GEOIP-Based Segmentation for Targeted Marketing

Segmentation is a very important element in marketing and personalization. A focused message related directly to an individual is received better and is more likely to convert. One avenue of segmentation is geographic location (or GEOIP-based segmentation).

What can you tell about someone based just on their address? Marketers reach audiences with relevant messages when targeted segmentation strategies focus on certain demographics. Geographic information is just one segmentation. Let’s break down geographic location and other important segments to use in personalization.

Ways to Segment…and Why

Marketers use many different strategies to gain an in-depth understanding of their customers and prospects, but traditional segmenting tactics generally tend to focus on four traits:

• Geography: Where are they? Data for urban vs. rural address, climate and market size traits.
• Demographics: Who are they? Includes factors such as income, age, ethnic background and gender.
• Psychographics: What do they want and why do they want it? This looks at segmenting based on motives, personality and lifestyles.
• Benefits Sought: What are they looking for? This focuses on past purchases, page visits, downloads and other interactions.
• Usage Behaviors: When are they active? This focuses on engagement time frames, page visits, social and email view/open times and other usage interactions.

Customers traits are collected to craft personas of prospects. This data is also used to create segments of prospects for the purpose of targeting them more effectively. Additionally, geodemographic segmentation (the study and grouping of the people in a geographical area according to socioeconomic criteria or other defining traits) has become a way to deepen the understanding of who they are and what they want by closely studying where they reside.

Geodemographic segmentation concepts:

1. People who live in the same geographic area will often share similar characteristics as opposed to two people chosen from a much wider region. These similarities include comparable elements like backgrounds and preferences as well as earning power, since the cost of buying or renting in most jurisdictions is usually similar.
2. Neighborhoods are categorized by the resident’s similarities. Geographic regions boasting similar types of people are added to the same segment, even though they are separated by physical distances. GEOIP tracking is a quick and easy way to gather data and apply it to marketing segmentation.

Marketers know “like attracts like”. Neighborhoods, area codes, and addresses are used to pinpoint a customer’s location and to find potential like-minded buyers in the same region. With advances in databases, GEOIP tracking and marketing automation platforms, marketers have obtained a powerful strategic advantage regarding understanding prospects.

Leveraging GEOIP-Based Segmentation

The sheer mass of data available to marketers can pose a challenge, so where do you start? Which traits are the most important and meaningful? Is there a way to determine which areas and neighborhoods you should try to target? With the right professional system in place, any file, list or survey extract this information. With this data:

• Learn about the prospects you are targeting and customize offers, messages and products specifically to their behaviors and interests.
• Discover where current customers and prospects reside and locate additional individuals like them, across the nation.
• Group similar target segments together and engage them with like-minded messaging, guaranteeing greater conversion rates in your campaigns.

What’s more, GEOIP segmentation is applicable to email campaigns and dynamic content on landing pages or input forms. Why use a generic cityscape as a background image, when you could display the prospects own city? The goal is relevancy to your target audience. The more prospects feel ‘this offer applies to me’ the more likely they are to engage.

Are you using GEOIP-based segmentation and personalization to target your audience?

Written by Eric Murphy

Eric Murphy is the Digital Marketing Manager at ActiveDEMAND. He is responsible for driving the marketing strategy for the ActiveDEMAND integrated marketing platform. He has a strong background in online marketing, communications and working closely with sales teams. For many years Eric was an evangelist and marketer for the industrial communications community through guest articles, maintaining industry blogs and speaking at conferences and other events.