Geocoding: The Key To Determining Location Characteristics

Transcription

1 Business Geographics White Paper Lot 54, Where Are You? Geocoding: The Key To Determining Location Characteristics

2 Overview You have just purchased Lot 54 in a new housing development where you are building your dream house. You know that its address is 720 Primrose Lane, Newtown Village, Virginia, But does your address really tell you all you need to know about where you are located? longitude and latitude. The process of determining these coordinates and linking this intelligence to a physical street address is known as geocoding. Although some people consider geocoding only in the context of generating maps, this is merely one application. Geocoding is the enabling technology for spatial analysis determining where one location is relative to other locations or for determining the territory or zone it is located in. The address certainly informs the United States Postal Service (USPS) and delivery services such as UPS and Federal Express where you are located. It doesn t, however, indicate important geographic-related attributes and characteristics. These include wide-ranging yet important information such as: Automobile insurance territory Tax jurisdiction Distance to the nearest fire station Fire, school or police districts Distance from the coastline Whether it is located in a floodplain Distance from a telecommunications central office for DSL eligibility Proximity to known sinkholes, earthquake faultlines and seismic zones, landslide zones Whether the home is in the path of known hurricane tracks By knowing the latitude and longitude of two locations it is possible to compute the distance between them, for example, and to perform spatial analysis, analyzing one location in relation to another. Knowing a location s geocode can also provide a key to accessing data files that contain additional location-dependent attributes and characteristics. Businesses can also use these geographic-related characteristics and associated demographics to determine proximity to potential customers, proximity to suppliers or even competitors, determination of delivery routes, sales territories, and service areas. In order to know your true location, it is necessary to know your 2

3 Business Geographics White Paper Unfortunately, most databases containing address information (e.g., customer, prospect or vendor files, business directories, etc.) do not include geocodes as part of the associated address data. In addition, no database currently exists that includes the specific and exact geocode for each and every United States postal address. A Geocoding Solution A geocoding solution consists of three primary components: address data standardization and validation software, software that determines the geocode for this address, and geographic enrichment software that appends information to the address based on its true location. Geocoding Requires High Quality Address Data Just as the USPS cannot deliver a misaddressed envelope to its rightful destination, valid, well-defined addresses are important components of determining accurate geocodes. The USPS has established addressing conventions and guidelines governing punctuation and abbreviations, format, and address components for address standardization. The first step in augmenting an address with a geocode is to standardize and validate that address so that it can be used by geocoding software. Approaches To Geocoding Short of placing a global positioning system (GPS) device at an address to determine its true longitude and latitude, there are several approaches to geocoding. These range from less precise methods based on ZIP Codes all the way to street segment address-level geocoding. ZIP Code geocoding can utilize 5-digit ZIP Codes or, for additional degrees of precision, ZIP+2 Codes and ZIP+4 Codes. ZIP Code based geocodes utilize the latitude and longitude of its center and are obviously an approximation for any particular address within the ZIP code. Since ZIP Codes were designed to quickly sort mail and speed its delivery they are not nearly as accurate as Street Segment Address-level geocoding (discussed below). Additionally, ZIP Codes are not necessarily stable over time. While a location s latitude and longitude will never change, the USPS will often modify a location s ZIP Code. There are over 40 million ZIP+4 Codes in the United States of which approximately 600,000 change each month. Street Segment Address-level geocoding is based on knowing the geocodes at the intersections of the block or street segment containing the address (and shape points if the segment curves) and then estimating the geocode of that address by interpolation. If a block runs from 101 to 201 Main Street, then 151 Main Street would be approximately halfway between 101 and 201 Main Street. 3

