The Importance of Geotargeting in Digital Marketing

Learn more about the importance of geotargeting, what types there are, and how to implement this lucrative marketing strategy. 

Geotargeting lets businesses use customer location data, such as IP address, GPS data, or location settings, to deliver location-specific ads or content. It allows companies to segment and target audiences based on where they are and show them exactly what they need.

In this article, we’ll explain the practice, its benefits, and key strategies your business can use. We’ll also explain how geotargeting works in an example.

Is Geotargeting the Same as Geofencing?

As an ecommerce business owner, you may have heard about both terms. However, while they both take location as a factor, they are not the same.

Geofencing is a broader strategy, where you define (fence) a certain area, and send ads or content to all customers within the area.

Geotargeting narrows the target audience down by using data on behavior, interests, demographics, and location. This lets you personalize the content or ad and tailor it to a highly specific audience.

Why Geotargeting Matters for Your Ecommerce Business

If you’re not using geotargeting, you may be missing out on profits and more satisfied customers. With marketers around the world using it more and more, geotargeting is expected to grow at a CAGR of 14% between 2023 and 2032, when it’s predicted to reach $303.8 billion globally.

Here’s what it can bring to your business.

Relevance

Geotargeting ensures your content aligns with local interests and needs, serving each target group with what it wants. For example, if you want to sell winter apparel, it can serve ads to demographics in cold regions during winter months. Moreover, you can set the demographic the way you want — such as showing children’s clothing to people whose behavior indicates they may have children.

Cultural Relevance

Different locations have different norms, community events, or customs. If you target a tourist location with skiing enthusiasts during peak tourism months, you can tailor your messaging and offer to suit their needs.

Improved ROI

Although it requires more work to create ads for specific groups in certain areas, it stops you form wasting resources on content or ads that may not be as helpful. This can increase your ROI and conversion rates

Localized Competiton

The practice is especially useful in areas with high competition, as it helps you stand out. Companies specializing in food delivery often target areas with high numbers of office workers, sometimes even providing them with discounts on restaurants they frequently order from.

Types of Geotargeting

The type of data you use to tailor your messaging is also relevant, and it’s used for different business goals. Here’s what you need to know about each:

• Geo-IP targeting – The most popular geotargeting technique, which analyzes the user’s IP address to determine their location, such as country, state, or city.
• Zip code targeting – Targeting people by their postal code or ZIP code helps businesses that want to tailor their messaging to specific neighborhoods or regions. It’s often used by restaurants, real estate agents, or service providers who want to target a local audience.
• GPS targeting – GPS targeting leverages real-time GPS data to pinpoint a user’s exact location. Businesses use it when they want to address audiences in highly specific locations, such as a shopping mall, stadium, or event.
• Behavioral targeting – This technique combines location data with insights into a user’s online activity and preferences. Behavior data includes browsing history, purchase behavior, and interests. This type of geotargeting is helpful if you want to serve ads or content to people based on their interests and hobbies.

Implementing Geotargeting

The practice involves several key strategies, including ads, content, local SEO, location-based offers, and finall, monitoring and adapting your campaign depending on its results. Implementing it should be a part of a larger effort to optimize your digital marketing strategy.

Focus on Specific Locations

Before you start developing ads and content, choose one location to focus on first and save your resources. After that, you can tailor the messaging, offers, and content that aligns with the demographics that you want to include.

This can be one single city where you generally have a solid audience, or even an area where your competition is strong so you can overtake their customers with strong messaging and exclusive offers.

Google Ads and Social Media Platforms

Social media platforms such as Facebook and Instagram and search engines have solid geotargeting options. In each of these platforms, you can specify regions down to the city level. If your ecommerce business is tied to a physical location, you can also create a radius around it and use geotargeting to increase your foot traffic.

Email Campaigns

Email marketing is one of the cheapest forms of marketing. At the same time, it lets you segment your audience and send personalized emails to each segment, which makes it perfect for a geotargeting campaign.

Localized Keywords

Your messaging should contain location-specific keywords, both in your content or ads. For example, if your target city has an ice skating competition, you can create a campaign around skating equipment. Create content on choosing the best equipment, local sports stories, or trends in the sport. An example keyword would be “affordable ice skates Minneapolis.”

Local SEO

Search engine optimization is essential for ecommerce businesses. The marketing strategy ties in perfectly with advertising to create a well-rounded marketing approach.

Local SEO includes optimizing your business by location, whether it’s a single physical location, or multiple locations. It requires you to:

• Claim your Google Business Profile
• Ensure your business is listed in local directories
• Your location is mentioned in meta descriptions, title tags, and headers

It also helps you create content strategies for appearing in local searches, and connecting with local businesses, bloggers, and influencers. For this reason, many businesses choose local companies that know their market and niche well. For example, if you do operate in the Twin Cities, a Minnesota SEO company will have more experience with the local market and the specifics of each city.

Location-Based Offers

Location-based offers are an excellent way to connect to audiences in different parts of the country (or world, if your business ships globally). Let’s take the example we’ve been using so far (it is the winter season, after all).

The winter gear retailer can create the following set of offers:

• Exclusive discounts in Wisconsin or North Dakota during peak snowfall periods
• Free shipping within Minnesota to incentivize local buyers
• Region-specific bundles, such as thermal gloves paired with snow boots for Midwestern customers

The retailer can create localized ads on Google or social media and target demographics within colder regions. The ad campaign can be paired with localized, seasonal content (e.g., Top 5 Winter Hiking Essentials for Minnesota Weather) to drive organic traffic and rank even higher in these locations.

Monitor and Adjust Campaigns

No campaign is over until you have the numbers in. In geotargeting campaigns, businesses often focus on:

• Click-through rates (CTR) – The percentage of users who clicked on your ad or link after seeing it. A high CTR indicates relevance and strong ad performance.
• Conversion rates – The percentage of users who completed a desired action, such as making a purchase or signing up for a newsletter.
• Cost per acquisition – The cost of acquiring a new customer (it can help the campaign remain within budget).
• Return on ad spend (ROAS) – Revenue generated for every dollar spent on advertising. A high ROAS signals effective targeting and messaging.
• Bounce rate – How many visitors leave your website after viewing only one page. Clearly, you want this to be low.
• Average session duration – The time users spend on your site. Longer sessions typically indicate high-quality, relevant content and a positive user experience.

Common Pitfalls to Avoid

This strategy has several benefits. It can increase your ROI, position you as a trustworthy business, and save your resources. However, businesses sometimes make mistakes that don’t let them see all the perks of geotargeting.

Overgeneralizing Locations

Spending more resources on general, wide areas is not the best use for this strategy. You can use geofencing if you really just want to target a certain area. Instead, focus on hyper-local strategies, define a target audience narrowly, and practice in one area first.

Ignoring Cultural Differences

Missing the mark globally or nationally can have unpleasant consequences, from wasted resources to bad PR. However, even if the differences within your region are less pronounced, this doesn’t mean you can neglect culture.

For example, if you’re marketing to a Minnesota city, highlight Midwestern values such as durability and practicality in your messaging. Also, pay attention to local events or news to set the tone.

Neglecting Mobile Optimization

Mobile optimization is non-negotiable, regardless of which marketing strategy you use. In geotargeting, it’s essential because many local searches happen on mobile. What you can do to optimize for mobile is using responsive design, ensuring fast page load speeds, and simplify design and navigation for smaller touch screens.