Geotargeting: What Is It and How Does It Work?

by The MNTN Team

9 Min Read

As a business owner, you’d no doubt like to connect with more relevant audiences and improve your return on ad spend (ROAS). Enter geotargeting — your secret weapon in the fight for consumer attention and engagement.

That said, what is geotargeting, exactly? How does it work? And most importantly, what benefits can it provide for your business? Let’s discuss!

What Is Geotargeting?

Geotargeting is a location-based marketing strategy that uses a person’s geographical location to deliver personalized ads or other forms of content that are relevant based on where they are. The tactic obtains user locations via GPS signals, cellular data, and / or IP addresses.

Geotargeting vs. Geofencing

Geotargeting and geofencing might sound pretty similar. While both approaches use location data to deliver ads to specific audiences, that’s where the similarities end.

Geotargeting focuses on serving ads to people based on their location, be it where they work or live — it meets the consumer where they are. Geotargeting can also range from broad areas, like regions, counties, and cities, down to specific targets, like a single ZIP code.

By contrast, geofencing involves waiting for consumers to come to you. You draw a digital barrier around a location, and when someone crosses that barrier, it triggers an action, such as a push notification from your branded mobile app. With geofencing, consumers initiate actions with their behavior, specifically where they travel.

How Does Geotargeting Work?

As mentioned above, geotargeting uses data from a user’s device, such as their IP address, GPS, or Wi-Fi signals, to determine their location. That information then informs what content or ads the user is shown.

For instance, let’s say that you want to grab a cup of coffee on your lunch break. Naturally, you’ll break out your smartphone and start searching for coffee shops in the area. One particular shop nearby uses geotargeting to connect with users within their ZIP code. Because you’re within that ZIP code and actively looking for the product they sell, you check all of the advertiser’s boxes, meaning you’ll see one of their ads.

Types of Geotargeting

There are multiple ways businesses can use geotargeting, such as:

Region or City-Level Geotargeting

Businesses often want to advertise to users in specific regions, states, or cities — this is one of the most basic types of geotargeting. A local plumber, for instance, could run a county-wide ad campaign to earn new business, or they could focus on a specific city to capture more market share and outperform a competitor.

ZIP Code Geotargeting

Sometimes, businesses want to connect with smaller, more specific segments of a wider community, and that’s where ZIP code geotargeting comes in handy. As the name implies, businesses can select a ZIP code (or several) and only deliver content to people within that area.

Radius or Proximity Geotargeting

You can think of radius or proximity geotargeting as a happy medium between ZIP code and regional advertising. Businesses pick a radius and target everyone within that circular area, which may include segments from multiple ZIP codes or even portions of more than one city.

Benefits of Geotargeting for Marketers

Geotargeting unlocks all sorts of exciting benefits for your business, including the following:

Enhanced Relevance

No one wants to see ads for services and products that simply aren’t available to them, so you must work to make your ads more relevant to your audience through geotargeting. Putting content in front of individuals in your service area ensures that every piece will be relevant and timely to them.

Improved Ad Performance

Location-based targeting tends to result in better ad performance, as the content is relevant to the user’s immediate needs. For example, if you sell beachwear and the summer season is around the corner, you could target people who live within 25 miles of beaches. They are most likely to make a purchase, meaning you have a much better chance of enjoying a better ROAS.

Targeted Local Promotions

Running localized promotions helps drive in-store traffic. Say that you are running a flash sale this weekend, for instance, and you want to maximize foot traffic. You can run a geotargeted ad campaign, targeting customers within a three-mile radius of your store. Since those shoppers are already close by, they are more likely to stop in to take advantage of some last-minute deals.

Increased Engagement

Personalized and location-relevant ads are more likely to capture attention, increasing the likelihood of user interaction. You’ll be reaching people more likely to convert since the ads will be more relevant to them. In other words, location targeting often generates higher engagement than other, less focused targeting methods.

Better Understanding of Customer Behavior

Responses to your ads will vary across different regions and communities, but if you’re running blanket ads, it will be difficult to pick up on such differences. Through geotargeting, you’ll gain a better understanding of customer preferences, allowing you to make future ads more impactful.

Common Applications for Geotargeting

You can leverage geotargeting for any of the following purposes:

Localized Advertising

Create ads that resonate with local cultures, languages, and needs. For instance, consider adapting your messaging to highlight local culture or landmarks. That sort of approach would make your brand feel more familiar and personable.

