The market for geographical information systems (GIS) is exploding, creeping across businesses like the maps they produce, turning a more intense shade as market penetration increases. But what do they actually do?
At their simplest, they draw maps. They can represent sales data, distribution sectors, customer profiling, retail catchment areas, media regions or any other land-related information graphically. And because many of the off-the-shelf packages are designed to work with Microsoft Windows, they are relatively easy to plug in and run.
“The Windows platform gives a similar feel, but the uses to which ostensibly similar-looking systems can be put varies dramatically,” says Peter Bell, marketing manager of CDMS, which markets Beacon Dodsworth’s GIS, Prospex.
GIS packages can also be used to carry out complex market profiling for planning direct-mail or door-drop campaigns; customer distance and drive-time analysis for the siting of retail outlets; the managing of poster sites; and the laying of cable – BT, for example, uses highly detailed maps for planning extra-secure routes for customers that require them.
“BT also used time-series mapping to depict the intensity of phone use during its reduced-rate Sunday Special promotion last year,” says David Whitehead, managing director of TDS Insight. “After the commercial has aired in a particular TV region, you can see an intense lighting up of the map, which demonstrates graphically that call stimulation works. You can then compare that with the results from yesterday or a month ago.”
He adds: “At its simplest, a GIS is a useful tool for geographical segmentation. It’s also a visualisation tool, for comparing drive times of a retail site, for example. It can also be an operational planning tool and critical link into other systems.”
Martin Davies, director of CCN Marketing, gives this example: “To investigate catchment areas, you could use a basic 20-mile radius, but there are more creative ways of looking at it. You need realistic data about the area surrounding a store site, such as the proximity of competitors and public transport routes.”
Among the packages available are MapInfo, ESRI’s more detailed ArcInfo and ArcView or Kings-wood’s Geo Concept. “The basic mapping software costs about 1,000,” says Jonathan Plowden Roberts, head of consultancy at The Database Group. “But that’s like buying a car without any petrol – you won’t go anywhere.”
The difference is that the petrol for a GIS system, unlike a car, is the most expensive part of the equation. Plowden Roberts explains: “Software costs are falling all the time, as are hardware costs, but it’s the data that will decide a system’s usefulness. Users don’t always look at what they want to do with it.”
“The more computer-literate users are, the more likely they are to seek out systems themselves,” adds Lawrence Duru, GIS manager of Equifax. “A general-purpose mapping tool won’t do profiling unless you know how to do it yourself.
“There’s plenty of data available, but it’s of varying quality and whether it tells users what they want to know is another matter,” he adds.
GIS consultancies will advise on how to bundle systems and datasets together to get the best use from the software. They offer packages that include the mapping software, geodemographic information and as many extra datasets as are required for the job in hand.
CACI managing director Greg Bradford explains: “GIS software was first developed for land-use applications, for use by local authorities and to help utilities decide where to run cable and that sort of thing. The big issue now is whether the system has been specifically designed for marketing purposes, or whether it has been adapted from one of the existing land-use programs, what we call the dog-turd and lamp-post systems.”
Users must decide what they want from a system before they begin. How detailed do they need the information to be? The maps themselves can be licensed from Ordnance Survey, the AA or Bartholomews, say, and the cost depends on the scale required. To map the whole country down to the level of address points could cost up to 1m, according to Business Geographics director Adrian Tear, but this would provide far more detail than most users need.
The OS’s raw data comes in tiles and has to be translated into a GIS format, explains Bryan Wade, managing director of The Data Consultancy. As a result, he claims, his data is not only simpler to use but can be cheaper than data licensed directly from the OS itself.
“Our software can grid reference customer or site locations to an average accuracy of 200 metres using the 1.7 million grid references in the Postal Address File,” says Simon Perry, marketing manager of Beacon Dodsworth. “However, the file provided by the Post Office has several quality problems: some grid references are wrong by miles; some grid references are missing; changed postcodes are not on the PAF – the Post Office changes the postal geography about four times a year – so we convert and update these.”
To get a more comprehensive view of an area, you need geodemographic and lifestyle information too. “Clients should have their own data, such as sales statistics and then they need third-party datasets, such as neighbourhood classifications from the 1991 Census, CACI’s Acorn or CCN’s Mosaic,” says CACI’s Bradford. “This starts to push the cost up, perhaps to something in the region of 25,000 to 50,000.”
David Lloyd Leisure uses CACI’s InSite mapping package for site analysis before developing new tennis clubs and to look at direct marketing in the immediate catchment area following the opening of a club. “We use Census information alongside a lot of our own statistics about our 80,000 members,” says development executive Debbie Cornish. “It is also very useful when developing new concepts, such as the newly introduced Playdome children’s clubs, and to look at the move away from such a strong emphasis on tennis and towards broader health and fitness.”
Woolworths, too, uses CACI’s InSite to assist with store promotions, catalogue distribution and general advertising strategy. Stores marketing manager Chris Garthwaite says: “It’s a very effective tool in understanding our local marketplace, and especially in understanding and responding to competitors.”
Business Geographics’ Censys offers a mapping front-end with AA mapping data, Census postcode districts, geodemographic data such as CCN’s Mosaic and audience research such as BARB or Rajar figures, says Tear, and is used by clients such as Carlton Communications to sell cable airtime and the Financial Times to analyse the areas covered by its wholesalers.
CDMS’s Bell identifies other datasets that may be of use, particularly to companies providing financial services: “Discretionary files can include information relating to the incidence of County Court Judgments. Data protection legislation prevents this being available at individual household level, but postal-sector level is usually good enough for most marketing-based GIS functions. Credit-card spend information, store-traffic data and media catchment areas can also come in.”
Boots uses two main GIS systems: MapInfo for small-scale PC work, which many users can call on to their desktops, and the more complex and powerful object-oriented Smallworld GIS, which gives access to much larger databases than can be held on an individual PC.
Boots buys a lot of data from CCN, which has recently tied up with Goad, a company that produces maps stretching from detailed large-scale plans of up to 1:200 – which are of more use to architects and planners than marketers – down to CD-Rom atlases and routefinders. The Goad Retail GIS has details of more than 325,000 retail and service outlets in over 1,100 UK shopping areas and is continually updated to take account of retail outlets’ frequent changes of ownership and usage.
“We can use the GIS to call up plans of shopping centres and the layout of individual Boots stores and we use the demographic side for identifying where customers live,” explains Robert Newton, statistics controller in the location research department. “The main use is for location planning; if a store is in a bad location, we can use it to identify better sites. It’s very good for getting a better grasp of local catchment areas.”
And what of the future? “If the Internet really does take off as a shopping medium, then the geography of store location will become less important,” says TDS Insight’s Whitehead. “In the meantime, the GIS market is well-developed in the UK, but as Europe becomes more integrated, we will have to think about the market there.”
CCN’s Mosaic geodemographic segmentation system already covers 15 of the world’s most significant markets, including France, Germany, Sweden, Japan, South Africa and the US.
It has already been used in South Africa to identify potential casino sites and in Sweden to design a highly targeted telemarketing campaign to persuade wavering Eurosceptics to vote in favour of joining the European Union in 1994 – just the sort of targeting information that people in this country may be wanting to call on before very long.