IP Geolocation Explained: How It Works for Advertisers

Written on
Feb 13, 2012 
Mike Blacker  |

ADOTAS - For more than a decade, the use of IP geolocation data has driven many critical functions in the online world such as content delivery, language, search results, advertising, fraud detection, compliance and a host of other services. The use of Internet Protocol (IP) data is widespread in the industry, but certainly not widely understood.

Location is the most important signal on the internet beyond search keywords, as the majority of household spend is within a few miles of the home. Determining a user’s location seems like a pretty basic function, but the fundamental infrastructure of the internet is not built to easily perform this task. Worldwide networks are built to identify when a device is plugged into the network, but not necessarily where the device is located. As a result, early publishers and search engines did not know where a user was located. In the mid 1990s, several companies began using the IP address as a proxy for user location and began to aggregate, analyze and provide IP geolocation data to the marketplace for various uses.

An IP address is a numerical label assigned to devices participating in a computer network. There are approximately 3.5 billion routable IP addresses worldwide. Various registries around the world provide public access to basic IP data, but do not specify or guarantee the accuracy or security of those IP address allocations. IP geolocation data is generally accurate to the metro area or approximately 25- to 50-mile radius in the United States and Europe. The accuracy varies greatly depending on the processes of
the IP data provider, the country and network type.

The most basic form of IP geolocation data is simply scraping the public registries, aggregating the data and selling it to the marketplace. This method is acceptable for non-critical functions like content delivery or marketing, but without further refinement, the data are oftentimes unreliable for more precise needs like security, fraud detection and compliance.

To more accurately decipher the use and allocation of IP addresses around the world, some IP geolocation companies have developed their own proprietary technology. These sophisticated platforms analyze the publicly available IP data but also provide additional computer learning and human touch to drive higher accuracy for critical processes like fraud detection, regulatory compliance, security and, increasingly, marketing campaigns. With limited geographic accuracy, many companies are working to
further refine IP data and drill down to the neighborhood or ZIP plus four level of accuracy.

Geolocation is not the only benefit of IP data. There are many other parameters associated with an IP address that can be very useful for marketers, security, analytics and much more. An IP address provides a useful window into the technographics of the carrier in which the IP address is associated, the connection speed, the connection type, domain, registering organization and more. All of these data points are useful and valuable in various ways, depending on the use case and need.

IP data is privacy safe. An IP address provides a window into certain aspects of a user connection, but does not ever allow for the identification of an individual user or their behavioral patterns. Unlike a cookie, the IP data does not store user information, but simply provides generic data attributes related to that connection.

IP geolocation is an essential tool for online advertisers to ensure that only the most relevant ads are served to consumers, and that the correct currency and language are relevant to a user when a website is accessed. It allows marketers to think locally and personalize content, advertisements, local news or local search results in a scalable and measurable way.

As consumers continue to increase their time spent online, CMOs are shifting their marketing budgets from traditional display and print media to online advertising. In fact, a recent eMarketer study found that in just the U.S. alone, online advertising will increase to $49.5 billion by 2015, as a result of new platforms and opportunities for growth. With these new online advertising channels, it’s becoming even more critical to create brand loyalty and further consumer engagement. As IP data providers continue to refine the accuracy of IP geolocation data, advertisers will be able to more effectively target at the local or neighborhood level and precisely target by desired demographics.

Mike Blacker is the vice president of advertising sales and business development for Neustar’s IP Intelligence online advertising solutions.

Mike has over 15 years of experience in online advertising including ad sales, business development, software sales, behavioral targeting and hyperlocal solutions. Most recently, as vice president of advertising solutions at Feeva, Mike lead ad side business development for Feeva’s hyperlocal platform. Prior to that Mike, was director of business development at AudienceScience where he lead the sales and implementation of ASI’s BT solutions across publishers like Time Inc., Scripps Networks, Turner Broadcasting, News Corp, NYT Digital and many others domestically and internationally. As the sole business development person at RSI, Mike was also the catch-all for any business inquiries, competitive insights and the elusive data landscape.

Mike began his online career at J. Walter Thompson as a media planner, developing the first online campaigns for Sprint and Sun Microsystems. Seeing that salespeople have more fun, Mike jumped into ad sales for Infoseek in 1996 and later opened the first West Coast office for CBS SportsLine. After being bit by the start-up bug, Mike helped build College411 (acquired by Student Advantage in 1999), Epylon Corp (Acquired by Accenture in 2000), Expertcity (Acquired by Citrix in 2003) and Rincon Technology before landing at Revenue Science.

Mike received his B.A. in History and Environmental Studies at the University of California, Santa Barbara. When Mike isn’t out flying around the country talking to customers, he enjoys downtime with his wife and two small boys in their hometown of Ojai, California. He can often be found building something in his woodshop, recording music or gardening. Mike is also a self-certified boat freak.

Reader Comments.

Great article Mike, It’s amazing how much information people can gather from a single IP address. I heard it’s usually 97% accurate in most cases. Mobile Cell Browsing is a little less accurate, I notice my GeoIP Location changes dramatically depending on where I’m at with my mobile phone.

Once you know Longitude and Latitude, type in your IP Below at.


You can derive Area Code, Metro Code, Zip Codes, etc. Which makes it so effective.

Posted by Matt Struggle | 11:38 am on February 21, 2012.

Leave a Comment

Add a comment

No Tags
Article Sponsor

More Features