The 90s was the decade of “global.” Earlier generations of the internet promised a seamless transfer of global information. Real-time video technology like Skype reduced travel costs for companies. Social networks reunited friends living at opposite corners of the globe.

In these first decades of the 21st century, emphasis is now on local. Communities both champion the benefits of local produce. Conscientious consumers support local business owners through the shop local movement. Google even prioritizes search results according to the browser’s location. The bottom line is that everything, from technical architecture to cultural superstructure, is tending towards what’s local. And that includes online display advertising.

Online display is a well-established form of advertising.  But during the last decade ad space was sold “run of the network,” so it was mainly used by national advertisers trying to reach mass audiences.  Local businesses could not participate in this online revolution because there was no affordable model scaled to local business needs. A new technology known as geo targeting has changed this.

The mechanics of geo targeting are simple. The technology affiliates a user’s IP address to a database containing information matching IP address to zip code. When a website is downloaded from the Internet, the available advertising space containing a geo-specified IP address is sent to the Real-Time Bidding (RTB) Exchange. There, advertisers who have specified certain zip codes in their inventory orders bid for ad placement on the page.

The applications of geo targeting are manifold, but the most exciting is local business advertising. Progress Partners reported in 2011 that local business display advertising spend will rise at a compounded annual growth rate (CAGR) of 66% between 2009 and 2013, topping off at a $565 million market.

 

US Geo-targeted Display Ad Market

Progress Partners (c) 2011

Geo targeting enables local businesses to concentrate their ad spend on a strategic geographical area around their business location. Such concentration raises online display ROI because it increases accuracy of a campaign because ads are seen by the right people. Geo targeting allows local businesses to purchases fewer impressions to reach their frequency goals for a chosen audience: without it, only a small portion of the ads would show up in front of the right people living near the business. In short, geo targeting makes online display advertising possible and profitable for the small business marketspace.

Vantage Local devotes 100% of its time and energy to perfecting geo targeted online display campaigns. It’s our mission and our passion to know how this works. To learn more about how geo targeting can improve your local business advertising strategy, call us at 1-855-77-LOCAL (1-855-775-6225).