What is geo-targeting?
A method of detecting the location of a website visitor in order to deliver location-based content or advertising. Each visitor's computer is associated with an IP address that indicates their specific location. The first three digits of an IP address correspond to a country code, while the following digits often refer to specific areas within this domain. This geographic information, when used for marketing purposes, is called geo-targeting.
Geo-targeting aims to improve the cost-effectiveness of marketing programs. For example, if the product is a plane ticket from Honolulu to Vancouver then it is more likely to sell to someone who is in either city. If a visitor is in a different city, a different set of offers may be given.
The system is not 100 percent accurate. Inaccuracies occur when web surfers use proxy servers or another IP masking tool, among other things. However, these instances are rare enough for geo-targeting to continue to be effective. Geo-targeting is also available to small advertisers through outlets like Google Adwords.