Geo-targeting your online advertising
OTOi, Marketing Services Team | One To One Interactive
October 31, 2002
Overview
Geo-targeting online is becoming an increasingly valuable tool for
national marketers as they look for ways to tailor messages and
offerings to customers living in geographically diverse areas. In
addition, businesses focusing solely on certain geographic
locations are looking to geo-targeting to help them tailor messages
and offers to customers in their local areas with limited waste of
advertising dollars.
That said, the amount of money spent on local online
advertising has steadily increased in the last few years. According
to the Kelsey Group, geocommerce, or local advertising revenues,
are expected to reach about $50 billion by 2006.
Ways to Geo-Target
When looking specifically at online advertising, geo-targeting is
typically done in one of four basic ways:
- Advertising on sites that provide localized content. This is
advertising or information that applies to a local or regional
area. Some providers of localized advertising include online
versions of newspapers, television, and radio, as well as city
guides, yellow pages and directories (e.g., Boston.com,
NJ.com).
- Advertising on sites with a registered user base where users
have told the site where they are located (e.g., NY Times, WSJ,
Yahoo). Most sites that provide services such as e-mail or
Internet access require users to register with them. Often the
registration process includes zip code which can sometimes even
be used to target by city or street. However, it should be noted
that not all sites have this level of functionality and can only
target specific zip codes within a DMA or State.
- Using third party ad servers such as Doubleclick. All ad
servers provide some sort of geographic targeting and demographic
selection. Doubleclick uses I.P. address, sending out one ad to
all users in a local area and an alternate ad to all non-local
area users.
- Advertising on sites that provide geographic specific data
such as phone directory and map services. These sites can
typically target by either zip code or area code which is easily
mapped to location since people have had to provide this
information to get the information they need. Examples include
mapquest.com, switchboard.com and weather.com.
Issues to Consider When Planning a Geo-Targeted Campaign
While geo-targeting shows great promise and will continue to
improve with technology enhancements, it is presently not without
some problems. Specifically, some issues with geo-targeting
include:
- Different sites offer differing levels of accuracy with
regard to targeting, with some sites offering no targeting at
all.
- Some sites target by I.P. address, but not all I.P.
addresses reflect the specific geographic location of a user
since the I.P. address may be registered in a different
geographic location -- as is the case with AOL, where all users
are registered in Virginia.
- Other sites can offer zip code targeting with some capable
of taking it to the street level while others can only target
zip codes tied to a specific state or DMA. However, there can
be problems associated with the fact that the zip code is
self-reported, and we must assume the person filling out the
form was telling the truth.
- In addition to zip code targeting, some sites may offer
area code targeting as well. This type of targeting is the
least prominent of the three.
- When the target audience size is small, as is the case when
trying to reach certain key targets in New Mexico and Arizona, it
can be difficult to meet minimum site spend levels. In addition,
if you need estimated inventory availability for a small
town/city, some sites will require a longer lead-time, as well as
a list of specific zip or area codes to be targeted to offer the
estimate. Information on most major cities, on the other hand, is
typically available.
- Geo-targeting can get costly because some sites will charge a
premium for this type of targeting.
- Highly relevant client sites may not offer geo-targeting,
thus eliminating them from a buy when it still might make sense
to include the site. Analysis should be done to determine if it
still makes sense to keep these sites in a buy.
- Keyword media buys are very tricky as each player has
different rules for acceptance of terms.
- Not all search engines have the ability to geo-target.
- Most search engines that serve on a CPM basis will only
accept banner advertising (as a result of an entered search) on
terms that have been deemed to have sufficient searches as
determined by them [the Search Engine].
- Notably, AOL does allow clients to purchase terms with
insufficient searches for a flat fee and no guarantee of
delivered impressions. You are guaranteed 100% share of voice on
those terms.
- When purchasing on a CPC basis, it cannot always be assumed
that you can weed out non-relevant clicks by writing text (in the
search result) that specifically mentions the regions targeted.
Site specs limit the amount of space for an advertiser to
articulate the regions within which the offering is
available.
- Overture will not allow an advertiser to bid on any terms
unless the advertiser has 50% or greater penetration in the U.S.
market (i.e., ability to conduct business in at least 50% of the
U.S. marketplace). This can eliminate small regional players who
do not have the ability to operate outside of a designated region
(e.g., we found this with SBLI).
- However, you can purchase region/local specific terms on
Overture without meeting the above criteria (e.g., Massachusetts
Life Insurance or Boston Hotel)
E-Mail
Third party e-mail lists can typically be bought to target specific
DMA codes. Additional criteria such as zip or area code can be used
when available.
E-Newsletter sponsorships
Typically, these lists are not big enough to justify geo-targeting,
but, alternatively, you may purchase newsletter sponsorship of
regionalized sites (e.g., Boston.com) and registered users of other
large sites (e.g., WSJ.com and NYTimes.com) when warranted.
Wireless
Geo-targeting in the wireless arena can be done at the DMA or zip
code level depending on the provider and target audience requested.
Summary
Whether to employ geo-targeting methods really requires analysis of
several key factors:
- The size of the advertiser — regional players face some
specific challenges when dealing with keyword buys — as well as
the ability to find enough target audience within a site to make
a minimum buy.
- Geo-targeted keyword buys, in general, present issues as each
search player has different capabilities as well as different
pricing models and criteria for acceptance of terms.
- The types of sites specified by the client. Some sites simply
do not provide geo-targeting services, and this needs to be
identified up-front, prior to planning any campaign.
- The level of accuracy differs by site and provider (i.e.,
some can target via zip code or area code, while others use I.P.
address). Obviously, more targeted methods such as zip or area
code targeting are the more desirable options.
- Geo-targeting can get costly as some providers charge a
premium for this service. Thus, ROI analysis should be conducted
prior to conducting any geo-targeted campaign.
* Contributions to this article were also made by: Andrea
Giancontieri, Kerri Vickers, and Lisa Foley
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