Location Data for Tomorrow: NAI Shaping Industry Guidelines
By David LeDuc
Marketers have effectively delivered location-based digital marketing messages for decades. Today, location targeted mobile advertising spending in the United States was estimated to be roughly $33 billion in 2023. Location data helps businesses enhance consumer experiences with discounts and offers.
The location data industry is also increasingly being utilized to power offline decision making, where aggregated location data has enormous benefits, for individuals, commerce and public works. For instance, when leading retailers are analyzing where to put their stores, insights about consumer movements in and around town are essential. For cities and local governments, location data is also a valuable tool for informing public works projects and driving smart cities, determining where to build public infrastructure like hospitals and schools, and deciding where to allocate resources more effectively based on the location and needs of consumers. Overall, the market for this data is projected to reach $142 billion in 2024.
The NAI has long been the leader in location data privacy standards
In 2013, the NAI first established a set of requirements for the responsible use of location data. Over the following decade, the NAI built upon these requirements including requiring enhanced notice at the time consumers are asked to consent to sharing their precise location data and providing a variety of methods that companies could use to render location data imprecise. The NAI also released best practices that went beyond our Code of Conduct’s prohibition on the use of advertising data for eligibility purposes, and clarified how members can ensure they provide appropriate notice and obtain informed consent for unexpected uses of data, such as crime prevention.
In 2022, the NAI was the first to create a list of sensitive points of interest, where consumers expect greater protections. The NAI’s Voluntary Enhanced Standards for Precise Location Information Solution Providers identified locations like places of worship, correctional facilities, places that may be used to infer refugee or immigrant status, and medical facilities that cater predominantly to sensitive conditions. These Voluntary Enhanced Standards establish a prohibition on processing or sharing a user’s location data associated with these locations, as well as prohibiting use of precise location data for law enforcement or national security purposes.
Lawmakers and federal regulators are cracking down on uses of consumer location data
Over the last year, U.S. policymakers have adopted new laws and brought milestone enforcement actions to crack down on misuse of sensitive consumer location data. The NAI welcomes engagement with policymakers on this issue because it’s consistent with our goal to preserve beneficial uses while putting a stop to deceptive and harmful practices. Multiple state laws enacted in 2023 created new restrictions on the use of consumer location data, with a particular focus on consumer health data derived from visits to healthcare facilities. The NAI created a State Law Comparison Chart (available for NAI members) that tracks all of the key provisions across the state privacy laws. Recent Federal Trade Commission (FTC) settlements have also provided new details to what the Commission views as violations of Section 5 of the FTC Act and reflect practices the FTC is encouraging across industry.
It’s noteworthy that the FTC settlements track very closely with the industry-leading NAI requirements and voluntary practices the NAI has promoted for many years, particularly concurring with our requirements around obtaining consumer consent for the specific uses of this data, as well as underscoring the NAI’s conclusion reflected in our Enhanced Standards that consumers deserve a heightened protections regarding certain points of interest that are more sensitive, such as locations like sensitive medical facilities, religious organizations, and locations held out to the public as providing temporary shelter or social services to homeless, survivors of domestic violence, refugees, or immigrants.
The NAI is working to safeguard beneficial uses of precise location data by ensuring that consumers receive greater protections
The digital advertising industry is at an inflection point where the beneficial uses of consumer location data are at risk. Now more than ever, it’s essential for industry to step up and ensure that consumers receive greater protections around their precise location data. Like the FTC and other U.S. policymakers, the NAI believes consumers should be able to rely on strong protections against the misuse of this data, particularly related to sensitive locations. That said, the current legal framework is fragmented, and a uniform national legislative framework doesn’t appear to be on the horizon.
Therefore, the NAI is developing new guidance that can be adopted more broadly by companies who collect and process sensitive consumer location data. We are working with our members that use location data through our Data Governance Working Group to develop these new industry guidelines to promote a consistent, higher set of standards across the industry that honors consumers’ privacy rights while enabling location data’s beneficial uses.
In the past, we’ve seen the markets incentivize stronger voluntary privacy standards when brands and agencies recognize the need to implement higher standards to protect consumer data, leading more ad-tech companies to commit to best practices. Companies looking to be leaders in the location data industry need to engage in this race to the top.
