GeoMarketing 101: What Is Geotargeting?

Geotargeting: The more relevant an ad or offer is, the more likely it is to drive what marketers want: a sale.

Location data, geotargeting, geofilters. Location-based technology is opening up a world of possibilities for marketers — but it’s also complicated, as new capabilities and use cases seem to emerge every day.

With the goal of breaking down some of the most important “geo” concepts to provide a better understanding of the basics — and a jumping off point for exploring how far the power of location may take us — we introduce the next installment of our GeoMarketing 101 series: understanding geotargeting.

What Is GeoTargeting?

By textbook definition, geotargeting is the practice of delivering content to a user based on his or her geographic location. This can be done on the city or zip code level via IP address or device ID, or on a more granular level through GPS signals, geo-fencing, and more.

Marketers geotarget users on their always-present mobile devices because each person’s location has something to say about their environment and their mindset at a given time — which makes it easier to deliver relevant ad content. The idea is that the more relevant an ad or offer is, the more likely it is to drive what the marketer wants: a sale.

Practical Applications Of GeoTargeting

The central idea behind geotargeting is that understanding a consumers real-time — or past —location helps marketers achieve the holy grail of delivering the “right message at the right time.” In a simple example, an adult customer visiting car dealerships is likely interested in buying a car, and serving a local Honda ad to this customer more likely to be successful.

Serving a Honda ad to someone at (or near) a local car dealership is an example of geotargeting on a hyperlocal level. But it applies on a larger scale, too.

In the print days, taking out an ad in the Detroit Free Press allowed businesses to know that primarily Detroit area residents who could actually visit the business would see the ad in question. Not so in the era of mobile ads which, if delivered indiscriminately and without location context, can be less successful because they aren’t relevant or personal. Ad creative targeted at — and customized for — an Oklahoma consumer versus a New York City one is likely to be more effective in driving a physical sale.

In more sophisticated use cases, geotargeting doesn’t have to be solely based on a consumer’s real-time location. Locations or businesses a customer has visited recently can be a great predictor of interests and intent, so adding targeting based on historical location as well can be key to delivering a captivating, relevant message. Denny’s had great success with this tactic in a campaign with xAd, detailed below.

How are some brands using geotargeting?

In an example of a particularly successful geotargeted mobile ad campaign, Denny’s partnered with location ad platform xAd in 2014.

xAd’s first step was to expand its use of location data. “We wanted to move beyond just the where, and use location data to define the who and the what of audience targeting,” Monica Ho, xAd’s CMO, told GeoMarketing in 2015. After all, while a consumer’s proximity to a Denny’s can be significant, targeting someone who has been to and enjoys their local Denny’s will often prove more successful — whether or not they happen to be near the restaurant at the time they see the ad.

The tactic ended up paying dividends for Denny’s. A targeted “Build Your Own Skillet” mobile ad campaign produced an 11.6 percent lift in in-store visits; a reprisal of the effort for “Build Your Own French Toast” delivered a 34 percent increase.

Geotargeting is a practice frequently deployed by such restaurants and brick-and-mortar businesses looking to drive local foot traffic, but it isn’t exclusively the province of these verticals. Even sports teams have gotten in on the action, targeting fans that are at (or have been to) a particular stadium or event in order to drive ticket sales, app downloads, and more.

“We can take advantage of geotargeting on the devices [of fans] in a particular stadium,” AdSport CEO Gary Knudson told GeoMarketing in 2014.

As brands continue to explore the possibilities of targeting users based on location, both real-time and historical, consumers will likely see more content that is truly relevant to their lives — and marketers can boost sales as a result.