Why is IP Targeting Important?

If you’ve been following the online advertising industry at all over the past year, you’re well familiar with the looming threat of the death of the 3rd party cookie, or ‘cookiepocalypse’. Google’s coming deprecation of the ability to use 3rd party cookies for advertising purposes has thrown a challenge before the entire adtech industry.

The 3rd party cookie ecosystem thrived for its unmatched ability to segregate audiences online. Offline data such as credit scores or demographic information has been ‘onboarded’ into advertising audiences and made easy to buy and use for the purposes of targeting display advertising.

Assuming that Google follows through , online advertisers will have to develop alternative means of targeting audiences. 

One option that’s actually been around for quite some time, but that doesn’t get a lot of attention is IP targeting.

To understand IP Targeting, first you need to understand a bit about IP addresses in general.

The entire internet runs on IP addresses (IP standing for Internet Protocol). When you key a domain address into your browser, the browser goes to a giant lookup table (DNS or Domain Name Servers) and pulls an IP address that directs its attention to the right server and website files. 

Every device connected to the internet has its own IP address, including the modems and routers that connect a home or business network to the broader internet. When you visit a website, the ‘handshake’ involved in passing information back and forth includes the connecting device passing its IP address along. This means that sites that serve advertising have the ability to ‘see’ the IP address of visiting devices, including the modem that interfaces between devices on a network and the internet at large. 

When you obtain internet service at your home or business, your internet service provider assigns an IP address to your modem. You can tell what yours is by typing ‘what is my IP’ into the search box. The network IP address that is returned is the one that’s been assigned to the network that you’re on. There’s a bit of a nuance here, as for home internet service, an internet service provider may provide a ‘dynamic’ IP address or a ‘static’ IP address. As the names imply, if you have a dynamic IP address your address may change periodically. If you have a static IP address, it’s locked into one number. 

Since sites that sell advertising can ‘see’ that IP address, this provides a means to target your local network, whether it be a home, or a business, with advertising. This is called IP Targeting.

What is IP Targeting?

IP targeting is a way to connect offline data to advertising targeting, in a way like cookies have been used but a bit more anonymous. There are data providers who connect physical addresses to IP addresses. That is, “1123 Street Name, City, State, Zip is equal to IP 11.123.11.123.”

By obtaining the targeting data that you want, be it demographics, political affiliation or other meaningful targeting attribute, and connecting this to physical addresses, then passing this through an IP address vendor, you can now target advertising at houses and businesses that map to these attributes.

IP targeting does not provide quite the pinpoint accuracy of cookie targeting, that is, it’s less of a 1 to 1 relationship between data and a  targeted device. However, it does provide advantages. One advantage is that by targeting a household using a network IP address, you have the ability to reach ALL of the devices connected to that network. Advertising via connected TV (CTV) is accelerating as more and more consumers ‘cut the cord’ and move to streaming services, the ability to dynamically insert ads into programming is increasing. 

IP Targeting lets you:

Replace cookie ‘onboarding’ of 3rd party to targetable cookies with ‘onboarding’ 3rd party data, to a mailing address, then to a targetable IP address. This lets you map a wide variety of offline data to online advertising. 

Target specific geographies including individual home or business networks, streets, neighborhoods or zip codes. This makes it ideal for local service providers, political campaigns, franchises and other advertisers where location matters.

Run display ads, radio ads and streaming TV ads in concert at the household level, creating brand saturation with tightly targeted audiences.

Coordinate your digital advertising with your physical advertising, by integrating direct mail, phone campaigns and OOH (out of home advertising such as billboards) with your online advertising. 

While there is progress being made with alternatives to the 3rd party cookie, such as UID (Universal ID), advertisers can move forward with exploring IP targeting as a way to bridge the gap, or as the right solution for reaching the right audiences in it’s own right.