IP targeting is gaining traction, again. Not because marketers are catching on, but because new technology is breathing life into a (fairly) old tactic.
IP targeting has been around since the early days of ad serving. It’s not very hard to write code that will strip the IP address from a request, compare it to a database, and deliver an ad accordingly. The true difficulty, as we shall see, is building and maintaining an IP database.
One of the first applications of information in an IP database was targeting to specific geographic regions. Most commercial ad management systems have IP databases that can make geographic targeting possible. However, there are a couple weaknesses in this method. The first (and biggest) problem is that, for various reasons, not all IPs can be mapped to an accurate location.
Other ISPs and networks may use a method known as dynamic IP allocation for its users. In other words, a user might have a different IP address every time he visits the Internet (which can be a problem for remarketing ads). You can see how this might affect the accuracy of a database.
But times they are a-changin’. The credit card industry has spawned technology that’s mapped IP addresses to people. Think of it this way, a specific IP is associated with a single family house (or an apartment, office, etc). John Doe and family have a history of online purchases. Over time, it falls into a norm. When Mr. Doe suddenly has an online order from his IP for some heavy machinery parts, three blue-ray DVD players and a case of disposable cell phones, well, he may just get a call from the credit card in mention to make sure everything is in order and he is, in fact, binge purchasing.
Companies have made this data available for marketing purposes. Imagine, if you will, that instead of using killer digital advertising services, you’ve been stuck using crappy traditional methods like direct mail, with the same un-inspiring returns (honestly, a 1% contact rate from direct mail is good most of the time). Now, you can take that direct mail list, run it through the wash, and send display ads to the IP addresses associated with the physical addresses to anywhere from 40% to 80% of them. Here’s the best part…ads aren’t restricted to Google Display. There’s tons of exchanges that use this (including, unfortunately, mobile app ads, which we talked about previously). Still, imaging pelting John Doe with display ads across a 5 day period, or sending him one piece of direct mail that Mrs. Doe may toss in the trash before he ever sees. Which would you choose?
If you’re interested in learning more about cutting edge digital marketing tactics like this, give us a call or drop us a line today.