The Evolution of GPS and The Future of Location Marketing with Dan Hight, VP Channel Partnerships at Placer.ai

00:00 Tim Rowe The global market for location-based marketing services was estimated to be worth about $46 billion in 2022. And it's anticipated to grow to $232 billion by 2030, or about 20 cents on the marketing dollar. Much of that obviously being enabled largely by these cell phones in our pockets, but with ad blockers being used by almost one out of every two people, VPNs growing in popularity, a cookie-less future. Things obviously have to change and they are changing daily. But to understand where we're going, we have to understand where we came from. So today we're going to explore why GPS exists in the first place, how the use case continues to morph for marketers and location-based marketing, and what the future could look like. Dan, thanks so much for being here. Tim, thanks for having me. Absolutely. Maybe give folks a little bit of your origin story, some background on Dan. I see the great superheroes behind you and superheroes all have great origin stories. So maybe give folks yours.

01:17 Dan Hight Where do you come from and what are we going to be talking about today? Wow, that's a big story, Tim. I'm not sure we have time for all of that on the podcast, but I'll condense and give you the Clifno version. So I'm Dan Hight, Vice President of Channel Partnerships here at Placer, and we're a location analytics platform. It's much broader than that. We're really providing true market intelligence for anything in the physical world. That starts with commercial real estate to now advertising. We work with cities and municipalities, airports, you name it, kind of working with them. My background from a location perspective starts way back when I was at Nortel Networks, which built basically most of the technology that cell phone companies use today to communicate. So it was really the backbone of the internet, the backbone of cell phone communication. So I started to understand how the cell phone industry actually worked. Then from there, I went to Verizon. Verizon at the time was a very large publication of Yellow Pages. That was my entry into the advertising ecosystem back when Google was just kind of starting out. Yahoo was the number one search engine, and Microsoft had kind of their own platforms, which now have come kind of full circle in that world. That's where I first got my foray into advertising. This was just the auspices of search. Then from there, I went to Xad, which was a pioneer in kind of location-based, geotargeted ad campaigns on mobile phones and built in location-based audiences and kind of saw that whole rise of that entire industry, which then rebranded itself to Ground Truth. So that's when I first started to understand how location-based targeting technologies worked. There was a lot of different players that were in that space. And then from there, I started doing some consulting in the space, spent a lot of time in the out-of-home ecosystem. I was on the board of the Digital Place-Based Advertising Association. That was the original location-based ad, if you will. These were boards on poles and then place-based. Rides on sticks in the ground. Rides on sticks. I mean, that's what it was. And so there was no easier extension from a geofence campaign than somebody who inherently understood the value of a location-based ad. Broadcast radio or broadcast TV. Location to them was a DMA or a metro area. But out-of-home certainly understood the value of location. It was all location, location, location. So it was a very easy complement to that. And so I worked with a lot of companies kind of in that space and then started doing some own consulting and advising on the side. Did a lot of stuff in the out-of-home space. But then I worked for a company that was building the next generation of GPS. So my original foundation of understanding location-based technology from kind of an ad tech perspective, thought I knew a lot about location. I realized I was just scratching the surface of how location foundationally actually worked. This team put the very first GPS receiver ever on a cell phone. And so understanding the fundamentals of how the GPS technology works, how the chips within the phones work, how all the location ecosystem works. I got a true, I would call it an ad tech anyway, version of a PhD of how location works. So now fully understand it. And you kind of mentioned something in the beginning of like, kind of take for granted. I took for granted before I even started. I was like, you know, GPS just existed, you know, on our phone. Sure. It gets the pizza here. Yeah. We just started seeing the evolution of some of that stuff. And I really stopped and thought, why does GPS actually even exist on our phone? Because without GPS on our phones, Placer couldn't do what we do. Exit couldn't have done what it did. Just any type of location ecosystem would what Geopath does a lot for the industry with their partners. None of that could exist without having GPS. And I was like, well, why do we have GPS on our phones? Well, it was all because of 911. As people are moving from landlines to mobile phones, how are you going to find somebody when they need help? I don't think anyone really ever stopped to think about that. Because the landline was registered to your home address, right? And it was physically wired. So you call 911 and you couldn't speak or we're having a life event or a safety event. You couldn't actually speak or communicate clearly by that phone connection. They would know where you actually were. That could send help to people in distress. Now fast forward when we start moving to cell phones. Well, it's not connected. If you can't tell them where you are, how do they actually find you? So the FCC mandated back in the early 90s and it actually rolled out in 1999 that cell phone manufacturers, the cell phone operating systems and the cell phone providers themselves all had to come together to support putting GPS receiver capabilities on a cell phone. And it was for public safety. And we just kind of took it for granted. And then once that capability was there, then you started to see a lot of new innovations started coming out. You started getting mapping capabilities on your phone and GPS navigation, which most people just think of is that it was always there. Well, it wasn't always there. And then you started seeing services that started coming out from that from the Ubers and the door dashes of the world to location analytics. You kind of name it kind of runs. And GPS today is responsible for, it's estimated over a trillion dollars a year and kind of global impact for the US. So it's a dramatic shift, but the foundation of it was really around public safety.

