Reach Enablement

Geocodes Guide: What is Geocoding and How to Implement It

July 1, 2022

Large and small-scale businesses require reliable information for quality delivery. The most apparent parameter you need to consider is place coordinates. Sending an expensive delivery to Portland, Maine, instead of Portland in Oregon would be a disaster. That's why businesses use geocode to represent a geographical location or object.

Would you like to know whether your business can benefit from geocoding? Learn how this technology works and ways to implement it here.

What is a Geocode?

A geocode is a universal identification code with latitude and longitude coordinates used in different business and marketing spheres. The geocode is an inherent element of any geographical information system (GIS) that visualizes the map and corresponds to a physical address or location. If, for example, you'd like to find a geocode for the Colosseum, you can use the Google Maps API and discover it is 24.4068, 38.9364. 

What is Reverse Geocoding?

While geocoding is converting an address into a geographic coordinate, reverse geocoding is the conversion of geographic coordinates to a readable address. Those can also be considered as an encoding and decoding of a coordinate.

Reverse geocoding is vital in the daily life of an average user. Let's say you have specific coordinates and wish to find out the address of this location. Reverse geocoding allows you to locate nearby places and addresses. 

Reverse geocoding is often used in the most popular GPS navigation mobile applications. To understand how it works, try to remember the last time you used Google Maps:

  • When entering a specific address geocoding system transfers your input into certain characteristics according to the rules in its code. 
  • Those can be a number, name, and type of the street. These parameters are called elements. 
  • Geocoding system can create multiple interpretations of the same address. For example, the word "square" can be a type of street or its name. 
  • The algorithm searches for all the element combinations, compares them to calculate the most appropriate one, and gives you the address you are looking for.

What is Geocoding Software And When to Use It?

Geocoder is special software that turns information from an address to coordinates. Most of the geocoders require a specific street or geographic location. When searching for the Colosseum geocode, you need to know that it is located in Piazza del Colosseo, 1, 00184. 

Why do businesses use it? Because transforming information into codes is much easier than writing street addresses. It is also more accurate and convenient for creating maps and other uses.

Science

Conducting research, especially with large samples on vast territories, is almost impossible to imagine without geocoding. It simplifies contacting the subjects and monitoring the required data. That leads to more accurate results and allows to broaden the research area.

Logistics

Geocoding is used to optimize deliveries and trade routes. Both large and small businesses require accurate addresses to calculate the fuel and delivery price. 

Insurance

Insurance companies need geocoding to help customers with policy evaluation and finance management. It offers more accurate data to help insurers minimize risks and improve service speed.

Finance

Geocode data is helpful in simple scenarios such as finding an ATM or global ones like analyzing bank transaction locations to identify fraud and tax evasion. 

Marketing

Geolocation is crucial data in the marketing field. It is used to advertise more relevant products, research the target audience, and find new customers. Customers' location can provide information about their financial capabilities, needs in a particular area, and local competitors.

What Does the Accuracy of Geocoding Depend On?

The overall accuracy of geocoding depends on several parameters:

Method of location representation

The father of geocoding is Roger Tomlinson, who invented it in the 1960s to store and analyze data from Canada Land Inventory. Since then, different methods of representing location have appeared, like ZIP+4, interpolated, parcel centroid, and rooftop codes. Most modern geocoding technologies rely on them. The accuracy of each may differ, but the principle of finding latitude and longitude coordinates remains the same.

ZIP+4 Level 

These codes are used to track a postal delivery route. Such a route may consist of ten to twenty addresses while remaining relatively accurate. ZIP+4 Level codes provide a decent way of geocoding for blocks in urban areas.

Interpolated Geocodes

This method uses math operations to arrange addresses between the specified points at regular intervals. The interpolation runs automatically, so you won't have to calculate anything manually. Interpolated geocodes are mainly used for street-segment levels as this method has considerable flaws. The position of an address calculated during interpolation may differ from the real one.

Parcel Centroid Codes

You obtain parcel centroid codes based on the boundaries of a property. When the property is accounted for, you put a geocode in the center of the parcel. Such geocodes require more data, making it quite an expensive delivery option.

Rooftop Geocodes

Most of the software we will discuss a bit later works with rooftop geocoding for a reason. This is a combination of parcel centroid and interpolation calculations combined with approximate data points, which is the most accurate, but expensive method discussed. It is a fast and precise method that business owners often choose.

Reference Data

The algorithm needs an address-containing dataset and the associated coordinates for precise and accurate geocodes. Those should be used as references during the search. The quality of data gathered may seriously affect the quality of a geocoding process no matter how good the search algorithms are.

There are three main ways to get reference data:

  • Public Sources

They are usually free but are pretty difficult to handle. You have to maintain and customize the data by yourself, and the accuracy of specific locations may be low.

