What is Geotargeting?
Geo-targeting is the process of tailoring your advertising campaigns online so that potential customers in different physical locations see different ads.
Geo-targeting also recognises that customers in different locations are, on average, worth different amounts of money to advertisers and so within pay per click advertising systems like AdWords, advertisers can set different bid prices for different locations so that traffic costs reflect the underlying profitability.
As an example, if you are selling expensive vacations, you will get a higher conversion rate if you advertise in areas where the population is wealthy and so you might be prepared to pay $5 a click in Manhattan and only $1 a click in Idaho.
Effective exploitation of geo-targeting can give you a very significant competitive advantage.
Hyper Local Advertising
A new development in Geotargeting is Hyper Local Advertising in which advertisers target customers who are very nearby. A classic example would be a cafe or restaurant targeting people who are accessing the internet via mobile devices in the immediate vicinity.