Location-Based Promotions

Offer special promotions or discounts to users within a specific geographic area to drive foot traffic or online sales. If one of your stores is underperforming, you could ramp up ad spend in that area to remedy the issue.

Proximity Marketing

Engage potential customers who are physically near your business with targeted messages when they get within a certain distance of your store. The goal is to encourage instant action through timely, relevant ads.

Event Targeting

Promote in-store events to users based on their proximity to another event’s location or customer interest in similar events, like concerts, festivals, conferences, and sporting events.

Geo-Conquesting

Target users who are at or near a competitor’s location with attractive offers to entice them to visit your business instead. It’s an aggressive strategy that can be especially effective in competitive markets.

Say you run a plumbing business in the greater San Diego area, and a competitor is dominating the east side of the city. You could launch a targeted ad campaign focusing on those ZIP codes to win over business and strengthen your market share.

Best Practices for Geotargeting

Geotargeting works, but only when it’s conducted properly. You can’t just select a few ZIP codes and start running ads; there are a few things you’ll need to do first:

Define Your Objectives

You won’t know if your campaign is successful unless you establish some clear and measurable goals first. Your goals may include things such as:

Getting more people to come to your events (how many more?)
Drawing more customers to your new store (how many more?)
Increasing brand awareness in certain areas
Boosting sales in specific places (by how much?)

Get your team involved in goal-setting. You can even make a game of it and work together to achieve big things for your business.

Understand Your Target Audience

Next, you must figure out who it is you want to reach. Keep your targeting simple but not too narrow. Start with basics like customer age, gender, location, marital status, and earnings. From there, get a bit more detailed and think about what they may like to do for fun; doing so helps you know where to run your ads.

Respect User Privacy

Privacy concerns are paramount in today’s digital landscape, so you must ensure your practices comply with federal, state, and local regulations. Be honest about your data collection, retention, and sharing practices, and give users a chance to opt out; being transparent will strengthen trust in your brand.

Create Compelling and Relevant Content

Just because you’re targeting people close to your business or service area doesn’t mean you can slack on the content quality. You still need to present your audience with exciting creative that’s educational, informative, fun, and / or funny.

Optimize Timing and Frequency

Timing your ads matters, too. If you run a coffee shop, for instance, it wouldn’t make much sense to run ads in the middle of the night. Apply the same basic concept to your industry and the behavior of your customer base.

Frequency is another big factor to consider. No one wants to see the same ad every single time they open an app or turn on their TV, but at the same time, most people won’t act after seeing just one ad.

It’s all about balance; you need to get your brand in front of customers enough for them to remember you, but not so often that you annoy them.

How Accurate Is Geotargeting?

Given its ability to target specific ZIP codes, cities, regions, or radiuses, geotargeting is one of the most accurate advertising strategies out there.

When you compare Connected TV geotargeting to traditional television advertising, the race isn’t even close.

With old-school linear TV ads and cable TV ads, marketers often had to target an entire designated market area (DMA). There are 210 predefined DMAs that have split up the entire United States, usually determined by designating distinct urban areas and their combined suburbs. If 25% of the area included their ideal audience, that was too bad; they had to pay for the entire DMA.

Fortunately, geotargeting makes that sort of wasteful ad spending a distant memory. You can dial in your ads to reach people who are most likely to interact with your brand or make a purchase. Social media platforms, CTV platforms, and web-based digital marketing tools all allow for such a high level of precision.

Location-Based Marketing With Performance TV

With all of the above in mind, you’re likely ready to add location-based marketing to your advertising mix!

With MNTN Performance TV, you’re in control of your campaigns — and that includes targeting specific regions or ZIP codes. One of our most popular functions is radius targeting, which lets you choose a custom radius to target around a specific area.

That’s not all — MNTN Performance TV also includes robust analytics tools to help you get the most out of your CTV ad campaigns. Our network of vetted creatives can provide compelling content to make your brand stand out. Most importantly, we have premium CTV inventory that includes ad slots on the nation’s most popular streaming platforms.

Geotargeting: Final Thoughts

When you want to grow your brand and connect with local audiences, geotargeting through streaming TV advertising is the ideal solution. Take the guesswork out of digital marketing and let location-based advertising drive your business forward.