06:58 Tim Rowe And you saw a lot of innovation that took off after that. And how has that use case maybe evolved or changed over time? Are we using GPS? Do our phones use GPS all the time? Is it a some of the time feature? I guess maybe if we could double click into that, how does this all roll up to location based marketing?

07:22 Dan Hight Well, I think foundation, I think most people just think of location as just GPS. Well, it's not just GPS. First of all, there's roughly 28 satellites that are used for commercial use for GPS. 28. 28.

07:39 Tim Rowe Not 2800. No, no, 28. 28.

07:42 Dan Hight There's more NFL teams than satellites. The reason why that is, is they're really high up in orbit. These things are in orbit, 12,500 miles in orbit. So they cover a very large geographic area of the earth. But because they're so high up in orbit, they don't penetrate buildings. They don't work underground. There's a lot of challenges with it that's unencrypted. That's why you can spoof your location. That's why VPNs come up. And you can kind of, if you're trying to catch a Pokemon in another country that is only available in Japan, you can spoof your location. Or unfortunately, with some of the betting services on there where you can't do online gaming in one state, so you can spoof your location in another state. There's a lot of challenges with that that are plaguing the online gaming industry. So GPS has a lot of capabilities. But your phone does more than just provide GPS. It uses other location services. And you're calling essentially the native operating system, either Android or iOS, to pull in the location services. GPS is one of those. But it also uses a lot of power. So the phones themselves use other sensors. They use the accelerometer, the gyroscope, the compass to understand when you need to call for a new GPS position versus having GPS running every second of every day. It would drain your battery very, very quickly to do that. So ultimately, we're using a multitude of different location services on the device to determine where that phone actually is. And everybody does that. I mean, that's the foundation of how location generally works. And GPS, I mean, most people just think GPS, you know, oh, GPS is the most accurate thing. Well, GPS, generally speaking, and this is from the US government itself, has accuracy of about 10 meters. Now there's processes that people are using to improve that. But the actual GPS, yeah, it was about 10 meters of accuracy. And it's getting better with new capabilities.

09:48 Tim Rowe And there is new standards that are being constantly deployed from a GPS perspective. Traditionally, and I suppose I'm using traditionally to mean the past 20 years of digital marketing primarily, we've looked at reaching audiences based on interest and intent. Thinking about a platform like Facebook or Meta, you know, we're targeting people based on what they're interested in. If it's Google and paid search ads, we're trying to reach people based on their intent and what they're looking for. In the real world, behavior and movement become, I suppose, those really those two North stars the indicators of the audiences we're trying to reach. How do you think about that? Or how do you start to make that transition as a digital marketer from interest and intent to behavior and movement? Now we fundamentally understand.

