Reverse geocoding of addresses – definition, applications, benefits

The precise location of a customer or user is an extremely valuable piece of information that can improve application performance, increase the quality of your analytics, increase the ROI of your marketing campaigns or detect fraud attempts. All this would not be possible without reverse geocoding technology. In this article, you will learn about this solution and how it can help you succeed in your business.


What is reverse geocoding?

The process of reverse geocoding involves converting geographic coordinates into human-readable and understandable addresses. Reverse geocoding is thus the opposite of geocoding, where addresses are assigned the correct geographic coordinates. See what the process looks like in the visualization below.

Reverse geocoding

The reverse geocoding service has many applications, primarily related to the use of GPS receivers installed in smartphones, smartwatches and other devices. They allow us to collect location data in the form of geographic coordinates, which then we can convert into addresses thanks to reverse geocoding. As a result, we gain additional data on users, which can prove invaluable in business development.

Challenges of reverse geocoding

It is worth noting that reverse geocoding can be more complicated than standard geocoding. It is sometimes the case that one geographic coordinate can be assigned to several different addresses, especially in high-density areas. Therefore, for commercially available solutions, the number of results that a reverse geocoding service should return is defined. In addition, the results often also include the distance between the indicated point and the found address. This kind of functionality is available in the reverse geocoding service offered by AlgoMaps.

Applications of reverse geocoding

Mobile applications

One of the widest spectrum of applications of reverse geocoding is mobile applications, where it is often necessary to enter an address. There are two scenarios that can be distinguished here.

In the first case, the user already knows the address he wants to enter, but thanks to the location of the device, it is possible to automatically fill in the address field. This eliminates errors that could occur when manually entering an address into a form, and improves the user experience by speeding up the process. This solution is used in a variety of applications – banking, food ordering, or courier services, where accurate address entry is critical to the effectiveness of delivery.

In the second case, when the user is in a place whose address he does not know, such as when traveling in a foreign city, reverse geocoding becomes indispensable. With this feature, the app can convert the device’s geographic coordinates into a readable address, enabling quick and efficient use of services that require precise location, such as ordering a cab.

Sales support applications

For a company that monitors, for example, the work of salespeople in the field, reverse geocoding allows it to generate a list of addresses visited based on the locations visited. This data makes it possible to evaluate and measure the performance of their work, as well as analyze efficiency by location. Reverse geocoding can also be used to optimize salespeople’s routes. Knowing the exact addresses of visited locations can optimize the order of visits, minimizing travel time and costs.

Location-based marketing

Another application related to reverse geocoding is location-based marketing, which is the customization of displayed ads based on a user’s location. By using reverse geocoding, it is possible to identify the address where the user is located, making it possible to limit the content of ads to those of advertisers with retail or service outlets in the immediate area. This type of approach has two benefits: first, it positively impacts the customer experience by eliminating the display of ads that are irrelevant to the user’s location (e.g., distant service outlets), and second, it contributes to the effectiveness of marketing campaigns because the ads are more relevant to the user.

Location data is also useful in promotional efforts to display advertising to people who have been to the location in the past. A good example would be promoting real estate listings to people who attended a real estate fair a few days earlier. Another interesting approach is to analyze the locations regularly visited by customers, create their profiles based on this, and tailor ads to them. An example would be advertising sports shoes to people who regularly visit gyms, swimming pools or parks.

Adressable TV

Another interesting example of the use of reverse geocoding is Adressable TV, which allows different spots to be shown in a given advertising band depending on the location (and other characteristics) of the viewer, making it more relevant to a specific customer. All of this is made possible by reverse geocoding, which enables the precise location of the user based on geographic coordinates.

Data analytics

Reverse geocoding plays a key role in the analysis of user location data collected by various types of mobile applications (provided they have the appropriate permissions to collect this data). By collecting information on visited points (frequency, time of day and duration of visits) and analyzing them, it is possible to identify where people live, work or go out. By converting coordinates into addresses, it is possible to enrich location data with valuable information – such as the closest surroundings of a building (number of different types of POIs within X km radius) or demographics of residents. This data can be used for further analysis and used to make important business decisions (e.g. for customer segmentation or OOH campaign area selection).

Fraud detection

A final but equally important application worth noting is the use of reverse geocoding as an additional tool in the fight against fraud. In the case of card payments or ATM withdrawals, it is possible to compare the cardholder’s location (determined by the location of the POS or ATM) with the location of his phone (GPS coordinates). If these locations differ (e.g., they are in different cities, countries or even continents), an additional verification procedure can be triggered to verify that the transaction is not a fraud attempt.

The user’s location also provides valuable knowledge in the credit risk assessment process. Income level is partly spatially determined. Therefore, the recognition of a customer’s address makes it possible to estimate his creditworthiness, both in the area of income verification and in the assessment of default or fraud risk.

Such an assessment can be used to automate business decisions on granting credit to a given user. Credit scoring based on address alone (so-called geoscoring), which is characterized by high prediction quality despite the narrow range of data provided, is one of the top Algolytics’ solutions.

The graphic below shows a model for assessing the risk of default / fraud based on locational data and behavioral analysis.

Default / fraud risk model

Why implement reverse geocoding? Benefits

Reverse geocoding, the conversion of geographic coordinates into a readable address, brings with it a number of benefits and opportunities that positively affect various areas of business. Below are the main benefits associated with the use of reverse geocoding:

Enhanced UX

With reverse geocoding, apps can significantly improve the user experience by making it easier or even eliminating the need to fill out address forms manually. Instead, apps can automatically fill in the address based on the device’s location. Such functionality positively impacts app usability and reduces the time required for data entry.

Elimination of address errors

Entering addresses manually can lead to errors and inaccuracies. However, the address returned by the reverse geocoding process is standardized and ready to feed into the database. This eliminates errors associated with incorrect address typing, resulting in high quality address data in the systems. This, in turn, increases the quality and reliability of any analysis based on it.

Database expansion

The use of reverse geocoding makes it possible to expand the database with new information. In addition to the address itself, reverse geocoding provides additional location data, such as postal code, city, administrative unit or spatial information about income, demographics or climate risks. This new information increases the informativeness of the database and makes it possible to conduct analyses, reports and summaries in new ways, such as aggregating data by postal code, city or administrative unit.

Fraud detection

Reverse geocoding can also be used as an additional mechanism to detect fraud. By comparing the location of the device (GPS coordinates) with the location of the POS or ATM, potential fraud attempts can be quickly detected. Differences in location can indicate suspicious transactions, allowing additional verification and security procedures to be triggered.

Increase the effectiveness of marketing campaigns

With reverse geocoding, it is possible to tailor displayed ads to the user’s location. Such ad targeting has two important benefits. First, it has a positive impact on the customer experience by reducing the display of irrelevant ads or those that are far away from the user’s location, and second, it increases the effectiveness of the campaign.

Reverse geocoding with AlgoMaps

If your company processes customers’ geographic coordinates and wants to accurately determine their addresses, improve the experience of app users, or use valuable location data for analytics and fraud assessment, the AlgoMaps API is worth looking into. Our solution allows you to instantly convert geographic coordinates into readable and standardized addresses in real time.

To see the potential of our technology, we invite you to test our API. The account allows you to process 1 thousand records for free. If you have any questions or need support, our expert team is ready to help. Contact us, and we will be happy to answer your questions and present the opportunities behind precise address data.

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