An Introduction to Geocoding:

What every enterprise needs to know about

precision location data

Summary: With the explosive growth of global positioning system (GPS)

technology, organizations and industries all over the world are now poised to
take advantage of geocode data. In this paper, you’ll learn the geocoding
basics: what geocoding is, how geocodes work, and how they can benefit
your enterprise.

Harte-Hanks Trillium Software

Corporate Headquarters
25 Linnell Circle
Billerica, MA 01821
+1 (978) 436-8900 (US)
+44 (0)118 940 7666 (Europe)
Email: trlinfo@trilliumsoftware.com
Web Address: www.trilliumsoftware.com/globallocator
Table of Contents

Executive Summary……………………………………………………………………3

Introduction—Bringing geocodes down to Earth… ……………………………….4

What are geocodes and why do they matter? ……………………………4

Geocoding at the right level …………………………………………………………6

Interpreting the enhancement level code ………………………………....6

Available geocode levels ……………………………………………………7

Precision targeting—True and interpolated rooftop data ………………………..8

Street level positions—Street centroid data ………………………………………10

Broader positions—Postcode, city and region centroid data ……………………11

The Right Solution—Global Locator …………………………………………….....13

Want to know more about Global Locator? ………………………………13

Executive Summary

Geocodes are the exact latitude and longitude coordinates that correspond to a
particular address. Geocodes vary in granularity; the more precise the latitude and
longitude data is to a corresponding location, the more closely it relates to an
address. However, a less precise geocode corresponding to an address doesn’t
necessarily mean the value of the information is not valuable to a company.

There are several different levels of geocoding data. From most precise to less
precise these include:
• Rooftop and interpolated rooftop
• Street centroid
• Postcode centroid
• City centroid
• Region centroid

Geocoding data is quickly becoming mission critical for any industry whose business
relies heavily on accurate location information. Some of these industries include:
• Shipping & logistics
• Insurance
• Consumer credit
• Retail
• Telecommunications

Global Locator, from Trillium Software, delivers a business-ready approach to

geocoding that combines in one simple step real-time address validation with
geocode matching.
 TRILLIUM SOFTWARE

Introduction—Bringing geocodes down to Earth…

If your enterprise uses or manages address information in any way, you probably have
heard something about “geocodes,” a new dimension of location identification that offers
greater accuracy and control.

Yet this promising data set is not easily understood. What, exactly, is a geocode? What
does it mean? How can it be used? And how can geocodes benefit your enterprise?

Answering these and other related questions is what An Introduction to Geocoding is all
about. The goal? To bring an important and powerful location accuracy tool down to
Earth, where it can be easily understood, and so it can be put to use in your business.

What are geocodes and why do they matter?

A geocode is simply the precise latitude and longitude coordinates of a particular

address. Think of it as a universal, scientific way of pin-pointing a location for any place
on Earth.

A geocode is
simply the precise
latitude and
longitude
coordinates of a
particular address.

A geocode identifies an address’ latitude and longitude coordinates.

If we are not map-makers, why should we care? Because geocodes reveal geographical
insights that can have a profound impact on the way we manage operations and control
costs. Consider the stakes in the following industries:

Shipping & logistics: Reducing errors in the crucial “last mile” of the delivery
chain saves time, fuel, resources and costs while improving customer
satisfaction.

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Insurance: Precise location data helps insurers make accurate risk assessments
(floods and terrorism threats, for example) and manage exposure to accumulated
risks that demand precise location information in order to provide accurate
analysis of capacity and capital requirements.

Consumer credit: Understanding transaction locations helps creditors detect

potential fraud, i.e., purchases made from unlikely places for a particular
customer.

Retail: Accurate location data is critical for detailed customer and market
analysis, and for storefront or distribution center location planning.

Telecommunications: Geocodes help providers determine appropriate

infrastructure placements (example: cell phone towers) for expanding networks
and/or customer bases.

In the following pages, we’ll explore the various “levels” of geocode information available
and how they’re calculated, explain one enhancement level code structure, and, most
importantly, help you match the granularity of geocode data to specific industry needs.

Finally, we’ll introduce one geocode resource, Global Locator, which serves as a one-
step solution that matches cleansed address information with precise geocode identifiers.

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Geocoding at the right level

Suppose you need the precise location of a specific place in a city or town. In the
language of location identification, you need latitude and longitude coordinates, also
called “geocodes”. A geocode typically corresponds to a known or given address. But
what exactly does the geocode specify? An entrance? A street? A city center?

That answer depends upon where in the world you are trying to match an address to a
geocode. In some countries the granularity of the match is very specific; in others it is not
as specific. The more precise the available information is for a given location, the more
accurate the corresponding geocode will be.

It’s important to note that less precise geocodes are not necessarily of lesser value to
your enterprise. Depending upon the type of industry your business is in, the level of
geocoding standards – or “enhancement levels” – you will need can be matched easily to
your organization.

But there is one constant you must have with each geocode: transparency. In order to
make an informed business decision based on location, you must be able to assess the
relative precision of the geocodes produced for you in a way that adds value to your
organization without disrupting your current business practices.

Interpreting the enhancement level code

Suppose you are a retailer wanting to know where to place your next ten stores, or an
insurance underwriter trying to assess a flood or earthquake zone. In the process of
evaluating where to place your stores and which streets in a neighborhood are at
greatest risk of a natural disaster, you will want to review several pieces if critical
information before making a final decision. In addition to looking at information tied to
your specific industry, you will want the most accurate location information available.
That’s where a geocode comes in. But, in order to know what a geocode is telling you,
you need to understand how the geocode was organized and put together.

