Geocoding is Key: Factors to a Successful Geocoding Application

In business, information obtained from location intelligence are vital to regulatory compliance, risk management, pricing, and strategic planning. In today’s data starving, competitive world, businesses looking for an edge are assessing the foundation of their location intelligence strategy – geocoding.
You might think of geocoding as a simple conversion process. You just input a street address or location name and get geographical coordinates. If this were all, everyone would be looking for the least expensive geocoder that provides reasonably accurate results. However, there are numerous pitfalls in the geocoding process, and if you are not aware of these, you might get inaccurate geocodes but not realize they are wrong. This can have a massive impact on your business outcomes.

Postal Addresses Worldwide are Inconsistent and Complex

Too often, addresses are seen as a simple identifier for a house, building, or location. But an address is a complex, multi-field labeling system that often changes. Businesses that use address data face plenty of challenges because of the various and complex addressing rules worldwide. For instance, in some countries, physical addresses and postal codes may not even exist!


With this and other challenges in mind, IT departments have to automate processes critical for business across markets and business units, with consistent results. When done right, a geocoding solution provides better position accuracy, excels at address matching, and returns metadata that effectively describes geocoding results. It leads to better decisions regarding risk assessment, pricing, market analysis, asset management, and more.


Factors for a Successful Geocoding Application

There are many factors to consider when looking at geocoding application, but these three stands out the most:


Match Rate

To effectively use input addresses (that are frequently incomplete or filled with errors), you need a geocoder with sophisticated algorithms to match them to the correct addresses. This is crucial if you want to implement geocoding capabilities into heavily used applications, particularly those critical for business.


Positional Accuracy

Because ‘close’ isn’t good enough, you need geocoding coordinates with a level of accuracy most suitable for your business. Demographic profiling can use geocoding coordinates that are close to the ground, but if you are, for instance, underwriting a loan on a property in an area exposed to natural disasters, you better have coordinates that put your business as close to ‘on top’ of that location as possible.



How good are your matches? How can you know that your geocoder is successful with the previous two geocoding factors? With metadata. Geocode metadata includes information about how well the input address matched with reference data, its level of positional accuracy, and the type of point returned. That is why metadata is vital to an excellent geocoding application. It helps you understand geocoding results and helps you automate decision-making and in-depth analysis.


Take Away

A careful and detailed evaluation of the three vital factors described above can help you make the right decision to support your location intelligence strategy.

For more information about geocoding, its factors to a successful application, and its value for your business, click here.