10:46 Dan Hight In many ways, when you're out in the real world, you're doing your intent, right? I mean, if you're going to a quick serve restaurant, you're probably going there to buy something, get some food. If you're going to a mall, you're probably going shopping to go get something. If you're going to a concert, you're going to listen to whoever you're going to see. So you're actually doing your intent in many ways. And this was really kind of the auspice of a lot of original location based targeting tactics, right? In terms of building a location based audience profile of where you're going in the real world. So I can understand who my luxury shoppers are. I can understand who my quick serve audiences. I can understand who my concert goers are. That was a very real thing. But you mentioned kind of in the opening around privacy, the whole challenge is that starts to get into that creep factor, right? It's kind of the minority report-ish. You kind of walk into something, I know exactly that's Tim that's walking in. And that might be fine for certain use cases, but it starts to get into who understands that. That's one of the things that from a placer perspective that we've really looked at from the very core of Placer with what our original intent was, which was we focused initially on commercial real estate. So it was not so much that I'm trying to understand who Tim is specifically and where Tim is going. I just want to understand the number of people that are going into a certain location. So it's really trying to understand what is the right shopping tenant to go in a shopping center. A CBRE or a JLL or a Cushman and Wakefield that I own the shopping center, who's the ideal tenant that I want to put in the shopping center. So it's more about what place is going to do well there versus who that person specifically is. And in many ways, that was kind of the bread rock of what Placer started with. And it was really kind of that aspect. And I was working with retailers on building a new location or looking to acquire a new location. Where should I go? What shopping center should I go? Or unfortunately, because of economic conditions, maybe they're looking at divesting a location. All things being equal, what store should I divest? What competition has changed? Or I can look at my portfolio and better manage it. And then because of the privacy changes that you noted, again, we've been hearing about the death of third party cookies for quite some time now. And a lot of ad tech companies have been preparing for the cookie apocalypse, as we've been talking about. And that seems to really be coming to fruition now. And whether it's from GDPR type regulations or CCPA, the aspects of privacy is going to get more stingy, not less stingy. There's also an awareness now that consumers have. And certainly, Apple has been probably, at least from an ecosystem perspective, pushing that a lot more because they don't make advertising directly or money from advertising directly. It's more indirectly through the App Store, where Google, obviously, from a platform perspective, they're an advertising based company for the most part. But certainly, consumers are more aware of it now and kind of that creep factor into I want people to really know that, not know that. And so now we have a lot of interest from an advertising perspective where I don't want to understand who that specific person is. And I'm looking more at kind of a cohort based solution or like what Google is doing, kind of a topic based solution. So a one to many, a one to few, kind of the days of one to one in many cases are from an advertising perspective are kind of over or certainly close to being over. You might use it from like a CRM perspective, or if you have a relationship with a brand and you kind of opted into that, great, the brand can do certain things. But more mass market aspects are going to be much more one to many or one to few, which actually bodes very well for kind of the out of home industry in general, which has always been kind of a one to select, let's call it, one to many for certain ecosystems, one to few for others and increasingly kind of the retail media ecosystem as well.

14:46 Tim Rowe Again, which is not one to one, it's one to many. I think what brands are seeing too from this over optimization, the deprecation to targeting data and some of those feedback loops is that we're really missing out on the efficiency of new reach and getting new eyeballs and maybe have reached a point of saturation with a specific audience or are over optimized and just introducing more new awareness. Could your business benefit from more people knowing about you? Probably the answer is yes.

