So, how does IP targeting work? And what makes it different from other online ad targeting methods? Here’s a quick primer on how IP targeting technology works, and how you can use it to boost your advertising conversion rate.
What is IP Targeting?
Whenever a device connects to the internet, it’s assigned a unique internet protocol (IP) address. These addresses are assigned based on location and internet carrier. As a result, they’re easily identifiable. If I know your IP address, for example, it’s relatively easy to use that information to find your home address.
IP targeting takes advantage of this feature to target individual people or businesses. By matching IP addresses to individual street addresses, an advertiser can deliver ads with pinpoint precision. This allows you to advertise only to the people you want to reach, without wasting precious ad dollars advertising to people who aren’t potential customers.
Unlike cookies, IP addresses cannot be deleted, and they cannot be blocked. As a result, you can use IP targeting to reach customers who block cookies and other trackers. If you want to go crazy, you can even create multiple versions of an ad. This way, you could deliver one version of an ad to residential households and another version to businesses.
What Kind of Advertisers Use IP Address Targeting?
Just about any advertiser can use IP targeting. That said, here are a few examples of IP targeting companies, as well as other organizations that might see a benefit.
Car dealers and mechanics generally have a list of existing customers. Along with this list, they typically have a record of what type of maintenance or repairs these customers have received. Suppose you want to advertise an oil change promotion? By using IP targeting, you could deliver ads specifically to customers who had their last oil change more than three months ago.
Modern political campaigns rely heavily on lists of donors and party members. Imagine a local election, where there’s a controversial road or sewer project under consideration. Rather than advertise to everybody in your congressional district, you could advertise directly to people who live next to the controversial project. You can even dial in further and advertise only to those people who are party members or donors.
Similarly, college advertising needs to be highly targeted. High school students typically have a time window of about a year to consider colleges. As a result, mass advertising will result in a lot of ads getting sent to people who are too old, too young, or don’t even have children. By delivering ads to students who just took their SAT or ACT, a university can achieve significantly higher conversion rates.
Banks and credit unions can also see improved conversion rates. For example, suppose you’re offering a new auto loan program. You could target specific customers who have just finished paying off their auto loans. This way, you’re advertising directly to the people who are most likely to be in the market for a new car.
What are the Advantages of IP Marketing?
So, what makes IP marketing superior to other targeting techniques? Here are just a couple of factors.
To begin with, it’s not creepy. Studies have shown that customers are turned off when a company seems to know too much about them. Consider the famous case of the teenage girl who received a Target mailer for maternity goods. Her father went to the local store and yelled at the manager. As it turns out, his daughter really was pregnant, and Target had noted that she was buying prenatal vitamins. This incident caused Target to reconsider its ad targeting policies.
It’s also the most precise method possible. Yes, there are other methods of targeting consumers, such as geo-fencing and geo-targeting. These methods are certainly effective for targeting a specific ZIP code. But location is just one factor that marketers need to consider. If you know your customers, IP targeting allows you to zero in on specific people. As a result, there’s no more precise way to deliver your ads to your target audience.