What’s the story on IP Targeting?
Should Advertisers use IP Targeting?
HOW DOES IP TARGETING WORK?
IP Targeting display advertising over simplified: looking at the online behavior of a particular IP address, defining the probable location of that IP address (preferably a home), matching that IP address and other hyperlocal IP addresses with a 3rd party database of personal information including name, address, phone number, email addresses, residential print subscriptions, direct mail, etc. in order to make more defined and relevant digital advertisements.
We’re going to begin this article by giving you a job. You’re probably thinking, “oh great…” Actually it’s an easy one and it applies directly to this article:
- Pull up the web browser on your phone and go to google.com. Then type in the phrase “what is my IP address”. After you hit the submit button, Google will tell you what your public IP Address is, along with listing other sites that do the same. Write that number down and close the browser window. We’ll come back to this exercise later!
Since IP Targeting is an industry term that primarily refers to a specific type of display advertising, we’ll stick to specifics. How exactly does it work vs. typical CPM or CPC display campaigns? If other products can target a user by gender, age, interests, behaviors, location, previous searches- how exactly is IP Targeting better?
There is one term that both defines and explains IP targeting- probabilistic. In other words “highly likely”. As in, highly likely that the information is correct, but leaving a little wiggle room!
Every electronic device has an IP address if it is connected to a network. This group includes phones, tablets, computers, printers, routers, etc. IP Targeting is presented as a very accurate way to track users and match their behaviors across multiple platforms and locations, by tracking their unique IP address specifically. Excellent concept, right?
Except for the wiggle room….192.168.0.1. We can literally feel the sneers that Network Administrators all over the country are now giving us. Why? Because 192.168.0.1 is the default IP address for a significant majority of wireless routers sitting in American homes and businesses today. In fact, that IP address has been the standard for those devices for many years.
We are not saying that 192.168.0.1 is an IP address that is part of IP Targeting campaign inventory. In fact, if all IP addresses for all consumer devices were completely unique, yet as consistent and resilient as 192.168.0.1 has been over the years, IP Targeting would be a perfect product. But alas, it is not a perfect product, and an advertiser needs to be aware of potential issues before making it significant part of an advertising campaign.
IP Targeting is not new technology. As we established earlier in the article, IP addresses have been around for awhile- since the 1980’s in fact. When the technology is presented as something new and different in the advertising industry, take a step back. IP targeting really took off around 2012- with politicians. They asked themselves, “What if we could take our database of supporters and match it with an IP address? We could exponentially increase the success of targeted digital campaigns!” And the rest is history.
Dynamic (changing) IP addresses complicate things. Remember that exercise that we conducted earlier? Here’s the 2nd part of it. Restart your phone and/or put it into airplane mode. After your phone restarts and it is back on the network, pull up Google again and type in “what is my ip address”. Is the number the same? If so, you are a prime candidate for advertisers! If the number has changed, your cell provider assigns a new IP address every time you connect to the internet- sometimes the same one used before, sometimes different. If that number changed, to an advertiser, you just became a completely different person!
Routers complicate things. Have you ever been to a busy coffee shop and noticed all of the people around you on their phones, tablets or computers? If they are getting their internet through the coffee shop wi-fi, they are all using the same primary ip address- the one that the router uses to connect to the internet. When they leave that coffee shop and reconnect to another wireless device, their IP address changes yet again.
IP Targeting has a manual component. The value of IP Targeting is that the advertiser has the ability to track a user across multiple platforms (phone, computer, etc), based on behaviors that took place online with that IP address. However, if the IP address changes, what then? The simple answer is that the database full of targeted IP addresses needs to be updated. The question is, how complicated can that be? Very. If the database is not updated in a timely manner, the data is bad and the advertiser pays for that problem. If it is a new IP address, the behavior has not yet been developed so there is no accurate way to target that consumer, and the advertiser pays the price.
What about privacy? Is a cookie placed in a user’s browser less intrusive than their IP address being used for targeting? It depends. Do typical display advertisers have your name, address, phone number email address, etc. in a database that they are using to target you more effectively online? No. Are they purchasing that personal data from a 3rd party or selling/giving it to another 3rd party? No. Are they able to tell anything about you other than your behavior on the internet on that particular device, leading them to have a better understanding of what your interests are? No.
Traditional display advertising and IP targeting have similar results. An advertiser can send out a direct mail piece and get 2 responses and then send another one out and get 4 responses. The possible differences? Timing, new creative, different audience, higher volume of recipients, etc. Never assume that there is any one variable that leads to a change in performance in a campaign. Unless you are performing a split test between two identical audiences, using separate tracking mechanisms in both campaigns, and keeping everything else identical except for the creative, you have no definitive way to measure contributing results. Once you move beyond that controlled environment, it becomes increasingly more difficult to assign successes to a minor change in any advertising campaign. Any time an advertiser gets a better grasp of the target audience, and makes changes to the messaging to capitalize on that knowledge, the results are going to increase.
You should do IP targeting. Wait, what?! IP targeting is a valuable asset to any comprehensive digital campaign. The technology and data behind IP targeting is very sound, and a unique way to enhance an advertiser’s messaging. Even though digital advertising is incredibly accurate, nothing is perfect. The opportunity cost is exposed when you see how much you are spending on something vs. the results you are getting. Should you consider a split test between an IP targeting campaign and a targeted display or mobile campaign? Yes. Should it be the primary focus of your overall advertising budget? No.
Successful advertising campaigns are only based on 2 things- the right audience and the right message. Without those two assets working in tandem, the results coming from any print, digital or any other medium will be less than satisfactory. Contact your digital professional in Louisville, KY or Greenville, SC for more information!