15:23 Dan Hight Yeah, it's probably somewhere in between. I mean, we're not going to go back to the Don Draper days of advertising per se, but it's not going to be like I put a dollar in, I can see every single nuance approach that comes out of it. Google and kind of online advertising certainly helped to usher in a whole new measurement capability. But to your point, in some ways we kind of over optimized and trying to get so efficient in the advertising, it kind of got away from building brand awareness and how do you actually do that in an effective manner and kind of understand that I'm going to allocate a certain amount of marketing to my advertising overall. And I'm going to look at it kind of holistically, there's not going to be a silver bullet. A lot of that has been again ushered in by GDPR originally, but increasing regulation

16:13 Tim Rowe overall and consumer backlash from being over targeted. Dan, I lost you there. There was a part where I lost you. Did you say the word holistically? I did. Did you? I think so. I think that's where I lost you is as you were about to say the word holistically. I might have to come back and manicure that unless you kind of remember what you said and then I can. I actually don't remember now. It's totally okay. I think where it was, we're going to be okay. I don't know what happened. Something on my end and all of a sudden you just froze. That was my bad. Let me grab. Oh, okay. I know what the next question was. Dan, I'd love to get your thoughts on from a privacy standpoint. One as a consumer and two specifically as marketers, as media sellers, how does data collected for the real world, how does that differ maybe from data that's collected online for the purpose of serving ads?

17:20 Dan Hight That's a great question. Historically, we were thinking you would cookie your website and you're dropping breadcrumbs on and trying to understand the journey that people were taking online. People who use different operating systems have seen degradation of their user experience because everybody is dropping all these cookies, which means that these pages load a lot slower. It's been actually a degradation to consumer experience. If you use something that has no cookies on it, you can see how much faster the page is load. It's been one of these taxes, if you will, in terms of consumer experience, but marketers obviously want to get the intelligence of what does Tim like or somebody like Tim because they're trying to obviously do it. At the end of the day, making content is not cheap. We're going to have to pay for it one way or the other. Ads obviously have been historically a great way of subsidizing the creation of content. When you start thinking about what's been happening in the real world, we carry around these cell phones with us that are great at collecting data. Historically, you were collecting mobile ad IDs. Before that, people were using things like the MAC address until Apple changed things because it's kind of like Whac-A-Mole. You create some new way of tracking somebody and that changes because you really didn't have permission. It's kind of like with, as Voltaire would say, or younger people might think Spider-Man said it, with great power comes great responsibility. At the end of the day, just because you can do something doesn't mean you should do something or that you have the right to do something. It's ultimately weighing that balance, if you will. But historically, you would take a mobile ad ID, which Google has their version, Apple has their version in terms of how to collect this stuff. And then you as a consumer can opt in or opt out of that depending on which platform you are and depending on what country. Well, those days are becoming more and more murky, very similar to third-party deprecation. Mobile ad IDs are becoming harder and harder to come by either because of the US changes, regulatory changes, or just consumer opt-ins or opt-outs. And so from a placer perspective, this is one of the things that we benefited from because we never focused on mobile ad IDs. Because again, the roots of our company were really around trying to understand the place, it's really place intelligence, not person intelligence or people intelligence. So your audience might not know what an SDK is. It stands for Software Development Kit. We have an SDK that's embedded into dozens of applications where location and importantly background location is paramount to the functionality of the app itself. Think safety applications, weather applications, financial services applications, insurance applications where you get discounts for safe driving, things like that where you do need to understand what the background activity is from that. But because we don't focus on the person, there's software that sits on our app publisher partners within their server ecosystem that strips out all privacy information, all PII,

20:32 Tim Rowe personally identified and bleh. It glitched out again.

20:36 Dan Hight Because you focus on, that's where it, yeah, because we focus on. Because we focus on commercial real estate and we focus on the place, not the person, we never were collecting this information. So we don't have any mobile ad IDs, even though we have our own SDK, Software Development Kit that sits within dozens of applications where background location is paramount to the functionality of the app itself. Safety applications, weather applications, financial services applications, insurance discount applications for safe driving, things of that nature. But because we never focused on the person, we actually have software that sits within our app publishing partner server ecosystem that strips out all person identifiable information known as PII, which many of your audience has probably heard of. But that also doesn't give us the mobile ad ID because we don't want it. We don't need it. We're not building an ad targeting business or retargeting business. So our business has never been impacted by mobile ad ID deprecation in any way. So if mobile ad IDs went away tomorrow, which tomorrow could be literally tomorrow, but it could be also six months or a year from now. But I think the smart money is that mobile ad IDs are going to become more scarce in the ecosystem, not more prevalent. Placer's business is immune to that because we don't have them in our system to begin

21:55 Tim Rowe with. How does this change? What are the implications maybe the next three to five years? We talked a little bit last time about Wi-Fi and routers and how some of the technology advancements that are happening in our consumer lives are influencing the next stages of location based marketing.

