Known Problems with IP Targeting

What Is IP Targeting?

Wel,l let’s start off with the basics. According to the Interactive Advertising Bureau (IAB), IP targeting is delivered to a user’s geographic location as determined by his or her Internet Protocol (IP) address. So every computer connected to the Internet has an IP address associated with it. Pretty cool and quite a lot of laptop and desktop screens to show advertisements!

It’s no wonder that IP-targeted advertisements are quickly on the rise and are here to stay! Imagine having the ability to place your ad in front of millions of households reaching an audience within the comforts of their home. For a fraction of the costs of radio, print or TV advertisements, IP targeting is the more cost-effective approach.

IP Targeting Is An Attractive Form of Engagement

The strategy to target households, Starbucks, airports, buildings is an attractive one, no doubt. Compared to other forms of advertising it’s innovative, and a fresh approach to marketing. It is cheaper compared to other forms of mobile audience targeting, but I’ll get into the pros and cons in just one second.

For marketers, IP Targeting is a tool that is here to stay. In some cases, we are only looking to engage with a captive audience who is attending a trade show or conference. IP Target is a good way to deliver a timely and relevant message. In other cases, just adopting an IP-Target strategy may costs you more money in the long run.

When we recommend solutions for our partners at SA Interactive, IP Targeting is one of the last strategies we will recommend. Over the years when new members join our team, we will explain to them the deficiencies with IP Target to help them understand the pros and cons. I decided to turn this internal document into this blog post. Now I fully expect to get flamed by those who love IP Targeting – so be it. For us, our partners prefer a more laser-targeted solution that we offer.

Known Problems with IP Targeting

For those marketers smart enough to do your homework about IP Targeting, when you go to Google and search for known problems you get some decent results. There is really not a one-stop resource to cover all the issues so I have done years of research and built this following list.

First one is a big one – the numbers in IP addresses have no correlation with a specific geographical location. The computer’s location cannot be determined by IP address alone. For that you need to team up with an IP intelligence firm that matches IP addresses to a physical location. Even with the help of a third party data provider you need to question the accuracy of their targeting.

Then there are the added costs of having your advertiser outsourcing this work to an IP intelligence firm. Believe me, you will be paying for these additional costs whether you know it or not. The cheaper something costs the cheaper something is. There are also are limitations to the quality of data relative to advertiser intent.

Accuracy Can Be A Challenge

The second problem relates to reaching actual people versus their IP addresses. The inconsistency between the location of an IP address and a consumer’s physical location cuts at the precision and accuracy of IP Targeting. There are several factors that contribute to this difference. Some IP addresses change physical locations each month. Since the IP address is a static number and not based on a phone number with a geographical area code assigned, the location of the IP address can be virtually anywhere.

As a marketer, if you want to serve advertisements to employees who work for a specific organization, you need to keep in mind that some organizations have multiple locations around the country and the world. If your servers are registered to a Louisville, KY location and you want to target Humana, serving content relevant to Louisville, KY where Humana is headquartered presently is a great strategy for brands like Maker’s Mark or the Kentucky Derby. If the organization you are trying to engage with is headquartered in Los Angeles and you are working for that company in Louisville, then getting advertisement for the L.A. Lakers won’t make much sense yet sometimes that is the case when adopting an IP Targeting strategy. Sometimes you are targeting a centrally located server.

If you are not too concerned with local relevant ads then IP Targeting is the way to go. The same goes with proxy servers, where some ISP’s use a small number of servers on a server farm like AOL does. Sometimes AOL customers may see content for business in northern Virginia where AOL is headquartered. See, I’m not completely bashing IP Targeting here…..

Advertisements based on location or for local events perform poorly with IP Targeting. The more granular the Direct Marketing Area (DMA) the less reliable IP Targeting can be. You can still deliver your messages but is the right message reaching the right audience?

Right Message for the Right Audience?

Do you even know if your message is reaching the right audience? Let me explain with the following personal example. Lately I have been receiving political advertisements from GOP candidates running for office in Kentucky at my home where I am connected to our IP Address on our Wifi. When I am scrolling through Facebook from time to time, I will see these ads. I just shake my head because everyone who knows of my past work experience, knows that if I am definitely the wrong demographic for GOP served advertisements.

Second, I live in Indiana just across the river from Louisville and the Indiana/Kentucky border. When I see these ads I think to myself, man they just wasted their money trying to engage with me. Now you could make the argument that I might know someone living in Kentucky and can convince them to vote Republican but that’s a real stretch. Those offering an IP Solution might have matched the previous owner of our home who IS a Republican and therefore included our IP Address in their advertisement campaign.

Even if adults who are registered Republicans are living in a household in Kentucky, how do you know that they are even logging on to their computer, laptop or mobile device while in that physical household location? When I get these Republican ads on my personal Facebook page, I just shake my head. Imagine how hard it must have been or a political campaign to raise that money in the first place only to later discover they served ads to Democratic voters living in Indiana. They would be furious, yet it happens all the time because the inaccuracy that IP Targeting presents.

There is a Better Way

If you are willing to invest more into your mobile marketing efforts then a data-driven marketing strategy is the way to go. When we consult with prospect who later become partners, in some cases they have been using a IP vendor and they have been underwhelmed. They had been promised huge results yet they don’t see many new leads.

There are some really good IP Targeting vendors out there, but we hear too many horror stories and that is why we recommend IP Targeting as a last resort. Our approach is different. We match online and offline consumer profile records with their mobile devices so we can serve native advertisements on their mobile devices. Everyone seems handcuffed to they’re mobile devices like me and we are seeing much better Return on Investment (ROI).

When you match mobile devices to consumers it opens up the door to match their media consumption habits, buying behaviors, their passions, and their affiliations. You can target more precisely and on the platforms you know they spend the most time on like their mobile versus desktops and Facebook versus Candy Crush.

I encourage you to investigate a targeted audience on mobile strategy. If you like I am more than happy to share more information with you. Recently, I wrote an eBook making the case for Mobile Audience Targeting. You can download it here and read it on your own if you like!

Known Problems with IP Targeting