Retargeting vs. IP Targeting

There are several ways to target consumers online in order to deliver online targeted advertising, but the two methods this article aims to compare are retargeting and IP targeting.

With the various methods of consumer targeting available when it comes to online advertising, it can be tough to determine which one would deliver better conversion rates. Two of the accepted and highly regarded forms of targeted advertising on the World Wide Web today are retargeting and IP targeting. Comparing the pros and cons of each targeting method will give you an idea of which one might better be able to help you reach your online advertising goals

How Retargeting Works

A small piece of unobtrusive code is placed on your website so that every time you get a new visitor, the code will tag their browser with a cookie. The cookie will then anonymously follow your audience wherever they go on the World Wide Web.

Advantages of Retargeting

  • You can entice previous visitors to return to your website. If the visitor purchased something, you can encourage them to visit again by showing other items that are related to the ones they previously bought. If the visitor left your website without completing the purchase, you can keep your brand on top of mind with retargeting ads.
  • With the help of Google Analytics, you will be able to track how many returning visitors you have, as well as gauge their loyalty and track their behavior.
  • Because you are tracking your visitors’ behavior, you will be able to customize your retargeting ads to suit their interests.

Disadvantages of Retargeting

  • There are Internet users who feel like retargeting is obtrusive and an invasion of privacy. Some people could become annoyed at seeing your ads all the time and think you are stalking them online.
  • You don’t have much control over where your ads are displayed since there is no opt-out option, which means your ads can show up on unrelated pages.
  • Having your ads shown too much can potentially turn consumers off.

How IP Targeting Works

IP targeting, which falls under geotargeting, is the process of determining the geographical location of a website user and delivering specific content or advertisement based on his or her location. Simply put, companies that provide geolocation services utilize various methods, such as pings, traceroutes and reverse DNS lookup to triangulate the location of an Internet user. This data is then used to serve relevant content and online advertisement based on their IP address.

Advantages of IP Targeting

  • IP targeting helps you become locally relevant, and this is highly important in many cases and for many industries. Local businesses such as restaurants that have few locations can benefit from localized, targeted ads. However, this is not to say that large enterprises and those with multiple locations won’t benefit from IP targeting. You can launch online ads with unique messages and place them in front of a specific audience at a specific place.
  • Since IP targeting can help you ensure that your online ads get the exposure that you need from the right people and in the right places, this also means that you can restrict visibility of your ads. You can get as granular as you want with IP targeting and exclude areas that won’t convert, resulting in wasted ad spending and increased ROI.
  • In the same vein, you can keep your competitors from seeing your ads in order to keep your competitive edge, with the help of geotargeting and IP exclusion. You can prevent people located in your competitors’ office or shops from seeing your ads by identifying their IP address.

Disadvantages of IP Targeting

  • There are consumers who might feel like tracking their IP addresses is also an invasion of privacy.
  • Depending on the geolocation service provider you use, the IP targeting accuracy may be questionable.
  • Businesses with multiple locations that are situated closely together may find that IP targeting can cause these locations to compete with each other due to overlapping targeted areas. In this case, it would make sense to segment by product or service rather than location, if possible, in order to keep the CPC lower.