While there is no widely accepted industry standard, the following code system – used by
Global Locator from Trillium Software – is representative of the kind of information an
effective geocoding resource should provide.

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Consider the following code as an example: EL4-P0S4T4R4Z4C4.

What does it mean?

The prefix – “EL4” – reveals the enhancement level, with numeral “5”
representing the most granular, most detailed level, and “0” representing the
broadest, least granular level.

The body of the code – “P0S4T4R4Z4C4” – identifies the components that

were used to match the address to a geocode. Note that the body consists of
letters and numerals. Here’s what they mean:

P = premise/house number, building or PO box

S = street
T = city
R = region/state
Z = post/zip code
C = country

There are only two numeric options in the body: 4 or 0

“4” means the component data was available to make the geocode-address
match
“0” means the component date was not available

In our example, for instance, the 0 following the P tells us that premise/house number
data was not available to make this address match; everything from street to country,
however, was used in the assignment.

Available geocode levels

In the following pages, we’ll examine the following geocode levels:

• Rooftop
• Street centroid
• Postcode centroid
• City centroid
• Region centroid

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Precision targeting—True and interpolated rooftop data

At the most precise enhancement level, EL5, the geocode returns the “rooftop” location of
the address in question. When true rooftop data is available for the address, the geocode
may come in one of three flavors:
• Geometrical center: the physical midpoint of the property’s location

Geometrical center

• Delivery point: where the doorway or postbox is located

Delivery Point

• Property Entrance: the location of the property’s means of access, such as the
beginning of a driveway

Property Entrance

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In many cases, true rooftop data is not available for a given address. But with the right
data and sophisticated software, providers can often interpolate (calculate an estimate
based on known values) a rooftop address.

To “interpolate”
means to
calculate an
estimate based
on known values.

Interpolated Rooftops are calculated based upon property numbers along both sides of a known street.

By dividing a street into segments and interpreting data regarding the property numbers
at the beginning and ending of each segment, the program can make an educated “best
guess” of the address’ rooftop location.

Which industries benefit?

True and interpolated rooftop geocodes are crucial for:

Shipping & logistics companies that need precise information in order to calculate
the most efficient carrier routes and appropriate delivery depots.

Insurance providers whose risk algorithms include location–sensitive information,

such as proximity to flood zones, fault lines, or other hazards.

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Street level positions—Street centroid data

When premise data is not available, geocodes can be calculated based upon the
centerpoint of a given geographic area called a “centroid.” The most accurate centroid is
a “street centroid”—which is EL4 level data. A street centroid is first determined by
identifying the beginning of a street within an address. By dividing a street into segments
with known coordinates at the beginning and end of each one, the geocode provider can
deliver a geocode that pinpoints the center of an address’ street.

A “centroid”
represents the
center of a given
geographic area
or mass.

Street Centroids are calculated by finding the midpoint of a street based upon street endpoints and street
segments

Which industries benefit?

Street centroid geocodes are useful for:

Fraud Detection Programs: Geocode data can be used to create customer

profiles to track purchases and purchasing patterns. Purchases that conform to
existing patterns would be less suspect, while unusual behaviors might trigger
further investigation.

Insurance Carriers: Geocode data can be used to evaluate the risk of “perils”
that are less precise in location, such as storm or earthquake zones, and high
crime areas.

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Broader positions—Postcode, city and region centroid data

When the available address does not include premise and street information, or if the
available information cannot be validated due to extreme typos or other errors, geocode
providers can use detailed street segment reference data to calculate centroids by
postcode, city or region.

In all three cases, the centroid does not return a true geographic center, but an estimate
skewed by the density of data points within that given area. A city centroid, for example,
would not identify the physical center of that city, but the midpoint within a concentration
of known addresses. In most cases, this skewing is favorable, as it reflects information of
greater practical value to most end users.

Available centroids include:

Postcode centroid: EL3-P0S0T4R4Z4C4

Calculated by determining the average latitude and longitude coordinates of all
unique street segments with an assigned post or zip code.

City centroid: EL2-P0S0T4R4Z0C4

Calculated by averaging the coordinates of unique street segments within a city.

City Centroid Example

Region centroid: EL2-P0S0T0R4Z0C4

Calculated with unique street segment averages within a region.

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Which industries benefit?

Broader centroid geocodes are useful for:

Fraud (credit card or identification theft) can be exposed when transactions

occur in locations too distant to be crossed within a given time period – for
example, a credit card purchase initiated in Beijing one hour after a purchase in
Amsterdam would arouse suspicions.

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TRILLIUM SOFTWARE

The Right Solution—Global Locator

Offered by Trillium Software, a leader in data quality, Global Locator delivers a business-
ready approach to location identification that combines real-time address validation and
geocoding in one simple step.

Global Locator offers:

• The only geocoding solution that provides enhancement level codes that
expose granularity, allowing you to make informed, confident decisions based on
the geocodes you receive.
• The only multinational solution available, with comprehensive high-resolution
data sets from more than 60 countries and city-centroid level data for more than
2.2 million towns and cities around the world.
• Unicode capability for non-Latin character sets.
• Compatibility with multiple platforms (Windows, Unix, Linux and more) and
APIs.
• Customizable options for input format, process and output format.

Want to know more about Global Locator?

To request more information about geocoding or to have a Global Locator Sales

Representative show you a demo and explain how geocoding can benefit your business:
• Visit: www.trilliumsoftware.com/globallocator
• Email: trlinfo@trilliumsoftware.com, or
• Call: 978-436-8900 (US)
44 (0)118 940 7666 (Europe)

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