Intelligent IP: Revolutionary Ad Targeting For Locally-Minded Marketers

In my last column, I analyzed the limitations of cookie-based behavioral targeting for locally-focused advertisers. As demonstrated in that study, contextual targeting strategies — in a series of well-documented tests — eclipsed behavioral targeting in performance and brand safety.

However, as digital advertisers are aware, not every contextual targeting strategy is scalable at the local level; such a strategy can be limited by the availability of real-time contextual inventory. As cookie-based behavioral targeting becomes increasingly compromised and contextual targeting encounters scalability restrictions, local marketers are left with incomplete targeting techniques that can preserve reach to relevant audiences and are scalable.

Intelligent IP

Vantage Local posits that the next targeting frontier for locally-minded advertisers is cookie-less multivariate IP targeting, or Intelligent IP. Specifically, Intelligent IP is a superior form of targeting for campaigns with strict geographic targeting parameters for the following reasons.

• Target Audience Identification: Unlike behavioral, contextual or managed placement campaigns, Intelligent IP campaigns identify the probabilistic IP range of an advertiser’s target audience, as determined through big data techniques that match online and offline proprietary and public data sets.
• Shift in Reporting Focus: By targeting audiences at their IP address, local advertisers can be increasingly confident that they are reaching their target audience and are no longer reliant on click rates alone as the primary measure of campaign success. Instead, advertisers can shift focus to the total engagement rate, as such a metric would reveal the interest of both their clicking and non-clicking target audiences.

Target Audience Identification

Despite the ease with which one can highlight the inadequacy of cookie-based behavioral targeting in campaigns with strict geographic targeting parameters, by no means are all data-based solutions for locally-minded advertisers inadequate. Quite the contrary, Vantage Local has adopted as standard for local advertisers the use of Intelligent IP – offline audience data modeling and subsequent identification of known IP addresses with look-alike attributes within a highly targeted area.

The offline creation of an audience model from either an advertiser’s existing client database or the analysis of other offline data to determine hundreds of common demographic and socio-economic attributes is at the core of this revolutionary targeting strategy. As geo-location technology companies and audience targeting solution providers improve the accuracy with which specific IP ranges may be targeted and reached, advertisers can be increasingly confident that their message will be delivered to their intended online audience.

Shift In Reporting Focus

In addition to improving the accuracy with which advertisers can reach their target audience – down to the IP range – Intelligent IP targeting has a secondary, but equally powerful, impact on local display in that it moves the discussion surrounding campaign success away from clicks and toward total engagements.

In Display Ad Clickers Are Not Your Customers, Quantcast CEO Konrad Feldman makes an indisputable point that by optimizing for clicks, advertisers are all too often optimizing away from their primary target audience. Not only does Mr. Feldman call into question click optimization, but he also indirectly exposes a significant issue with how local display advertising agencies currently provide click-centric reporting to advertisers, thereby leaving the advertiser with no choice but to judge their overall campaign performance based on a flawed metric.

If local display agencies use click through rates (CTR) as the primary reporting metric, there is a clear temptation for advertisers to see it as a measure of effectiveness. Such click-centric reporting – in conjunction with limited reporting transparency – has created an environment rife with fraud.

Unfortunately, the desire for transparency is not shared by all in this space, and we all too often hear of competing agencies whose reporting continues to consist of impressions, clicks, and CTR. Without transparency, advertisers run the risk that:

• Their clicks may be on fraudulent sites/exchanges with heavy bot activity; or
• Their agency may be optimizing towards the wrong audience.

In addition to click reporting and publisher transparency, it is vital that the engagement rate also be considered, as the advertiser’s target audience may not necessarily be one that is prone to click on ads. The inclusion of engagement rates captures the interest of not only your clicking audience, but also those weary of display ads.  However – advertisers beware – you should confirm that your engagements are measured by unique, multiple hover overs and not just single hover-overs, as this can over-represent the number of people that legitimately engaged your ad.

Conclusion

The idea of a “local campaign” is an afterthought for most digital display companies. What you see is a lot of agencies attempting to retrofit their existing platform – which is designed to service larger clients – to accommodate the local segment of the market, but it just doesn’t work. Despite the marketing spin many digital agencies try to put on their product, there remains a fundamental disconnect between the requirements of locally-minded advertisers and what is available today.

Cookie-less multivariate IP range targeting, or Intelligent IP, not only resolves locally-minded advertisers’ issues associated with the compromised nature of cookie-based behavioral targeting, but also steers the discussion of reporting away from clicks and toward total engagements.

Per above, click reporting has been all-too-often used to cover-up click rates that have been inflated by fraudulent publishers and networks. By reaching your target audience as defined by offline analysis or a model based on customers that have already converted, advertisers can be more confident that they are reaching the right target audience, regardless of whether they are clickers or not.