4 The U.S. Census Bureau s TIGER (Topologically Integrated Geographic Encoding and Referencing) database contains geocodes for the street boundaries or segments (i.e., where the street intersects with other streets). The database also contains the starting and ending numbers for each side of the street of these segments. Due to the distances involved and the completeness of the database, street segment address-level geocoding is likely to be more accurate in urban areas and less so in rural areas. In fact, some rural routes might not even be included in the TIGER database or starting and ending address ranges may be missing. Accurate Geocoding: Accurate geocoding requires accurate addresses. However, the USPS is responsible for mail delivery, not for tracking the latitude and longitude of an address While the Census Bureau is committed to enhancing the completeness of the TIGER database, this is estimated to be a multiyear project that will provide additional content which each successive (normally yearly) release.however, several commercial vendors market enhanced versions of the public domain TIGER files. Most geocoding software reverts to ZIP Code geocoding when address-level geocoding is not possible. Geocoding Accuracy and Confidence As the accuracy of the geocode assignment can vary by the method utilized to assign the geocode, it is important to be able to determine a level of confidence that is appropriate for the intended application. Among the potential problems associated with ZIP Code geocoding, even at the ZIP+4 level, is that it may span county or other municipal boundaries. Some areas, such as Carmel, California, only have mail delivery to post office boxes, not to homes, and thus don t even have ZIP+4 Codes. At the other extreme are large office buildings in major metropolitan areas these buildings may have multiple ZIP+4 codes, perhaps one for each floor. Additionally, centralized mail delivery locations, which are used in many townhouse complexes, may have their own ZIP+4 Codes and could be several hundred yards from where the residents of the townhouse physically live. In situations like this even ZIP+4 Codes do not have enough precision for many geocoding applications. Routing an emergency response unit to an address would not likely be based on 5-digit ZIP Codes and even ZIP+4 Codes may not be sufficient. This type of application is better suited to street segment address-level geocoding. Recognizing that even street segment address-level geocoding has a degree of error, several municipalities are using portable GPS equipment to gather more precise geocodes for every address within a locality. Currently-Most Accurate, Commercially Available Solution Currently, there is no database that includes the specific geocode for each address in the United States, although it certainly would be possible for the USPS, which for the most part physically visits most locations each day, to provide this data (even the USPS does not visit every house, as many addresses are covered only by General Delivery, Rural Route or P.O. Box delivery). Until such a database is available, street segment address level geocoding is the most accurate, commercially available, solution Geocoding Applications Knowing the latitude and longitude of an address provides the keys to many applications. These applications include distance to other locations (e.g., nearest store) or boundaries (e.g., a 4

5 Business Geographics White Paper rating territory) and whether or not an address lies within various zones or sectors (e.g. tax district or flood plain). These may be respectively classified into three broad categories: distance between two locations, distance to a boundary, and determining if an address is situated within a zone. The last category is also referred to as a point-in-polygon application. The polygon is defined by the latitude and longitude coordinates of a series of line segments that form the polygon. Insurance Territories and Rates Insurance companies base rates on several factors directly related to physical location. For example, auto insurance rates are based on the territory the auto is garaged or normally parked in and commuting distances. Home insurance rates are based on factors that include rating territory, distance to the nearest fire station or fire hydrant, distance to coastline, as well as whether the residence is located in or near a floodplain or other hazard. Municipalities Political municipalities have a multitude of operational needs that can be addressed by geocoding solutions. These range from identifying voting precincts and polling locations to determining the appropriate taxing authority and tax rate for products and services delivered to or utilized at a residence or business. Tax jurisdiction information can be added to a record by appending a 10-digit FIPS (Federal Information Processing Standard) code assigned to each jurisdiction. This is much more accurate than using 5-digit ZIP Codes, or 5-digit FIPS county codes (two for state and three to uniquely identify a county within the state). This dramatically enhances accuracy due to the fact that multiple, but mutually exclusive, taxing jurisdictions may fall within the area defined by a ZIP Code or FIPS county code. Special tax districts, typically established to fund a local public need, can be particularly challenging, as they are not tracked by the any federal governmental body such as the U.S. Census Bureau. Recognizing the importance of determining special tax district assignments, some geocoding and data quality software vendors maintain a database of special tax districts for use by their customers. Healthcare Providers Many healthcare plans utilize geocoding techniques to locate participating healthcare providers within a defined distance from subscribers homes or offices. The subscribers indicate the distance they are willing to travel and the services they are seeking (e.g., dentist, optometrist, general practitioner, etc.) and the healthcare plan utilizes geocoding software and provides a list of eligible providers. Route Assignment and Dispatching Service areas and delivery routes are often determined somewhat arbitrarily, without any particular methodology. By using geocoding, not only can an organization determine distances for use by routing algorithms, it can also apply the geocodes to obtain demographic and market characteristics of the population and geography served. The demographic and market characteristics of the surrounding area can be used for site selection decisions such as determining where, and if, to locate retail stores and service outlets. Telecommunications Service Areas Eligibility for DSL (Digital Subscriber Lines) service is based on the distance between a switching Central Office (CO) and the subscriber. DSL vendors use geocoding to pre-determine if a 5

