Geomarketing is the use of geographic information in the planning and implementation of marketing strategies. This type of marketing creates maps based on set geographical specifications to analyze customer behavior. Advertising companies may utilize this information at every level of the marketing mix to then target their advertising campaigns in such a way as to appeal to consumers based on where they may shop or live.
The marketing mix identifies the four key elements that advertising companies typically use to design marketing campaigns: product, price, promotion, and place. Product first identifies what items or services will be sold. Price determines what monetary value will be placed upon the goods or services for sale based upon the cost of manufacturing them versus the economic climate in which they may be sold. Promotion identifies which selling tactics and advertising devices will be used to present the goods and services, and place decides in which areas these tactics and devices will be applied.
Using a geomarketing approach, advertisers may use the marketing mix more effectively by offering products to specific audiences that would be highly receptive to them. Advertisers may use geographical data to determine whether a product would be well received in particular geographic areas, and what price range would allow that product to sell well before testing the product on the market. This strategy also helps advertisers determine which geographic areas would be more receptive to certain products than other areas, and allows them to choose the best promotional campaign possible to advertise to those areas.
Television commercials are an example of geomarketing in use. Advertisers choose shows during which to purchase ad time based on how well a television show’s target audience aligns with their product target audience. For example, soap operas, most frequently aired during the daytime, typically have large audiences of non-working parents of small children or work-from-home adults. Many commercials aired during soap operas offer products intended to target that socio-economic group, and offer products for parents and work-from-home job opportunities.
Geomarketing research companies implement a variety of methods to obtain the data they use in creating marketing maps. They may use Internet research to gain information about a region’s socio-economic status. They may conduct focus groups in which randomly selected individuals are brought together to provide feedback about various products. Government census data also may play a role in allowing researchers to gain information about the racial make-up of a particular region. A census also can show the area’s age distribution and what percentage of the population is made up by men versus women. This information may then be presented visually on a map and sold to a marketing company attempting to promote products within that region.
Geo targeting is the aspect of geomarketing that allows advertisers to offer products in a region based entirely on knowledge about that region. Gardening companies may offer heat-resistant plants in the south and cold-weather-hearty plants in the north based on climate conditions, for example.
Marketing based on geographical data is also very useful when marketing to Internet audiences. A server can locate a computer IP address and determine what region a user lives in and then place product advertisements on the users visited websites based on the IP address location. The server can also track what types of websites the user visits and determine the approximate age and status in life of the user, creating further specialization in the ads presented. A user who searches several times for baby furniture, for example, may begin to receive ads for baby clothing and baby stores. Likewise, a user who frequently visits auto-mechanic websites may begin to receive local advertising for auto parts and auto dealers.