Merchant data sent in by fans of merchants and from merchants themselves is becoming increasingly important. Can it be relied on as a main source, or should it only complement listing data from the big three providers — InfoGroup, Acxiom and Localeze?

We talked to Pankaj Mathur, InfoGroup vice president of business development, about it. Not surprisingly, he has mixed feelings. It is certainly useful and cost effective, and from an SEM perspective, there is sometimes the feeling that “more [data elements] is better,” he says.

But he warns that accuracy and reliability are more important than ever before, especially with mobile phones that can send people to bad locations. Also looming is the sense that merchants are incentivized to misrepresent themselves so that they can boost their search rankings or be found under lucrative-but-wrong categories (i.e., cab companies under “airports”).

InfoGroup (and probably the other leaders in the space) instead take the “trust but verify” approach to merchant data. The company receives 10,000 to 15,000 submissions per month from multiple partners such as OnStar, Yahoo and AOL. “We find that about 50 percent of these submissions are false positive like duplicates or incorrect information, “says Mathur.

In a newly issued article, Mathur goes into more detail about the importance of the duplicates issue. In franchise corporations, for instance, there may be lists of storefronts within marketing departments, operations departments and accounting deparrtments. They don’t always overlap with LBS (location-based services) requests, he notes.

Moreover, retailers often neglect to delete or change storefront information — something that creates a special mess when companies such as Starbucks close hundreds of units throughout the country. Mathur suggests one-step updaters (such as his company’s “Express Update”) are a partial answer. In the meantime, the validated information from the leading listing providers remains in the driver’s seat.