The higher the precision is, the less available inventory you will have for the campaign. To be clear, we do not take lat:long information sent in the bid request at face value, but we follow this validation process:

If we get lat:lon coordinates, we compare them with the lat:long position that can be inferred from the IP address provided with the bid request.
If we get lat:lon coordinates with less than 4 decimals in the bid request, we won't consider them high precision. They have to have 4 decimals at least.
If both are within a short distance (currently 10 meters) we classify the bid as “low precision”. This is the same classification that is given to any bid whose location is only calculated based on the IP address (either by mediasmart directly or by the ad exchange).
Some ad exchanges have all bid requests considered "low precision" because of suspicious observed patterns.
If a specific location has passed the filter above, but we get more than 5 bid requests for that same location within 30 seconds, that location will be degraded to “low precision” as well.
If we get lat:long coordinates that pass the two filters above, we consider the bid “high precision”.
If coordinates do not pass the two filters above, they will only be considered in campaigns configured with "low precision" or "medium precision" depending on the GDPR signal of the corresponding bid request.
Campaigns configured with low precision will use the inventory that comes with no lat:long coordinates but an IP address. The IP address is checked against the database of our provider Maxmind, which returns the corresponding lat:long coordinates with a level of precision. Only coordinates with a certain level of precision (see above) shall be considered in geofenced campaigns, depending on the campaign configuration. Coordinates with an accuracy level of more than 50 km are always discarded in geofenced campaigns, no matter the level of precision, among other things because they are expected to include Data Sinks (default lat:long coordinates used when the location cannot be calculated).
Campaigns configured with medium precision will use high precision inventory plus inventory that comes only with 2 decimal digits for lat:long only because the user has not opted in to share their precise location.

Note: Take into account that using IP addresses to determine location is inherently inaccurate. Here's a good article that describes this. We trust Maxmind to determine the level of accuracy of the mapping between an IP address and the corresponding lat:long they provide.

Geolists

What is a Geolist?