Kate Owen, European MD at Digital Element, talks to Figaro Digital about IP geo-location technology and explains what it can offer marketers
A user’s purchasing history, ‘likes’ and stated preferences all have a role to play in creating more personalised, relevant content. But just as important – and sometimes more so – as what we’ve done in the past is where we are right now.
IP geo-location technology makes it possible to establish the physical location and connection attributes of visitors to your website based, naturally enough, on their IP address. This lets publishers, ecommerce sites, ad networks and others serve content tailored to users’ locations at the moment when it’s most relevant. And, at a time when we’re all anxious about what are perceived as invasive data-collection techniques such as cookies, IP geo-location honours individual anonymity, because the information it provides is non-personally identifiable.
Digital Element have been working in this field since 1999, providing clients with the tools to create closer and more relevant relationships with users based on where they’re connecting to the net. So what exactly is IP geo-location technology, how does it work and what can it help companies achieve?
“An IP address is a little bit like a telephone number,” says Kate Owen, European MD at Digital Element, “with one main difference, as we’ll see. If you think of a phone number connecting to a telephone network, well, an IP address does exactly the same. The difference is that the number’s not unique to you as an individual; the number depends on where you’re accessing the internet from. There are then methods of identifying where that particular IP address is connecting physically to internet. And if you know that, you can do an awful lot of things with the data.”
For Digital Element, she explains, this technology dates back to the late 1990s when it was formulated by the company’s founder Rob Friedman and his team. “Before that there was a registry of IP addresses called Whois, and all you could do to find out where an IP address was possibly located was to go into the Whois database for your region and see to which company, or to which country, the ISP had allocated that block of addresses. Now, that’s not an enormously sophisticated, complete or accurate way of finding out where somebody actually is. What Rob and the others realised back then was that there were a lot of commercial applications that could benefit from knowing where the user is at any given time. If you know where someone is logging into the internet, you can implement all sorts of personalisation. But because we’re only talking about logging on to the internet – it’s not device specific and it’s not person specific – it’s completely anonymous, private data. It’s also almost instantaneous, which means it’s a very significant building block.”
With the EU’s Cookie Directive in place from May 2012, this is clearly an important issue. So how exactly does this technology avoid the pitfalls associated with cookies?
“The main and very obvious difference is that an IP address is not traceable to a person or a device. It’s where you’re connecting to the publically routable internet. Think of somebody’s home office – I’ve got my laptop here, my iPhone, my iPad. Each of those devices has their own personalised IP address but they aren’t public. When I go online I’m connecting to a node somewhere near me. It’s not in my house, it’s not on my street necessarily, but it’s somewhere close by and there are a lot of different people using that node. That’s where the internet becomes public, and an IP address can then indicate that this person is located in, say, Kingston Upon Thames. The geographical pinpointing can be very accurate, but it isn’t specific to me. It’s tracking the node up the road. And that’s an important distinction. We’re not interested in users’ identity at all. What we’re interested in is where this particular connection took place. An ecommerce site may have a profile and registration data and information on things I’ve bought before. But if you want to provide me with useful information based on where I am right now, you don’t need to know who I am. You can just say, okay, this person’s in Hamburg. Let’s give her some relevant content to that location.”
So, knowing where your users are at the precise moment they choose to engage is clearly valuable information. But how exactly are company’s using it?
“There are five main applications,” says Owen. “The first and most obvious is geographically targeted advertising. Maybe you have different types of products depending on where the user is, or you’ve got a product that’s only relevant in certain areas. IP geo-location technology enables you to be much more clever and efficient. Firstly, you need fewer impressions to reach the right people. Secondly, for the publishers and people who actually own the content, they can sell those impressions at a much higher CPM. And for users, of course, the ads are much more relevant so you’ve got better click rates and better conversion.”
The second great benefit, says Owen, is in the field of analytics. “For example, I might sell more sun screen in places that get less sunshine because people are more keen to travel. Sometimes these things can be counter-intuitive. But that’s very useful information, and if I know that I can adjust my campaign accordingly.”
The third benefit revolves around content. If you’re a ‘New York Times’ reader living in Europe, the international edition may be more relevant to you. IP geo-location technology means you’ll be served that content automatically. “That’s good customer service,” says Owen. “It’s going to help user retention, and off the back of that there’s more advertising. You don’t have to pull down a menu and indicate where you are. Any type of content – local news, ads, weather, restaurants, offers – this can all be served automatically and in real time.”
The same principle applies in ecommerce. “Let’s say you’re a clothes retailer and you’ve got shops around the country. You can make sure that products featured on your homepage match the user’s location, and you can highlight what’s featured in each individual shop. Retailers who want to get users off the sofa and into their bricks and mortar shops can do that by local offers, deals and so on. The technology is now precise enough to identify down to 100 households, so if you’re a pure online retailer you can take into account things like the weather, availability and delivery times and prices. And of course that information is also very useful for me as a user.”
Many of us now, as users, demonstrate conflicting impulses: on the one hand we expect companies to tailor their content to suit out interests exactly. On the other, we’re anxious about surrendering personal data. Could this sort of technology provide a way to negotiate these issues? Owen believes it does.
“I think we’ve all had the experience of an advertisement for sofas or gardening tools following us around on the internet for months,” says Owen, “based on something we didn’t quite buy. A cookie will remember what a user did in the past, but it won’t tell you where they are now, or show you things relevant to the current location. In conjunction with other technologies, and with clever strategic thinking, the information provided by this technology can be really vital.”
Article by Jon Fortgang