Yelp and Foursquare, actually do have
large enough scale in terms of always-on location trail data to legitimately
attempt this type of targeting. Combined with the fact that you’re giving them
free data about your visits to places, your tastes, your likely income level
based on where you shop, your home location, and from this they could
reasonably predict your gender and put you into all sorts of specific
advertiser buckets, it’s frankly perfectly reasonable to claim you could use
it for ad targeting or measuring ad campaigns, even with a low match rate
against the advertiser’s actual list of customers (under 1% surely).

To boot, Foursquare at least, and probably Yelp too, does data swapping and
SDK agreements, like some thing recently announced with Accuweather (gross)
and with Hilton Hotels.

I think people sincerely fail to imagine the real scope of this type of
egregious trust violation and surveillance business model.

You can dress it up with whatever language you want about providing value to
the user that makes them agreeable to the data collection terms, but I’m sure
half of Foursquare users or Yelp users don’t actually know if they have the
background location tracking disabled or not, or what other innocuous-seeming
apps are silently feeding location pings to build a Foursquare data history
about you to make you targetable for ads.

Frankly, I’d personally advise anyone to absolutely delete these apps or
anything like them, and essentially vote with your wallet / vote by boycott
and just refuse any apps that rely on this kind of business model.

[0]: [https://www.adweek.com/digital/foursquare-will-fuel-
accuweat...](https://www.adweek.com/digital/foursquare-will-fuel-accuweathers-
new-location-based-recommendations/)

------
nopriorarrests
so much true. people are worried about their data being sold to advertisers,
while the little dirty secret of the ad-tech industry is that nobody has any
data, tbh.

facebook and google do, but they are not selling it. and the rest of ad-tech
loves to boast about their "data" on every conference while all they have is
/dev/random output, more or less.

~~~
malvosenior
An even dirtier secret is that you can have great data like Facebook but
_still_ serve incredibly irrelevant ads that everyone ignores. Google and FB
presumably know massive amounts about me but I've never been shown an ad on
either service that's worth clicking (on the off chance I even bother to look
at them).

~~~
m463
People always say nothing works because they never see relevant
advertisements.

But the disconnect here is the at the ad VIEWER is not the customer, the
purchaser of the ad is the customer. It might be whoever has a relevant ad for
you won't bid enough for you to see it.

~~~
_underfl0w_
That's a really interesting point. A lot of people seem to see FB & Goog as
adtech or something, when in fact they simply sell one of the main
requirements for advertising - ad space.

Whether the ad is well targeted or not, the host still makes a profit (both
monetarily and in terms of their own tracking data)

That's solid economics. If a war breaks out, be the one that sells guns. I
seem to recall a quote along these lines but it escapes me...

------
peterholcomb
Not a ponzi scheme...just fraud. Not sure why they went with the clickbaity
title.

~~~
_underfl0w_
It's literally about advertising, i.e. getting people to click on stuff they
otherwise wouldn't.

------
Illniyar
"they believe up to 80 percent or more of the lat-long data available there is
fake."

Isn't 80% fake data (i.e. bot clicks, auto play video counting, etc...) on par
for the ad industry?

------
sherlock_h
Or you buy all the location data from everyone who is selling, construct a
mega panel and try to pitch hedgefunds with your data:

[http://thasosgroup.com/](http://thasosgroup.com/)

------
eiji
The Google Opinion Rewards app seems to ask questions related to this all the
time. Anybody know more about that?

5 out of 10 "surveys" go like this: Which of the following places did you
visit recently? Yes? How did you pay? (Credit card, debit card, cash, made no
payment, …).

------
raverbashing
To be honest 90% of the ad/location hypertargeting seems to be grasping at
straws and much less effective than people think it is.

Retargeting/rebrokering it for ever smaller margins doesn't seem to make sense
(except for those selling that snake oil).

Volume and campaign quality count more than just getting the exact words and
the exact public (and remember you're paying more for a more targeted ad),
targeted ads of course work for a targeted segment/audience, for most products
that you would find in a high street/main street store, not really.

------
alexrage
This is mostly pervasive because of agency/client relationships. Most clients
go to an agency with a budget, and the agency, in good faith, is out there
paying location data services to target their ads. Then a report is generated,
passed to the client along some sort KPI that increased, and everyone is
happy. This fraud exists because the market allows it.

------
scarejunba
Haha, total and utter bullshit. Someone is pulling a fast one on this sucker
of a journalist. You don’t need location turned on to see where someone is
lat/long. An average engineer can think of a dozen methods in half an hour.

~~~
manigandham
You could've stated that better but yes, there are many ways to get location
signal from mobile phones. Also people do have plenty of apps running and
between all the SDKs embedded inside, there is location data being sent all
the time.

