As marketers push further and further for personalized marketing, they have turned to location-based marketing such as geotargeting as a tool.
What Does Geotargeting Mean?
Geotargeting is when you target a specific group of people based on their location.
Marketers use this to ensure that ads only reach people in a defined location.
It is an ideal way to narrow down the people who see your advertising, ideally creating a better return on investment (ROI) for your advertising.
How Geotargeting Marketing Works
So, how does geotargeting marketing work?
Let’s say you have a business based in Salt Lake City, Utah. You want to attract more visitors to your brick-and-mortar store.
So, you create a Facebook Ad that only the people who live within a 20-mile radius of your storefront will see. Facebook, makes sure that your ad only appears on these people’s feeds.
That’s geotargeting in marketing.
Is Geotargeting Legal?
Yes, it is legal.
Small businesses usually use it through a service like Google Ads, Facebook Ads, or another social media app. All of these have terms of service agreements that outline their geotargeting policies.
By using these social media apps and sites and agreeing to the terms of service, people have also agreed to geotargeting.
Is Geotargeting Expensive?
One of the biggest benefits is that you get to determine your ad spend.
When you post on Google Ads, Facebook Ads, etc., the company will ask you what your advertising budget is and how many people you want to reach. You will define the type of people you want to reach, i.e., people who live within 20 miles of your business, and Google or Facebook will make sure a portion of those people see your advertisements based on the amount you’ve allotted to spend.
In terms of return on investment (ROI), that will depend on your competition. If there are a dozen businesses similar to yours in your neighborhood, you might be competing with each other for those ad impressions. That’s going to drive up the price per impression.
Conversely, if you’re the only business in your city that provides a particular service or product, your competition will not be as great, and the cost per impression will most likely be lower.
Is Geotargeting Effective?
It can be extremely effective, especially if people are looking for services or products located in their neighborhood.
Through geotargeting, marketers are using proximity as an advantage over the competition.
It not only drives foot traffic but also online traffic. Think about how often you’ve searched for a service through something like Google and then chosen the service that appears closest to you and at the top of your search results.
While it can be effective, some pitfalls come with the marketing practice.
First, it is possible for your marketing to become too segmented. If your geotargeting is too segmented, it can end up competing against itself for ad impressions, thus driving up the price per impression for both of your ad campaigns.
Take extra care in making sure that your ad campaigns do not compete with one another for ad impressions.
Another problem is if you become too specific, you’ll pay a lot of money per impression.
Despite the negatives, geotargeting can be a handy tool, especially for location-based businesses.
Through geotargeting, businesses can appear at the top of search results, above the competition, making the return on investment much more likely.
Want to learn more? Check out our next post on Geofencing.
Written by Erika Towne