22:17 Dan Hight What's coming? It's a great question. And much like we started this with GPS and kind of how GPS exists in our phones and all the new ecosystems that develop because of that. We're starting to see a lot of this in terms of just overall technology advancements and the cost and the barrier of technology cost coming down allows for more digital screens in the ecosystem. It allows for new capabilities in the ecosystem. Everything from we've all have challenges. I'm sure most people understand this. You go into a big building, you open up Google Maps and you get that big blue circle. We've all kind of experienced what that is. And that's just because you can't get line of sight to the satellites. And I don't care who you are. We all use the same GPS satellites. But increasingly, there's more technology that's being developed. And again, location based marketing and location based analytics will be the beneficiaries of this. Maybe not the reason that it happens, much like GPS on a phone was for 911 reasons we benefited from that capability, but things like Wi-Fi. So today I have in my own apartment, you probably have your own house, you have a Wi-Fi router in your house. And you have two different channels of that. You have a 2.4 gigahertz spectrum. You have a 5.0 gigahertz spectrum. Why? Because there's more data transmitted in the Wi-Fi spectrum than all other spectrum combined. It's massive. Well, Wi-Fi is great for that use because it has a limited range. If you go too far away from your house, you lose connectivity to your router. I know right where it is.

23:52 Tim Rowe I can see it. It's the spot right there.

23:54 Dan Hight Yeah. Well, 10 meters or for us English people, US people, 30 feet from your house, you're probably going to lose Wi-Fi connection. Why? Because it has a very short range, but it can pack a lot of data on that. So what the FCC is actually doing is they're opening up more spectrum for Wi-Fi. Why? Because we're using a lot of devices. We have a lot of devices that are home. You go into a work environment, you have a lot more devices, you're transmitting a lot more data. How can I put more data on that spectrum more efficiently? It's really how do you plug more stuff into the device? So the FCC is opening up more spectrum for Wi-Fi use. Well, when that happens, they have to make sure because Wi-Fi spectrum is open spectrum. The reason why you can go down to Best Buy and you can buy a router off the shelf. You can go plug it in as long as you have a data connection. Any router will work. Why? Because it's open spectrum. It's like going to… Get you on the highway of the internet. It's like going and getting a Garmin or getting a smartwatch. You have access to GPS. You have a data connection. It's open. It's open. Anybody can access it. That's the point of it. Well, with that, with Wi-Fi, again, all spectrum in the United States, they're channeled for certain things. And your phone could pick up certain spectrum. And if you're on T-Mobile, you pick up certain bandwidth. If you're on Verizon, you pick up another bandwidth. Your AM FM radios, if people kind of remember that, you tune your dial. All that's doing is just changing the wavelength of what that receiver can pick up. That's just the way radio spectrum overall works. Different bandwidths and different frequencies. Same thing happens with this. They just have to make sure nobody else is using it. So for the first time, and that is a long-winded answer, but for the first time, the routers themselves will have to know where they are. Oh, wow. In an X and Y, latitude, longitude, and a Z coordinate, X, Y, and Z, the routers will in order to benefit from the use of this new spectrum that the FCC is opening up. So if you think about like a mall, you think about an airport, you think about some of these high traffic areas, think about stadiums where a lot of people are going and you want to be able to put more data and more capacity for people to use this stuff. For the first time, some of these environments that have been GPS challenged are going to have new capabilities. What that's going to unlock from a marketing perspective, from a consumer experience perspective will be fairly limitless. And so those are really some of the exciting things that from a retailer, they'll be thinking about, from marketers, they'll be thinking about, from stadium owners and event operators, what are they going to be thinking about just in terms of as this new bandwidth gets unleashed, what do you do to the consumer experience? What type of advertising and promotion, obviously, you might want to do for that kind of stuff.