6 potential subscriber s address is within the area eligible for DSL service. Time Zones While most states in the U.S. are within one time zone, there are many exceptions. For example, North and South Dakota, Nebraska, and Kansas have most of their land mass in the Central Time Zone with small regions in the Mountain Time Zone. Further complicating time zone determination is the fact that even within a given time zone, certain locations follow daylight savings time conventions while other locations do not. Depending on the season, Arizona is divided into two time zones. In the summer months one area is in the Pacific Time Zone but totally surrounded by a part of Arizona that is on Mountain Time. Geocodes can be utilized to determine the appropriate time zone by using a polygon to define the time zone and determining if a given location falls within the polygon based on its geocode. Telecommunications: Telecommunications companies often have problems, some of which have led to class action lawsuits, in determining the tax jurisdiction of their customers. This problem is compounded by the fact that the boundaries of local governmental jurisdictions can change due to annexations, mergers, or the creation of special tax districts. Using geocoding-based tax jurisdiction assignment software, Verizon has improved its compliance with state and local tax provisions by facilitating the accuracy of local level taxation throughout its operating areas. it is also the essential technology for providing service locations (e.g., service stations, hotels, restaurants, etc) along the route. Who Represents Me: Using address validation, geocoding, and geographic enrichment software, the Texas Legislative Council has developed Who Represents Me. This innovative solution provides citizens information about current districts and members of the Texas Senate. Texas House of Representatives, the U.S. House of Representatives, and the State Board of Education. Enriching a Geocoding Solution Both government and commercial sectors provide a variety of databases that can be used for specific spatial analysis purposes. In many cases, vendors have commercialized public domain data available through agencies such as FEMA (Federal Emergency Management Agency), the U.S. Geological Survey, the U.S. Census Bureau, the National Oceanic and Atmospheric Administration, the FCC, and even the Smithsonian Institute. This information has been augmented with additional data from industry or private sources or through their own data collection efforts. Several industries utilize specialized geocode-based databases in their decision-making processes, including insurance, telecommunications, and governmental organizations. The insurance industry can determine the risk associated with Travel Directions and Services Almost everyone has used the Web to obtain driving directions and associated distances from one location to another. Not only is geocoding the underlying technology behind this application 6

7 Business Geographics White Paper insuring property against hazards by utilizing databases that identify locations: At high risk for wind, hail, hurricane, or tornado damage Subject to coastal flooding or located in or near flood plains In close proximity to landslide zones, sink holes, earthquake faultlines and seismic zones, volcanoes, or abandoned coal mines The telecommunications industry can determine: Central office locations and switch center points for determining DSL eligibility Public safety answering points and associated boundaries for emergency dispatching (911) situations Cellular market area boundaries based on FCC area definitions Governmental organizations can deploy spatial analysis to: Help citizens determine their congressional districts, representatives, voting precincts and polling locations, or school districts Identify county boundaries Determine appropriate taxing authorities and tax rates Geocoding solutions can also be enhanced by incorporating data that can be determined from either the location s geocode or the address itself. Several third-party sources provide demographic and lifestyle data that can be appended to individual consumer or household records. The lowest level about which the U.S Census Bureau publishes demographics is the Census Block level. There are over 8 million Census Blocks, which typically encompass a city block in urban areas, but could be several square miles in rural regions. Census block data includes number of residents, number of housing units, median age and median age by sex, number of residents in various age brackets, number of households, average household size, number of households with children, median household income, family income, along with several other fields. A geocoding solution is only as good as its underlying database and data enhancement capabilities Marketing organizations can incorporate this data into their spatial analysis in order to determine where to open new stores, conduct targeted mailing campaigns, or advertise products and services. 7

