Report: Yahoo! Adds Zip-Level Targeting

To date, the world of geotargeting and local online advertising has been about IP-based lookups. There are some exceptions involving targeting with user registration data, ads on maps, default map-location used for ad targeting and a few other situations where targeting can get down “below” an IP-based framework.

One can advertise on a site that targets neighborhoods (e.g., Zillow, Trulia) for example. Urban Mapping also has a neighborhood-level ad targeting product. (I’ve also written quite a bit recently about how location in the browser will affect online advertising.)

I got a call on Friday from ClickZ writer Zach Rodgers who told me that Yahoo! was adding Zip-level targeting to its search ad platform (Panama). Here’s his piece today.

His question was whether Yahoo! was rolling this out to address US Department of Justice concerns about hypothetical Yahoo! complacency if the Google-Yahoo! paid search deal were to be approved. I said no it probably wasn’t because some work would presumably have had to go into such as system and so it was likely in development for some time. 

He hadn’t been told how Yahoo! was doing this more specific targeting. I asked Yahoo! for comment but the company said it was in a “quiet period” (prior to its earnings announcement this week). So I don’t have insight into how their doing this. Assuming it works across the board it would give Yahoo! something that Google doesn’t really have (via AdWords) at the moment (but will soon).

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Yahoo!’s extensive newspaper partner relationships also permit geotargeting on newspaper sites (search and display) but it didn’t sound like that was what was being described.

Update: See comments for Zach’s clarifications and explanation of the targeting methodologies — appears nothing new added to the mix.  

Update II: More from the Y! Search blog

Geo-targeting is a clever little feature that can analyze a user’s search query, their Internet Protocol (IP) address and other user information to determine where they are and what ads to serve to them. For example, if you select Portland as a geo-targeted region for the sale of your product, searchers with an IP address in Portland will be served your ad. If you’re a Portland business, you’re likely to get more relevant clicks that can lead to more sales. Our new updates give you the chance for even more relevant clicks.

There’s nothing new here vs. Google. This is essentially catch-up for Yahoo!. Here’s more on the interface and how it works from Matt McGee.

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28 Responses to “Report: Yahoo! Adds Zip-Level Targeting”

  1. zach Says:

    Hi Greg. I’d like to clarify that my question to you on Friday was more concerned with whether enhanced geotargeting might help the company make its case with the DOJ. I never supposed the improvement was strictly motivated by the DOJ’s investigation.

    Also, I did get some information on the mechanism by which Yahoo is identifying user location. There are three methods: IP address look-ups, place identifiers within queries, and user-volunteered information. thanks.

  2. Greg Sterling Says:

    Sure. Sorry to mischaracterize. Thanks for the clarification. Looks like there’s nothing really new here in this mix.

  3. Tim Cohn Says:

    I recently wrote a piece about the differences I found between the four major search providers and their current geo-targeting advertising offerings:

    http://cohn.wordpress.com/2008/10/03/search-advertising-geo-targeting-options/

    Yahoo presently offers geo- targeting by DMA. However, I haven’t ever been able to get their map view of geotargeted ads to display on an actual map. Adding Zip Code targeting to their offers would be good but I think first seeing ad targets on Yahoo maps would be better.

    Ask.com has offered geo-targeting by Zip Code for some time.

    Google Adwords by far has the most precise geo-targeting advertising available.
    An advertiser can effectively create their own geographic advertising map overlay in almost any shape or size albeit based in reality on IP address data more so than latitude longitude coordinates.

    As a direct marketer, I have long suggested adding zip code targeting to Adwords because the majority of US discretionary income lies in a minority of Zip Codes.

  4. Greg Sterling Says:

    But the technology doesn’t actually support zip-level targeting in the majority of cases. The custom areas in adwords don’t get down to the level of granularity they imply — they will but they don’t currently in the majority of cases.

  5. Tim Cohn Says:

    Correct – which will remain the case as long as a search suppliers deliver a target based on their IP address or other aggregated data – not the actual physical address of the searcher and search appliance at the moment of search.

    Short of any of the triangulation methods you have written about becoming commonplace, Google’s geo-targeting features are the best the industry has to offer at this time.

