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What is geotargeting and how does it work?

Have you ever been in the middle of watching a stream or a YouTube video and been interrupted by a strangely specific advertisement? The advertisement is for the new fast-food joint that opened up 2 streets away from your abode — it’s offering exclusive deals to those who live within a 5-minute walking distance. It looks like you’ve been caught in the geotargeting advertising net.

Charles Whitmore

Charles Whitmore

Aug 19, 2021 · 3 min read

What is geotargeting and how does it work?

How does geotargeting work?

Geotargeting is a form of advertising that focuses on specific geographical locations. The method was born from advertisers wanting to extend their reach to the almost 5-billion mobile phone users.

This newer form of ad-tech will show content specific to a user’s physical location. A lot of geotargeting requires the user to opt in to location-based services. For example, opting to share your phone’s GPS location with a food delivery service. Once you opt in, you’ll probably be bombarded with a selection of deals and offers only available to those within a 1 to 5-mile radius.

Geotargeting vs Geofencing

There are 2 forms of targeted advertising. Geotargeting marketing focuses on user demographics, behavior, and habits. It’s typically used for larger consumer bases as it’s easier to implement specific keywords. Google implements this kind of advertising regularly.

The second form is known as geofencing. This is for slightly smaller consumer bases and essentially draws a virtual IP barrier around a geographical location. This kind of advertisement is saved for places like sports arenas or student-heavy zones. Geofencing ads will show up on most devices, further enticing users to pay attention to the deals on offer.

For businesses that depend on deliveries or rely heavily on enticing shoppers into their store, geofencing is an invaluable tool. Advertisers can choose the exact areas for specific adverts to target — if they extend too far with their geotargeting net, they’ll reach users that will have no use for whatever is advertised.

Is geotargeting effective?

A Google 2019 report found that user searches for “where to buy (product) near me” have increased by 200%, and more than half of those searches result in a consumer visiting the shop. Geotargeting ads are essential to keep some smaller businesses afloat.

By targeting smaller demographics of consumers, it’s easier to build a good relationship with them. A more personalized advertising approach has shown to be incredibly effective — digital marketing experts MarTech Series revealed that businesses showed an 83% increase in successful ad campaigns when using geotargeted ads.

Geotargeting examples

One of the most notorious (and cheeky) examples of an incredibly effective geotargeting marketing campaign was in 2018, revolving around fast-food giants Burger King and McDonald’s. If someone were to enter a McDonald’s establishment and order a Whopper from the Burger King app, it would only charge the consumer a single penny. This tongue-in-cheek marketing strategy showed the world just what geotargeted ads were capable of.

Once again focusing on another fast-food establishment, Dominos has been using geofencing ads fairly regularly and effectively. By virtue of being a pizza delivery service, they already have access to users' addresses and phone numbers. Dominos can then focus on different circumstances to push deals. “The big game is on tonight? Grab the football bundle! Has the weather taken a turn for the worse? Stay in and order Dominos!”

What if I don’t want to be targeted by location ads?

It’s completely understandable if you’re uncomfortable receiving these kinds of advertisements. If you’ve opted out of all location-based targeting and are still on the receiving end of geotargeting ads, make sure you double-check all your app sharing permissions.

Do I need a VPN to prevent geotargeting ads? It certainly helps a lot. By using a VPN, you can replace your IP with a remote server’s, thus stopping IP tracking.

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