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Internet advertising has seen a rapid proliferation over the last decade and in 2012 is predicted to outrank print ads, becoming the second-biggest global media category after TV.

The downside of this explosive growth is that consumers are becoming overwhelmed with commercial messages, making it increasingly difficult to get what’s relevant, important and interesting for them.

As such, it has never been more important for brands to cut through the advertising clutter and reach the right digital audience.  

So how can brands ensure that their digital marketing efforts connect with consumers instead of adding to the noise?  

The value of IP geotargeting

IP-based localisation or geotargeting of ads has for a long time been identified as one of the key enablers of higher returns.

The ability to target ads based on highly accurate location-specific information, where relevant, right down to the postal code level, improves the precision of campaigns and equals a dramatic reduction in wasted page impressions.

In addition, geographic ad targeting can increase click through rates by as much as 300%. For brands, this delivers a double bonus of reduced costs and increased revenue.

This is, of course, good news for any organisation advertising online, but it is particularly positive for the growing number of online businesses whose entire revenue depends on charging for advertising, such as ad networks and publishers.

These types of companies can at once segment their inventory much more intelligently, and significantly increase revenue, since geotargeted ads command a 30 to 40% premium over non-targeted ads.

IP geolocation also gives companies the ability to target users based on additional parameters such as connection speed, domain or whether the connection is home or business. These extra IP-based data parameters provide even more pinpointed targeting options to build immediate connections with online users.

Practical examples of IP intelligence in action

Many will be familiar with some of the more obvious applications of IP geolocation in advertising, such as localising promotions around physical stores to drive footfall.

However, there are many unique ways to apply IP Intelligence, as highlighted below:

  • Deploy IP Intelligence to target “clusters of similarity”. For example, government promoted “quit smoking” and “healthy heart” public-service campaigns can be targeted to areas with high rates of smokers and heart disease.
  • Add location as a criterion to audience profiling to facilitate the development of true geo-demographic clusters, which are proven to deliver higher CTR’s and command a higher premium.
  • Combine IP geolocation with other ‘’real world’’ events such as weather. For example, a clothing retailer can promote warmer clothing when a cold front moves into a certain area, aligning ad targeting to real-world events.
  • Analyse buying patterns using location to maximise media budget mileage. For example, a travel company found that holidays to France were more popular in the south of England, as opposed to the north. Having relied heavily on retargeting for the bulk of their display ads (a relatively high CPM approach), adding location meant it was possible to target only the south with run of network ads, thus reducing the cost of campaign CPMs.
  • Deploy IP location data to fill the mobile targeting gap. As mobile users are increasingly connecting via IP-based Wi-Fi networks, mobile ad networks are missing significant revenue generation opportunities. Using IP Intelligence allows ads to be targeted to Wi-Fi users based on location, without relying on software downloads or user opt-in, thus optimising revenue for the ad network.
Kate Owen

Published 16 November, 2012 by Kate Owen

Kate Owen is Managing Director, Europe at Digital Element and a contributor to Econsultancy. 

2 more posts from this author

Comments (3)

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Adrian Moss

Interesting article. As there is an ever increasing drive to analyse and justify digital spend this type of technology is likely to get increasingly important.

I can also see it being combined with wider data mining of site traffic to provide more sophisticated ways of analysing what stock to sell when on e-commerce platforms.

over 3 years ago

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Andrew Twaits

Doesn't work within Australia (at a state/territory discrimination level) unfortunately. Too much re-routing of traffic by the major ISPs to get a fix on where a person is actually located.

over 3 years ago

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Kate Owen

Andrew - that depends on the technology and methodology employed by your service provider. There are effective techniques out there that get around the difficulties associated with ISP backhauling. If you'd like more information on this feel free to contact me: Kate dot Owen at DigitalElement dot com.

over 3 years ago

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