What Is Geo-Targeting And How Can It Help Your Business?

The effectiveness of just about any advertising campaign can be improved markedly if messages, notifications or offers are shown only to people within a specific geographic location. As a result, geo-targeting advertising solutions for social media are all the rage right now, since they offer brands an easy way to adapt their ads for a specific local or regional presence. They are more cost-effective, resulting in a higher ROI per advertising campaign.

The rationale behind geo-targeting

Here’s one way to think about geo-targeting: if you operate a small, family-run restaurant in a town, you wouldn’t take out a national advertising campaign, right? The only people who would run a national campaign are those companies – like quick-service restaurants and fast-food outlets – that have a truly national footprint. Until the Internet came along, the only way to geo-target your audience was by running ads on billboards in a certain area, buying local radio ads, or taking out ads in the local newspaper.

With the Internet, geo-targeting efforts primarily centered around knowing the IP address of your computer. Remember the days when e-commerce retailers would ask your location, so that they could show you the right webpage for your country? Now, the process is basically automatic. If you live in the U.S. and try to use a UK e-commerce retail site, for example, a message will pop up, asking you if you’d like your purchase priced in dollars.

Mobile and the geo-targeting use case

And the different types of geo-targeting today are getting more and more sophisticated, mostly due to the ubiquitous use of smartphones. According to TheWordPoint, “advertisers have a precise way of knowing your exact location in real-time, so they can display ads or notifications that are designed to trigger certain behaviors.”

For example, let’s say that you are shopping in a mall during the weekend. You obviously have a lot of different choices about where to go, right? If you’re thinking about buying a new summer swimsuit, you might decide to head to a major department store. Or, you could just as easily head to a chain store like Gap or Banana Republic. Or, quite possibly, you might head to an upscale boutique to get something very unique.

That’s where geo-targeting comes in. An advertiser can essentially decide to only show mobile ads to users who are within 1 mile of their store. If they decide to geo-target a local mall, for example, they would only show mobile ads to shoppers near the point-of-purchase. This could have huge implications. A shopper intent on heading to Macy’s, for example, might be tempted to head to a local boutique if the offer is good enough.

Facebook and geo-targeting

The good news is that social media platforms such as Facebook now enable a form of geo-targeting, letting advertisers drill down on a specific geographic location. Facebook ads, then, would only be shown to a very small subset of users – those users who are near the point-of-purchase. And you could just as easily geo-target Facebook posts, only displaying them to certain groups of followers.  All of that has the impact of giving the power back to the advertiser.