26:37 Tim Rowe But just what do you want to do in terms of the overall experience for consumers? How does that maybe bring this full circle?

26:46 Dan Hight How will technology advancements like that influence platforms like Placer? So if you think about this, so think about a shopping mall. So right now for GPS or an airport, very similar, you kind of have an idea of where somebody is. But I don't know if you're in the Bath and Body Works or if you're in the Starbucks right next to it because GPS inaccuracy, you can get down to kind of a small area. But I went to both. Yeah. And so you really need to understand where you are. So as the indoor positioning gets better, trying to understand, are you in the Bath and Body Works or are you in Starbucks becomes a whole lot more clear. If you're in an airport, are you a gate A31 or A32? I mean, they're right next to each other. And so those types of things will open up new capabilities. Again, from a promotional perspective, from an intelligence perspective, again, if I'm a gate A31, I might be going to Cancun. That's a very different audience than I'm at A32. And I'm going to Boston for a trade show. So understanding that gives marketers, gives intelligence to, again, consumer intelligence platforms and obviously Placer. We're going to help leverage some of that to provide more insights for the breadth of

28:05 Tim Rowe customers who work with. Well, consider me subscribed. I'm sure there's a lot of folks listening right now that are just frothing for more. So maybe give them the lat and long. Tell folks where to go to learn more about what Placer is up to, maybe good places to connect with yourself.

28:21 Dan Hight Absolutely. So you can find everything you want from Placer at Placer.ai. So that's P-L-A-C-E-R dot A-I. We have that URL in before the A-I craze. So it's always been at the root of who Placer is. But we focus a lot on intelligence and information. So we have a whole discover series that you can go out and subscribe to and look at and stay up to date with what Placer is doing. My contact information is just Dan dot hype at Placer dot A-I. So you can reach out to me directly and stay tuned for more exciting news from Placer.

28:58 Tim Rowe We definitely will. Maybe as the jumping off point, what puts the A-I in Placer.ai? I can vouch for for the fact that you've been A-I-O-G's. But what puts the A-I in Placer?

29:11 Dan Hight Yeah, I would say that the big part of it is we're trying to ultimately take more intelligence into the platform to make better decisioning just overall. And so part of this starts, obviously, with the cell phone itself and kind of the intelligence of what that is. But it's also the context of what it is. So, again, when you start thinking about the GPS inaccuracies, are you in the parking lot or are you inside the store? Well, at some point in time, you start to have to make some very educated guesses, but you can do that with very large data sets to ultimately understand some of those things. You can also look at where you have peaks of spike foot traffic or loads of full traffic or footfall traffic. Some of that was COVID related. Obviously, we saw everything was fine until March 2020 and then everything shut down overnight. Well, you can see that. But certain events are going to drive spikes or fall off in traffic. What we're doing right now is trying to give you some intelligence of what may have happened. Was this around a holiday? I mean, again, if you're a marketer in New York, well, what just happened in, you know, in Dallas on a Tuesday? You might not know that there was a parade. So if we can provide you that intelligence of what may have led to a spike in traffic or fall of traffic gives you more insights to how you want to leverage that again from a retailer perspective or from city planning perspective.

30:32 Tim Rowe Excellent. Dan, thank you so much for sharing as much as you have. We'll make sure to link to all of the resources to make it easy for everybody in the show notes. And again, thank you for being here. Thank you, Tim. Absolutely. If you found this to be helpful, please share it with someone who could benefit. As always, make sure to smash that subscribe button wherever you're listening. Leave the podcast review. That's how you help us grow. And we'll see you all next time.