Poindexter Systems Uses Digital Envoy IP Data to Refine Geotargeting Capabilities
- by Kate Kaye , April 12, 2004
"There's so much data available. If you don't know what to target, it's not meaningful," says Poindexter COO Ted Shergalis. By marrying aggregated user data with specific campaign variables, Poindexter is now able "to take that broad Digital Envoy data and turn it into clusters that make [the] information usable," Shergalis explains.
Digital Envoy captures user data--including city, state, postal code, area code, Internet Service Provider (ISP), time zone, type of Internet connection, language, and user domain--by spidering the Web. The firm's clients, in various markets such as advertising, digital media, software, and security, can query the system's database to determine information such as how fast a particular user's connection speed is. "We only know generic information--nothing like street address or email address," insists Sanjay Parekh, chief strategy officer at Digital Envoy. The company last month announced an agreement to supply its IP-based data to ad management firm DoubleClick to enhance its ad-targeting capabilities.
Poindexter chose to work with Digital Envoy after vetting a number of other data providers. Poindexter's POE technology segments audience clusters based on demographics, transactions, and user patterns. Advertising creative and media are optimized for each cluster by considering geography, time of day, demographics, frequency, and other data. Advertisers like Mercedes-Benz, for example, have employed the technology to serve different groups of users different ads. By coupling POE data with Digital Envoy data, Poindexter aims to help advertisers better define user response-based ad models.
Interactive agency Semaphore Partners has used the combined data for Continental Airlines since March to target high-value travelers in three main hub markets--New York, Cleveland, and Houston. "It's critical to Continental's business that we're able to geotarget to their three hub markets," emphasizes Erin Matts, media supervisor at Semaphore Partners. The difference between the new and old system, she adds, is that now it can map demographic and psychographic data to geographic data like zip codes in order to refine targeting.
In addition, a credit card company has used POE/Digital Envoy information to segment students who connect through .edu domains and serve offers featuring student rates. An ISP has used the integrated data to determine user connection speed in order to promote broadband services to dial-up users and to isolate at-work users who connect through large company IP addresses, to serve them ads for residential high-speed services.
"Advertisers have been sold a bill of goods--that they could do geotargeting with registration and cookies," says Poindexter's Shergalis. The problem with registration data, he contends, is that it's often incorrect. For instance, privacy-minded users or jokesters might register on sites using phony zip codes such as 12345 or 90210, which means targeting by zip code doesn't always guarantee that an advertiser is reaching the intended audience.
Geotargeting based on IP information isn't all it's cracked up to be at this stage either, suggests Michael Kline, cofounder of local advertising agency ReachLocal.com. "IP targeting isn't as accurate as it needs to be," comments Kline. He points to America Online users whose actual physical locations cannot be isolated based on IP address because of the way AOL handles Web requests. He also mentions that some users' computers do not connect to the Internet within, say, a 20 to 30 mile radius of their actual location. Inventory is another concern, since targeting by zip code does not ensure that advertisers will reach a sufficient number of users. "Inventory management needs to be more sophisticated," Kline concludes.
In order to geotarget through search engines, many local advertisers, particularly those that traditionally use classified advertising such as attorneys and real estate agents, have gravitated toward buying search engine keyword terms that include names of towns, cities, and the like.
According to Shergalis, Poindexter's partnership with Digital Envoy will "create a greater curvature in the media yield curve" that will enable advertiser clients to target more relevant ads to users. "People are willing to deal with advertising because it's part of the ecosystem," he asserts. "But there is a value exchange; people will accept advertising if advertisers put relevant offers in front of them."
