What is location based advertising?

What’s LBA?   •   8. Februar, 2018

Person holding a smartphone

Location based advertising describes a location-based, mobile, personalized marketing concept that draws on the technical services of location-based services.

Development of location based advertisings

In order to explain the development of location-based advertising, one must first understand the basic features of location-based services (LBS for short), because these are based on location-based advertising.

Location based services are defined as services which depend on and are improved by positional information of a mobile terminal. This position information, which includes both local and temporal information from users are collected and processed via the Internet or wireless connection.

There are various methods for the technology-based positioning that constitute the service: the satellite-based method, the position determination via radio cells, WLAN or via beacons via Bluetooth Low Energy.

Satellite-based Procedures

Since 2000, the Navigation System with Time and Ranging Global Positioning System (NAVSTAR GPS) has been available for civil applications. It is a satellite system that is used for positioning and has proven itself especially in car navigation.

But even in smartphones today a GPS chip is installed, through which a contact with the satellites can be made. In order to perform a position determination via GPS with a smartphone, a connection to at least four satellites is required. The signal transit time between the satellite and the GPS chip is measured, resulting in several possible position points for each satellite.

The connection with several satellites results in intersections. The common intersection of all satellite connections is finally the location where the GPS chip is located.

The Galileo System is a regional satellite system developed by the EU and the European Space Agency (ESA) and in operation since 2016. Also by Galileo is a freely available mobile position determination possible with the smartphone.

All of the above methods are passive, meaning that no database query is made to determine the location information of the user. That is, they can also be done without network access. However, these methods are inaccurate and error-prone, since only a limited amount of data can be used.

Depending on the measuring method, deviations of several hundred meters from the actual position may occur and even in the best case, the position can only be determined to within 3 to 10 meters.

Position Determination via Radio Cells

Also in the position determination by radio cells (area covered by a single transmitter in the mobile network), there are several methods apply, but these depend on the technical nature of the terminal. All methods are based on the location and identification via the Cell ID (mobile radio cell identification number) of radio cells of the mobile radio network. The localization accuracy depends on the size of the radio cell used, which results in strong variances between the accuracy of the measurement on land and in the city, since in cities a radio cell covers much less space.

Here too, the influence of different variables can lead to deviations of several hundred meters from the actual position, but in the best case, the localization works even in closed buildings. If the transit time measurement is taken into account, ie the measurement of the distance between the radio cell and the user’s terminal, the accuracy of the localization can be increased. However, this method is not possible with all terminals.

Position Determination via WLAN

Even hotspots (dial-up points for wireless Internet access) of Wi-Fi networks can be used for positioning. Especially in urban areas, they are widespread and also work indoors.

Upon initial activation, each WLAN hotspot sends an identification signal, which stores the location of the hotspot as a coordinate in a database. The user’s terminal receives the identification signal of the hotspot when it is within range and compares it with the database, thereby determining the location.

However, problems can occur when a hotspot is turned off or removed from its previous location and rebuilt at a new location. The stored coordinates are then no longer correct and pass on an incorrect position to the terminal.

Another challenge is capturing WLAN hotspots. There is no universal database in which all Wi-Fi hotspots are listed and therefore no nationwide coverage.

Positioning via Beacons using Bluetooth Low Energy (BLE)

BLE is also referred to as Bluetooth Standard Version 4.0 because it has evolved from the previous three versions. As the name implies, BLE consumes less energy than its predecessor versions.

Beacons consist of a processor with a BLE unit and a battery. This sends three identification numbers to the user’s terminal. These different identification numbers allow accurate positioning within closed buildings. X

It is important to note that the maximum range of BLE is 100 meters. Together on the terminal a app will be prevailed, which processes the collected data.

Use of LBS for location based advertising

These systems can be used individually or complement each other, for example, with satellite-based methods outside and BLE inside buildings.

Mobile devices (smartphones, tablets) are a platform for advertising in which, as in classic online advertising, they can be personalized according to the profile and preferences of the user. Users can also choose what type of advertising they want to receive. This information is stored on a server and the advertising is played appropriately adapted.


  • Altpeter 2017; Akzeptanz von Beacons für Location-based Advertising. Eine empirische Analyse aus konsumentenorientierter Sicht
  • Dhar, Varshney 2011; Challenges and Business models for mobile Location-based services and advertising. In: Communications of the ACM
  • Gilchrist 2014; Learning iBeacon
  • Ottmann 2015; Mehr Kontext, mehr Nutzen – warum iBeacons alleine noch nicht genug sind
  • Schelewsky, Jonuschat, Bock, Stephan 2014; Smartphones unterstützen die Mobilitätsforschung. Neue Einblicke in das Mobilitätsverhalten durch Wege-Tracking

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