8 Desirable Geocode Product Features Multiple Methods Based on the data in the underlying geocoding databases, a geocoding software product should be able to function at successive degrees of precision, including street segment, ZIP+4, ZIP+2 and ZIP Code. The geocoding software should return the latitude and longitude of the address as well as an indication of the accuracy level utilized. Multiple Deployment Options While some business situations can be satisfied by assigning geocodes to a group of addresses in a batch environment, other situations require this determination be made to an individual address in real-time. A product that can be deployed in both modes covers a wider variety of situations and allows for new applications based on future needs. Deployment flexibility is further enhanced if the software is available in both thick client/server and thin-client Web-based versions. Application programming interfaces (APIs) should be available so that the geocode software can be called from other software applications. Another important consideration is how the geocoding technology is licensed. While large organizations may wish to directly license the technology, smaller companies, or divisions of large companies, might find it more economical to deploy the technology through an application service provider (ASP). deploy multiple products and/or multiple address parsing and matching algorithms and thus have the potential ability to resolve and standardize addresses a single algorithm might have initially rejected. It is desirable for the address data quality and geocoding technology to be tightly integrated so that both functions can be performed in a single pass against a single database. Having to conduct two separate passes will slow down the overall processing and process the data in a longer period of time. Also, by combining information from the USPS and from a street segment database like TIGER, a more complete universe of address data provides more accurate matches. This process is known as conflation. Since any address verification and/or geocoding technology requires fuzzy matching realizing the input addresses are not always perfect this can lead to false positive matches when matching to either of these databases alone. If 123 Main St is entered, and the TIGER files have only a South Main Street, the software will assume this is correct. But by adding the USPS data, the more complete universe will show that there is both a North and South Main St. In this case, no match would occur because the match is ambiguous, which is better than making the wrong match. Another advantage of using two databases is that an address that could not be found in one database might be found in the other. Address Data Quality and Cleansing Capabilities Accurate addresses are a prerequisite for accurate geocoding. Therefore, it is important that address verification technology be included as part of a geocoding solution. While some geocoding vendors have established partnerships with name and address data quality vendors, other geocoding vendors provide this capability as part of their product portfolio. Some vendors 8

9 Business Geographics White Paper For instance, there are millions of households that receive mail at a Post Office Box in communities that do not offer city-style mail delivery. So while the Smith family receives mail at PO Box 1934, package delivery services such as FedEx and UPS need to know the 131 Elm Street. The USPS will have no record of Elm Street in its database, even though it exists in the TIGER files. Confidence Levels and Distance Ranges Each geocoding technique is subject to varying degrees of precision. Street-segment address-level geocoding techniques are more accurate than estimates based on 5-digit ZIP Codes. Not only should the geocoding software return the latitude and longitude, it should also return an indication of the degree of If You Live Here, The USPS Does Not Know Your Address! 55 Lakeview Drive, Nederland CO Lincoln Street, Carmel, CA 13 Beach Street, Ogunquit, ME th Street, Urbandale, IA Carnation Lane, Surprise, AZ Record Enrichment and Augmentation Capabilities Addresses and geocodes can be the keys to files containing additional data that could be added to the data records. This can range from census bureau demographics to commercially-available income level, purchasing preferences, and lifestyle data. Display and Mapping Capabilities While a picture is worth a thousand words may be a familiar cliche the ability to see a location on a map and view its position relative to other locations, or boundaries, or zones can be insightful. Geocoding solutions should provide this option, perhaps in conjunction with software from established mapping partners. While many people equate geocoding with maps, this is merely one application. In many cases these maps provide a user interface which, while useful for providing initial insight, are not meant to provide detailed spatial analysis. confidence in the results and the maximum possible error. For example, when using street segments, the maximum possible error would be the physical length of the street segment on which the address is located. This might be 264 feet in New York City (using the rule of thumb of 20 city blocks to a mile) to over a mile in some rural areas. A desirable feature of any geocoding product is the ability to generate a confidence surface or buffer area that can be used to define, and perhaps with the help of mapping software display, the smallest possible region in which the address must exist. These buffers should be more than a simple circle with the most probable location at its center, rather they are custom polygons based on what can be determined about the accuracy of the resulting geocode. When used in conjunction with point-in-polygon analysis it would be an advantage if a confidence surface that spanned multiple polygons provided an indication of the probability of falling within each one. If the confidence surface spanned two 9

