What is location targeting?
In order to be precise and connect your brand to a local audience, you need to define a location in which you would like to advertise your business. You can define very large geographic areas such as the United States or Europe and narrow it down to specific countries, regions, cities, ZIP codes, or even exact points on a map with a radius as small as 100 meters.
It all depends on the type of business you want to advertise, the size of the audience you would like to reach and the budget you are willing to spend. It is best to consult with our in-house experts who will be able to assist you by suggesting the best and unique approach for each campaign you are planning to execute.
Types of location targeting
There are two main types of targeting that can be divided into more subtypes. The first type is called geotargeting, which is based on the user’s IP address to determine their geolocation. The second type is hyperlocal targeting, which is based on the user’s GPS coordinates (latitude and longitude).
Country, region, city, or ZIP code targeting (geotargeting)
By connecting public IP-addresses to actual locations, you can target all users that are located inside (or outside) a specific area or location. This can be as narrow as one or multiple ZIP (postal) code(s). Only when a user has an IP address that is registered to the targeted region, the advertisement will be shown.
Hyperlocal targeting rules allow you to target users who are/are not in the defined area in real-time. What differentiates it from Location targeting is that Hyperlocal Targeting uses GPS coordinates instead of IP address to identify the potential user and show relative ads in real-time. This type of targeting is often connected to in-app advertising and requires consent from the user for sharing their location data.
Geotargeting can be used for a large national campaign, or to target one or multiple regions around dealers or stores. In combination with our Multi-technology, it’s possible to create many local campaigns at the same time. Due to the combination with display on websites, geotargeting is the best choice for branding purposes, and early phases of the marketing funnel when it comes to products that have a relatively long sales cycle.
Even though hyperlocal has actually been around for a while, the popularity of smartphones and mobile devices now makes it even more valuable and a must-have strategy for every business with a physical presence.
This type of advertising can be a super targeted and niche strategy in your media plan. For instance, it can be a marketing campaign targeting people that are walking past a local grocery retailer, raising awareness about discounts that are available only from 1 PM to 4 PM at that particular location.
This makes hyperlocal targeting a useful form of advertising for broad audiences and fast-moving products that are often bought impulsively. With a hyperlocal targeting strategy, you can increase the foot traffic to your physical store, deliver personalized ads, and ensure that your loyal customers are always reminded of available benefits.
So, which one you choose depends on the size of your business and the overall media strategy that you are following. If you’re running a large enterprise, you’ll likely try to reach potential customers via national ad campaigns, as well as drive local awareness in addition. If you’re a small bike repair business in Amsterdam, running only hyperlocal campaigns might be the most effective option for you.
Discrepancy with geotargeting
Due to the nature of the programmatic real-time bidding technology and privacy initiatives that come together (e.g. GDPR), in some cases, full IP addresses are not received and the last byte is hidden for legal reasons (e.g. 127.0.0.* instead of 127.0.0.1).
As we depend on the external geodatabase and detect user locations by IP addresses, geotargeting might not work as expected and users from nearby locations might be targeted. Based on industry averages, note that usually at least 10% discrepancy is expected.
While hyperlocal is a more accurate strategy and GPS coordinates are passed without any truncation, some delay in location recency can be expected as well. E.g. some mobile applications will refresh the user's location only once in a while to save battery, while others will do that very often to ensure the right user experience.
If you are delivering impressions outside the targeted location more than 10% of the time, you might want to review the list of ad exchanges you are buying ads from, as well as domains or apps in combination with geolocations. Then, you can remove the traffic sources that cause more discrepancy that it is expected.
At the moment, the industry lacks a unified solution that all campaigns could use in order to make the location targeting more precise. However, here are some tips that can be followed and implemented right now:
If your brand allows you to freely balance between delivering impressions on apps and websites, consider creating two separate strategies per location - one for hyperlocal and one for basic geotargeting. This way, you can shift the budget to the strategy that brings you better results (e.g. clicks and conversions) or to the one that gives you better accuracy
Regularly generate (or request) a report on inventory sources or domains combined with targeted locations. This way, you will be able to identify and eliminate traffic sources that cause most of the discrepancy
If this is not your first campaign, consider building a whitelist of websites and ad exchanges that generate the most accurate traffic when it comes to location targeting. This way, you don’t have to reset the optimization for every new campaign.
Constantly analyze the outcome and narrow down your campaign settings in order to focus on the traffic that is most suitable for your business. Over time, you can come up with a perfect combination of device types, operating systems, websites, and creative sizes that will allow you to appear in the top placements, as well as provide you with the best click-through rates and the least discrepancy.
Programmatic advertising is a very wide market that can bring completely different results for each campaign you are running. However, this allows you to narrow down the settings ultimately so you are showing your ads only to users that ideally fit your customer profile. Behaviour, location, time of day, screen size - everything is under control and can be leveraged to achieve the best and most personalized results for every business.