All Geotargeting Methods Are Not Created Equal

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Geotargeting is a proven performer for digital marketers. The ability to target digital audiences with greater location-specific precision means wasted impressions are reduced — and by focusing a campaign on the the parts of a population for whom it’s most relevant, a marketer can increase the likelihood that consumers will click on their ad. As a result, geotargeted ads can command a 30 to 40 percent premium over non-targeted ads. With numbers like these, it’s no surprise that a recent Borrell Associates report predicted targeted online display advertising to grow 868 percent by 2016.

But trying to match a product, service or message to a consumer’s specific location is not so simple. Social media and mobile devices have changed the face of geotargeting. So, successfully applying today’s methods of geotargeting requires careful thought and planning. Digital marketers, therefore, should be aware of the merits and challenges of each type of targeting method. Below is a hierarchical overview of the methods of geotargeting currently available:

IP targeting identifies the geographic location associated with an IP address, enabling targeting where the user actually accesses the Internet down to the Internet Service Provider’s end-point equipment. IP targeting is the most versatile targeting method and it generally should serve as a ubiquitous first line of geotargeting for online ads, websites or apps, to supply content that is generally targeted to the user’s local area (and possibly enticing a user to opt-in and supply more information). It can also fill in the gaps where other methods fall short, for example when mobile users do not opt-in to location-based services on their devices. With trillions of IP-based look-ups a day and more than 13 years on the market, IP targeting is a proven way to get instant and reliable data. No user interaction is required. There are no legal issues because the individual isn’t targeted―just the node up the road. However, this method can only target down to a postal/ZIP code level, making the last 1,000 feet an issue.

Location-as-a-service solutions sit between cellular carriers and developers, using cell phone numbers to target users based on cell tower locations. Primarily used in the financial sector for fraud prevention and authentication, this method is just now finding marketing applications. It provides an alternative for developers who can’t feasibly buy data directly from carriers, but vendors offering these solutions must have a comprehensive partner network of carriers to provide access to a reliable location database. This method touts its ability to identify location down to the granular level. However, speed of service can be an issue, with delays of up to several seconds to resolve location. Additionally, users must opt-in to this service.

WiFi triangulation technology works by sniffing for WiFi networks that are in range, then measuring signal strength and comparing those results with a database. Urban areas are typically ripe with more than enough WiFi networks to gather accurate data. To maintain an accurate database, service providers constantly need to update a catalog of hotspots, many of which can come and go like the wind, affecting accuracy. Accuracy typically matches or surpasses cell tower triangulation, identifying location within hundreds of feet. However, results may not be instantaneous, and users are required to opt-in to the targeting.

User-supplied location information gathered through registrations or drop-down selections, for example, is only helpful to the extent that users agree to provide it. Even when they do, it’s not always comprehensive and accurate―sometimes even intentionally misleading, making it unusable for fraud or authentication purposes.

Cookies logged on a user’s machine allow sites to store previously entered location information. However, this is subject to a user providing location information and the cookie not being deleted. Cookies have increasingly come under fire for being invasive. Cookies are also notorious for serving up the wrong information at the wrong time. As an example, if a user is cookied in Atlanta and then travels to San Francisco, targeted information on local restaurants would be off by some 2,000 miles.

Location-based proximity networks immediately turn the physical proximity of a user into a local service environment, often extremely accurate within 200 to 900 feet of the point of purchase. Most applicable to big retailers, malls and venues, this method has limited broadcast with proximity access points strategically placed throughout high-traffic areas. Relevant content is pushed via WiFi and Bluetooth to consumers’ phones, allowing them to interact with up-to-date information and promotions. This technique also requires users to opt-in.

Global Positioning System (GPS) is a space-based satellite navigation system maintained by the U.S. government that broadcasts location signals down to Earth and is freely accessible to anyone with a GPS receiver. This method is the most accurate, within a few feet. This type of geotargeting is not realistic for desktop users as it’s application-based (not browser-based) and requires user permission to retrieve and deploy on smart GPS-enabled devices. There are many legal and privacy issues, along with some latency challenges. The technology doesn’t perform well in dense urban areas and is often blocked in tunnels and around skyscrapers.

With all these options, what dictates when marketers should use one method over another? It depends on what message they want to convey to whom and when, along with how much contact and engagement they want with the consumer. An aggregated strategy is often best. Often, starting with an instant “first cut” of geotargeted content using IP targeting and then encouraging users to opt-in to get more relevant geo-targeted content is the optimal strategy.

The social-mobile-local movement will most certainly drive even stronger interest in and use of geotargeting. We’re also seeing more people willing to give up location information because they’re starting to see value in return. A recent Street Fight poll showed more than half of consumers who own handheld devices would consent to a smartphone app that followed their every move if they were to receive half off of all store purchases. While ongoing privacy concerns and do-not-track standards will continue to be at issue, compliance with these will only produce innovations in the technology that give marketers even more options.

Rob Friedman is Executive Vice President and co-founder of Digital Element, an early pioneer and a dominant player today in the hyperlocal IP to location data industry. Since 1999, Rob has worked with the world’s largest networks, websites, video portals and social networks to deploy effective geotargeting solutions across multiple industries.