  • Commercial Sources

They ensure different precision levels and are actively maintained but require a license.

  • Public Vendor

Those may differ in price and quality. The most popular is Google datasets which provides a lot of user data and is easy to apply with its free API.

Analyzed area

Testing shows that the accuracy of address search may also vary greatly depending on the analyzed area. For instance, Environmental Health exposure assessment in epidemiological studies research of 2017 shows that geocoding accuracy is higher in urban areas than in rural ones (74,5% vs. 10,5%).

The research compares a free online geocoding service and an in-house geocoder. The results are surprisingly similar, while the latter method remains more effective.

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The Best Free Geocoding Applications

The geocoding applications can perform single or batch geocoding. You use single geocodes if you need a quick search for one address. Typically it is suitable for simple operations by regular users. When geocoding for business services, API-based geocoders are preferable. These are usually free for a limited number of searches and are used for tracking multiple addresses.

The APIs below have a limited number of free searches available. You won't notice any difference being a regular user, but large-scaled business owners should mind limitations.

It is important to note that choosing an existing API is much more convenient than creating your own. Here are several reasons:

Maintenance

Many APIs are already available in a customizable form. You don't need to overdo much when using them. The service provider takes care of everything, from updates to technical support.

Cost-effectiveness

Integrating any geocoding API is not that expensive, especially for a large business. Building your application would require incomparably much time and resources. Moreover, most options written below are free and easy to use.

Wide range of choice

There are many APIs to choose from. In most cases, they are easy to integrate with your system, and their basic functions are free, so it won't be a problem to test them and choose the best for yourself.

As for some free public batch geocoding options, we can recommend:

Bing Maps API

It doesn't have the most vibrant UI and won't offer you a complete design studio, but the BING location API does its job and does it well. Its main advantage is that it is free for developers, educational institutions, and non-profit organizations.

It can be modified with Javascript and TypeScript and is relatively easy to implement into your system. BING Maps API is used with many default Microsoft products. It helps to optimize track routes and travel maps and constantly improves with the help of neural networks. BING isn't unique, but you should try it, especially if you are an independent developer or use Microsoft products in your business strategy.

Google Maps

Google Maps is one of the most popular geocoding APIs, so it's no surprise we recommend using it. It is implemented in many systems and has over a billion end-users. They gather information and reviews about the places and roads worldwide. Almost any corner of the Earth has been visited by a Google car or photographed by a regular user. Besides, Google is a financial giant, and it regularly releases updates. 

Google Maps API is simple to use and provides business users with 40000 geocoding results per month. You can't display results outside of a Google Maps session, but if you implement it in your product's UI, you won't need that. For these reasons, you may meet Google Maps API in different products made by independent developers or large-scale businesses. 

USPS Web Tool APIs

USPS Web Tools gives eCommerce website shopping carts and shipping software access to USPS data free of charge. Its primary focus is to make shipment easier by using geocoding data to track addresses more effectively. This way, the USPS solution may help with marketing a direct mail campaign or tracking the deliveries.

Yahoo API

Yahoo API is a geocoding tool that isn't the best in speed, but it's still free. Yahoo lets you search 50000 addresses daily, which is more than Google's monthly limit.

Overall, it provides its users the same functionality as its Microsoft and Google competitors but works a bit slower. This can be explained by Yahoo shutting down Yahoo Maps servers. Still, it works, and it is cheap, so why not give it a try?

Use Geocoding Data With Inkit Send's Direct Mail Automation

Geocoding is a great way to optimize many processes. One of them is direct mail. Printing and mailing require a lot of financial and human resources. Hence, it would be a good idea to gather geocode data and use it for optimization.

Geocoding data can improve direct mail marketing profits. Geocodes lower the risk of undelivered mail, help gather region-based ROI data, and reduce the marketing campaign price.

One of the most effective ways to use geocodes is to implement them into your CRM and existing tools. There's nothing better than the automatization of routine processes like customer communications and sending direct mail. Inkit Send allows you to do that practically at any scale. Using the geocode data, it builds, sends, and manages any paper communications. Moreover, the mail it sends is highly personalized and targeted.

Start a free trial now to automate your offline communications.

Final Thoughts

In conclusion, navigation and map building are essential to many processes like direct mail delivery. Geocoding and recent technologies allow us to find what we need faster and more efficiently, thus improving our lives. We hope our guide has helped you understand the basics of geocoding, and you can now use it in your business strategies.

Combine geocoding software with Inkit reach enablement tools to make the most of your direct mail marketing strategy and offline communications. The platform can also help you automate many critical business processes and become more productive.

Ready to captivate your customers?
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By submitting this form, I confirm that I have read and understood Inkit's Privacy Policy.
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