GeoTargeting Delivers for Local Business

GeoTargeting Delivers for Local Business

by Sharon Fling

For all we hear about the global reach of the Internet, the fact remains that most people’s lives – both business and personal – are local. We live in cities or towns planted firmly on planet Earth. 

While worldwide information is great, people need to know what’s happening where they live. Life is local. If the Internet is to be useful for everybody, it must be too.

Thankfully the local online market has finally started to take off. As more local information becomes available online, people are starting to look at the Internet as something useful instead of a passing fad.

And where people go, advertisers are sure to follow. The amount of money spent on local online advertising has steadily increased in the last few years. According to The Kelsey Group (http://kelseygroup.com), geocommerce, or local advertising revenues, are expected to reach about $50 billion by 2006.

Here’s another reason the local online market is heating up: technology. The ability to target online users by geography – GeoTargeting -- allows websites to present ads only to consumers who live in certain geographic location. Local advertisers can now be sure that only local eyeballs will see their ad.

Localized advertising is very targeted, and can be used to quickly and cheaply test online campaigns. Local merchants can use a combination of online and offline advertising to drive traffic to their store and website. 

Common GeoTargeting Methods

GeoTargeting has great promise, but it’s not without problems. The main issue is accuracy.  There is a big difference in the accuracy of methods used to target based on user location.

The most common methods are:

•   Targeting based on I.P. address (a unique string of numbers that identifies a computer on the Internet)
•   Targeting by Zip Code

I.P. Address

This method works by using the I.P. address to identify a user’s geographical location. It can home in on a user’s city – sometimes even their zip code – within the U.S. and internationally.

Many of the major geotargeting vendors use this method, including www.quova.com, a major player in the geolocation market.

There are a couple of weaknesses in the I.P. method. The biggest problem: for various reasons, not all I.P. addresses can be mapped to a geographic location.

A good example is the AOL user population. Because of the way AOL handles their web requests, all of their users appear to be coming from Virginia. Of course that’s not true.

So when it comes to geotargeting by I.P. address, all AOL users have to be eliminated. That’s a big chunk of the American population.

Zip Code

Since all Zip Codes can be easily matched to a location, geotargeting by zip code works fine – as long as the person is telling the truth. People lie all the time when signing up for free services and filling out survey forms. 

Still, what we have now works most of the time, and as the technology improves, so will the results.

Geotargeting Solutions

Geotargeting is done in a number of ways, but they all fall into one or more of the following four basic categories:

1. Localized content – This is advertising or information that applies to a local or regional area. Some providers of localized advertising include online versions newspaper, television, and radio; also includes city guides, yellow pages and directories.
   
   
2. Banner advertising – Most banner ads are sold through one of the online ad networks, and all of them provide some sort of geographic targeting and demographic selection. Some ad networks include Doubleclick.com, ValueClick.com, and Commission Junction (www.cj.com). 
   
   
3. Registration Data - Most sites that provide services such as email or internet access require users to register. That process often includes zip code, which can be used to target by city or even street.
   
   These types of sites can also use cookies (small bits of data stored on the user’s computer) to recognize the user each time they return by matching it to their registration data. Examples include aol.com, hotmail.com, yahoo.com, netzero.com, etc.
   
   
4. Geographic Data Providers – Providers of geographic specific data, such as phone directories and map services, can easily serve up local ads. That’s because to get the information they need, people have to give either zip code or area code, which is easily mapped to location. Examples include mapquest.com, switchboard.com and weather.com.

New sources for geotargeting are popping up all the time, as traditional postal list owners such as magazines and catalog vendors realize they’re sitting on a goldmine of customer information. As the technology gets better, you can expect geotargeting to become even more widespread. 

The bottom line? For local business, geotargeting will help to deliver on the oft-repeated promise of a level playing field.  Forget the global economy ....the future of the Internet is local. 

Sharon Fling is the author of "How To Promote Your Local Business On the Internet" (available at http://as.localbizpromo.com), and publishes an electronic newsletter that gives business owners tips, tools and resources for targeting local customers. To join her mailing list, send a blank email to: subscribe@localbizpromo.com or visit http://www.geolocal.com.