A method of detecting a website visitor’s location to serve location-based content or advertisements.
Every visitor’s computer is tied up with an IP address that indicates its specific location. The first three digits of an IP address corresponds to a country code, while the succeeding digits often refer to specific areas within that domain. This geographical 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 will more likely sell to someone who is located in either of the two cities. If a visitor is in a different city, then a different set of offers may be given.
The system is not 100 percent accurate. Inaccuracies happen when web surfers use proxy servers or some other IP-masking tool, among other methods. However, these instances are rare enough for geo-targeting to still be effective. Geo-targeting is available to even small advertisers via outlets such as Google Adwords.
see also: Digital Marketing Tools
Geo-Targeting: Old School and New School
ClickZ (February 12, 2010)
How to Geo-Target PPC Campaigns for Local
SEO Moz (September 22, 2009)