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Group 1 Software and MAS Strategies present a white paper on the importance of geocoding for today's enterprises.
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What is Geocoding?
While a good address can help ensure mail delivery, it cannot be relied upon to make business decisions when accuracy really counts. In order to maximize your profits, your business processes need to be based on true locations - which requires exact longitudes and latitudes. The process of determining these coordinates and linking this intelligence to a street address is known as geocoding.
Geocoding
Some people confuse geocoding with map generation, but that is only one application. The underlying location data provides a powerful tool that can help drive business decisions, especially when combined with spatial analysis.
Spatial Analysis
This is the process of comparing one location in relation to another. Another term you may hear is "conflation", the combing of two distinct maps into one. This allows you to:
- Compute the distance between two points
- Calculate the distance to a specific boundary
- Determine whether an address is within a specific zone
Understanding the Different Levels of Accuracy
No database currently exists that includes the specific and exact geocode for each and every postal address. So the accuracy of a geocode assignment can vary based on the method used. For example:
- ZIP Code Geocoding
- This assumes that the location for every address in a ZIP Code is the mid-point location for that ZIP Code. This is obviously the least accurate method.
- ZIP+4
- This provides a more accurate determination, but you should be aware that ZIP Codes are designed to help the post office delivery mail, and often do not correlate with your boundaries. And while latitudes and longitudes are permanent, approximately 600,000 ZIP+4 Codes will change every month. Example uses for this level of accuracy include:
- Site Selection
- Demographics & Consumer Segmentation
- Target Marketing
- Retail Applications
- Address Level Geocoding
- This method assigns latitudes and longitudes based on knowing the geocodes at the intersection of the block or street segment containing the address. This is a far more precise approach. Example uses for this level of accuracy include:
- Insurance Territory Assignment
- DSL Loop Qualification
- Risk Exposure Analysis
- Proximity to Services
- Vehicle Routing
- Point Level Geocoding
- While data is not yet available to pinpoint the exact location of every single business and household, the depth of this type of data increases every day. Point-level geocodes provide the most accurate determination. It provides advantages over address-level geocoding when there are long street segments or cul-de-sacs with irregularly spaced addresses. Example uses for this level of accuracy include:
- Distance to Coast
- Tax Determination
- Delivery and E-911 Services
- Flood Zone Determination
- Homeland Security
- Mapping with Aerial Imagery
The level of accuracy required may vary based on your specific business application. Pitney Bowes Group 1 Software provides a "confidence level" on every geocode assignment, so you can make more informed decisions.