Geo-Targeting is a method of detecting a website visitor’s location to serve location-based content or advertisements.
Every computer is tied to an IP address that indicates its specific location. The first three digits of an IP address corresponds to a country code, while the succeeding digits often refer to specific areas within that domain. This geographical information, when used for marketing purposes, is called geo-targeting.
Geo-targeting aims to improve the cost-effectiveness of marketing programs. For example, if the product is a plane ticket from Honolulu to Vancouver, then it will more likely sell to someone who is located in either of the two cities. If a visitor is in a different city, then a different set of offers may be given.
The system is not 100 percent accurate. Inaccuracies happen when web surfers use proxy servers or some other IP-masking tool, among other methods. However, these instances are rare enough for geo-targeting to still be effective. Geo-targeting is available to even small advertisers via outlets such as Google Adwords.
Practical application: geo-targeting is critical for professional service firms– dentists, doctors, attorneys, and the like. Some folks are more local than others– for example, the local dry cleaner is not going to attract people from 3 states away (much less, across town) while an east coast realtor may attract folks who are searching from California for real estate. A Las Vegas hotel may attract booking nationwide, as would a world-famous restaurant.