Geotargeting Delivers for Local Business

For all we hear about the global reach of the Internet,
people need to know what's happening where they live. For
most people, 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.

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.

COMMON GEOTARGETING METHODS

- I.P. Address

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