10 insurance territories it should indicate the percentage of the surface lying in each. If it spanned a floodplain boundary, it should indicate the percentage lying within the floodplain and outside of it. Some geocoding systems have the ability to use confidence surfaces to indicate the maximum and minimum possible distances between a location and another location or even a boundary line. This information provides the maximum possible distance from an address to a telecommunications central office or the closest and furthest possible distance from an address to a coastline. Products that provide this capability have a distinct competitive advantage over those that do not. and providing suggestions as to how other clients with similar issues have utilized geocoding technology. Historical experience supporting a wide variety of geocoding implementations is equally important in ensuring the long-term success of the business objectives. A vendor s financial stability should also be examined in determining future support and product stability and reliability. Match Rates Even if two vendors are using the same underlying geocoding database, match rates will vary due to differences in parsing and matching techniques. Conducting a benchmark designed to reflect your business requirements will provide valuable information in helping you select one technology over another. Vendor Experience and Successes Geocoding applications, while simple in concept, can have subtleties that are not obvious to those implementing them for the first time. Vendor experience, supported by a track record of successful implementations, can prove invaluable both during the planning and implementation stages. A vendor can offer value by suggesting the appropriate data augmentation databases Conclusion While a physical address is of paramount importance for postal delivery purposes, it does not, by itself, tell you where that address is located relative to other locations or if it is located in a flood plain or a specific tax district. By geocoding the address with its latitude and longitude, these determinations can then be made. In order to accurately do this, it is necessary to first validate and standardize the address. While geocoding is the basis for map generation, this is merely one of its many applications. Geocoding is the enabling technology for spatial analysis, determining where one location is relative to other locations or determining the sector or zone in which it is located. 10

11 Business Geographics White Paper Geocode-based solutions can be enriched through the use of data files that contain additional attributes and characteristics that are dependent on location. Many public and private organizations provide such data. Business decisions are only as the good as the data upon which they are based. If an organization bases its decisions on incorrect or incomplete data, these decisions may be flawed. Spatial analysis, used in a wide variety of industries such as insurance, telecommunications, and government, as well as in many marketing programs, serves as a basis for many of these business decisions.a high quality geocoding solution will result in high quality business decisions. While its physical address will allow mail addressed to LOT 54 to be delivered by the postal service, geocoding is the enabling technology for the spatial analysis that will provide additional information relative to its location. About MAS Strategies MAS Strategies specializes in helping vendors market and position their business intelligence and data warehousing products in today s highly competitive market. Typical engagements include SWOT analysis, market research, due diligence support, white papers, public presentations, and helping organizations evaluate tactical and strategic product and marketing decisions. About Group 1 Software Group 1 Software, a wholly-owned subsidiary of Pitney Bowes, is a leading provider of solutions that help over 3,000 organizations worldwide maximize the value of their customer and other data. Group 1 provides industry-leading technologies that allow businesses to cleanse and enrich their corporate data, generate personalized customer communications and integrate and deliver data across the enterprise. These technologies are essential components of enterprise applications including customer relationship management (CRM), enterprise resource planning (ERP) and business intelligence systems. Group 1 offers solutions utilized by leaders in the financial services, banking, GIS/mapping, retail, telecommunications, utilities, insurenace and other industries, including such recognized names as Entergy, GEICO, L.L. Bean, MapQuest, QVC, Siemens, Wal-Mart and Wells Fargo. Pitney Bowes is the world's leading provider of integrated mail and document management systems, services, and solutions. The $4.6 billlion company helps organizatiuons of all sizes engineer the flow of communication to reduce costs, increase impact, and enhance customer relationships. With approximately 33,000 employees worldwide, Pitney Bowes serves more than 2 million businesses through direct and dealer operations. MAS Strategies also assists user organizations in their datawarehouse procurement evaluations, needs analysis, and project implementations. For more information about MAS Strategies, visit its Web site at 11

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