Geotargeting: Definition, Use, & Example

What does geotargeting mean?

With geotargeting, ads or other web content are tailored based on the location of the people you want to reach. This could be, for example, a 50-kilometer radius around a local business, a specific city, or a selection of ZIP codes.

By applying additional filters, the ad can also be tailored regionally, so that different messages are displayed in different areas.

Incidentally, geotargeting has nothing to do with GEO (Generative Engine Optimization), even though the terms sound similar.

Where does geotargeting come from?

The principle is practically as old as advertising itself. Even newspaper ads and local radio spots were targeted at specific areas. Automated geographic targeting emerged with the advent of online marketing, when it became technically possible to determine the locations of devices.

Thanks to IP addresses, GPS data, and Wi-Fi networks, geotargeting has become increasingly accurate, since many people carry their mobile devices in their pockets at all times.

Why is geotargeting important?

Businesses with a limited catchment area don’t need reach beyond their region. A small business that only takes on local jobs gains nothing from clicks from the other side of the world.

Geotargeting helps focus the advertising budget where business can actually be done. This can reduce wasted coverage when location plays a decisive role in the offer. Even small budgets can achieve good results because they aren’t diluted by unnecessarily broad geographic reach.

Advantages

Geotargeting helps reach the target audience that is geographically relevant to the local business.
It reduces wasted coverage because it focuses on the relevant area.
It enables region-specific messaging.
Geotargeting can increase the relevance of an ad, thereby promoting better click-through and inquiry rates.

Challenges

Location determination is not 100% accurate. Technical signals can be imprecise or limited by privacy settings. Additionally, not everyone within a given area actually lives there or is relevant to the business. For some offers, therefore, the current location plays a different role than the home or business address.

An area defined too narrowly excludes potential customers on the outskirts, while an area defined too broadly dilutes the benefit.

Example

A dental practice runs ads to attract new patients. Without geographic targeting, the budget would also be spent on ad impressions in distant cities.

With geotargeting, ad delivery is limited to a 15-kilometer radius around the practice. The same budget now reaches people in the practice’s relevant catchment area significantly more often.