Apr 7, 2021 3 min read

How does geotargeting in digital advertising work?

How does geotargeting in digital advertising work?

Geotargeting is one of the most widely used targeting options used by digital advertisers. Advertisers employ geotargeting to tailor their message to a specific population of the world — and the ability to target a user by their location is a table-stakes feature that any ad platform must offer.

What is geotargeting?

Geotargeting is a set of coordinated processes ad platforms use to control which digital advertisements a user will see based on the current location of that user in the world. Advertisers can geotarget based on a user's country, state, city, or zip code.

How does geotargeting work?

Digital advertising platforms use signals sent to them directly in an ad request or derived from an HTTP request to determine a user's location. These signals include IP address or latitude/longitude (lat/lon for short).

Publishers can pass these signals as query string parameters in an ad request or an ORTB bid request field. Check out the examples below:

ORTB example

"device": {
	"ua": "Mozilla/5.0 (iPhone; CPU iPhone OS 6_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A334 Safari/7534.48.3",
	"ip": "123.345.857.142",
	"ifa": "00000000000000000000000000000000",
	"geo": {
		"lat": 30.267153, "lon": -97.743057,                            

VAST video ad request example


Ad platforms work with specialized geolocation vendors like MaxMind or Digital Element to derive a user's location based on signals sent in an ad request. These geolocation vendors offer services to map IP addresses or lat / lon to an actual physical location.

Typically this can take the form of either a real-time API or an offline database that a platform can host itself. Due to the extreme low-latency demands of running real-time programmatic auctions, most ad tech platforms opt to host the database since it is the more performant option.

How is location determined based on IP address?

Just like 3rd party data brokers who convert IP addresses or device IDs into targetable behavioral segments, geolocation vendors tap into a variety of sources to convert an IP address into an actual location.

One of the baseline sources could include the five Regional Internet Registries responsible for distributing and allocating IP addresses in their region of the world. For example, the American Registry for Internet Numbers offers public whois services.

Geolocation vendors can also buy access to other data sources like apps or websites that collect exact location and IP address together. For example, an eCommerce site could have the right to sell your IP and physical address bundled together to third parties looking to build robust geolocation datasets.

Once a geolocation vendor can tie an IP address to a physical location, they populate their databases with relevant values that digital ad platforms can leverage to perform geotargeting.

How is location determined based on Latitude and Longitude?

Gathering a user's precise latitude and longitude typically originates from a mobile app since our phones have GPS built into the device. If the user grants an app permission to access their location, that app can determine location down to a few feet.

Latitude and longitude refer to the specific geo-coordinates of the user on the planet. An example of these coordinates could be:

Latitude: 30.267153

Longitude: -97.743057

If you type those coordinates in Google Maps (30.267153, -97.743057) it will resolve to Austin, Texas. Much like IP addresses, geolocation vendors can accept these coordinates and turn them into useable values relevant to digital advertising.

Geotargeting on digital advertising platforms

A platform will present all of the available geotargeting values in their platform's UI, typically alongside all other targeting options for a line item or campaign.

"Country" is probably the most commonly targeted value, but it is not out of the ordinary for advertisers to target large lists of hundreds of zip codes.

Once an advertiser places a set of geotargeting values on a campaign, it is up to the platform to make the magic happen. The platform will

  1. Receive an ad request
  2. Inspect the IP address or lat / lon
  3. Query their geolocation vendor's database
  4. Receive a set of geo values (country, zip, etc.)
  5. Determine the eligible set of campaigns based on their geotargeting options

The platform will find matching campaigns if any of the values resolved based on the IP address or Lat / Lon match the values targeted.

Geotargeting has been a minimum viable feature required for any ad platform for years. Even though the above process is simple enough to understand, it requires coordination between three separate companies — geolocation vendor, publisher, and ad platform — to deliver the correct ad to the user, based on their location in the world.

Photo by Louis Reed on Unsplash

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