What is geotargeting?

Geotargeting is a method that allows advertisers to serve ads to consumers that correspond to their location (country, region, city, zip code). Geotargeting is limited by law in some locations.

This advertising tactic utilizes location and demographic to reach a prime market of individuals to create advertisements aimed at specific behavior. The information is gathered from cellphones and is privacy-compliant. When someone is searching for information, ads can then appear for organizations nearby. Setting a specific ad location scope helps organizations avoid wasting marketing funds. Ads can be used in real time based on user location or location history. Geotargeting can also be used to measure visitation history and create more relevant ads based on that information, leading to improved responses. 

How to use geotargeting to advertise successfully 

Initially, information is gathered via cell tower or user’s location. This allows organizations to find their users. Advertisements can then be created and distributed within a strict geographical location. Demographic information can be used along with location to specify further. Geotargeting also allows for a controlled audience. The use of a controlled audience and location can further reach potential users. 

Benefits of geotargeting 

  1. Marketing Budgets: Using geotargeting improves marketing budget allocation. The budget will be going directly to users within a certain vicinity and demographic most likely to react. Location-based ads can be more personalized so higher return can be recognized. Having a smaller location-based ad costs less and attracts more users. 
  2. Hiding Ads from Competitors: Geotargeting includes only using certain IP addresses, which means the IP address of competitors can be excluded. This means not spending marketing funds on employees and users of the competition. It also allows time to get messages out before the competition can see it and react.
  3. Local Relevance: This is especially beneficial for local organizations. A small organization doesn’t need a worldwide audience, so through geotargeting the audience can be limited to a certain city or county. Larger organizations may also find benefit from this to reach specific types of users. 
  4. Product Development: Geotargeting can be a method used to test a marketing idea and new product. This can be done on a small scale before launching large advertisements. It can also be helpful to try several different locations to see which brings best results. Another benefit to using product development is that it can be continuously developed, and the location can continue to be widened.

Geotargeting vs. geofencing

Geofencing creates a fence around specific geographical areas using IP addresses. Users within that area will see these advertisements. This approach can be used with certain neighborhoods, university campuses, or stadiums to send ads for local organizations. Geotargeting is more specific in that it uses a specific area, but also certain characteristics. With geofencing, ads are triggered when a user crosses the boundary of the geofence, but with geotargeting the message is generally aimed at people already in the area. Both are able to use specific timing, so ads are only shown at specific times. These technologies also allow users to spend less money marketing to less desirable areas.