  6. Greg Sterling Says:

    Triangulation is coming very soon to the browser of course. The only question is when Google will fully integrate it into AdWords

  7. Mel Says:

    I guess I’m still confused as to how triangulation within a browser will help on desktops connected to a router/switch via cat5. In those cases, there is nothing to triangulate against.

  8. Greg Sterling Says:

    My knowledge breaks down when we start talking technical details. But, code in the browser can identify proximity to WiFi and cell-tower locations. A database of those locations can locate the user.

    That information passed to a third party publisher (as with Fire Eagle or Google’s Geolocation API or Mozilla Geode) can be used to localize results or advertising.

    If, hypothetically, someone is using the Chrome browser that location sensing capability could be passed to Google (if a user is doing a search) and more location-specific ads can be served in search results.

    Not sure if that gets at what you’re asking.

  9. Tim Cohn Says:

    Good question Mel.

    I was under the impression the box was located via GPS or its equivalent via code baked into the browser that functions like a GPS trackstick.

    The search provider and searcher’s address are then reconciled through databases.

  10. Mel Says:

    For mobile devices with WiFi and/or cell gear it’d work. But a desktop typically won’t have a wireless device attached that the browser can check.

    No wireless device means you can triangulate.

    Don’t get me wrong. I love the idea on devices that can do it … but the typical desktop won’t be able to do it automagically. User will still have to type in or click on their location.

  11. Mel Says:

    Oops – Meant …

    No wireless device means you “can’t” triangulate.

  12. Tim Cohn Says:

    I understand what Mel is saying – got to have a receiver to triangulate transmission against – kind of like solving problems and inventing products via blogs….

    Can’t GPS automagically identify location without triangulation though?

  13. Mel Says:

    GPS still needs a receiver.

    I’m guessing that for a desktop, they’d just have you input the location and store it … since the desktop doesn’t move all that often.

  14. Tim Cohn Says:

    I thought the “receiver” resided in the browser code.

  15. Mel Says:

    No, a receiver is an antenna and the circuitry to go along with it. Code alone can’t pick up GPS signals.

    And then, even when you have an actual GPS receiver, they tend to suck indoors when they can’t see the satellites. Those signals have a tough time getting thru roofs and walls.

  16. Tim Cohn Says:

    Ok my mistake – I guess the browser receiver hasn’t been invented yet!

    My HughesNet internet satellite requires a mini-earth station to get signal.

    I had to install a marine antenna on my roof to get XM consistently inside my house.

    If XM is stronger than DirecTV etc., I would guess a GPS signal would be even weaker than satellite TV’s signal which still requires a dish too.

  17. Greg Sterling Says:

    Triangulation doesn’t require a receiver; just code that can identify the nearest cell tower or wifi hotspot

  18. Mel Says:

    For a desktop, how do you pick up a signal from a cell tower or wifi hot spot without some form of receiver?

    There has to be a device to be involved with triangulation. Code in a browser alone cannot do that. It has to tie to a device that can pick up and interpret radio frequency.

    You gotta have hardware. On mobile devices, it’s built-in. Not so on desktops.

    To triangulate with cell towers, you don’t have to be able to talk to them, but you do have to be able to pick up and interpret the signal so that you can deduce the tower’s ID.

    Only after you have an ID, or better, several ID’s … only then can code hit the database and figure out where your are.

    Otherwise, on a desktop, it’s going to be type-it-in and store it … and not automatic.

    Triangulation of radio signals requires some type of receiver capable of receiving those signals.

  19. Yahoo Adds ZIP Code Ad Targeting Says:

    [...] Sterling’s blog post about today’s news offers additional thoughts on Yahoo’s announcement and the future of [...]

  20. Greg Sterling Says:

    Tim: relies on Wifi/80211 technology in computers: http://news.cnet.com/1606-2-6084306.html (later in interview). Also see Skyhookwireless.com

  21. Tim Cohn Says:

    Ok – cool.

    So the browser receiver has been invented for boxes with wifi. That covers all pdas and recent/future generation laptops and I guess every new desktop that has wifi built in.

    I haven’t bought a desktop since the 90s so I don’t know whether they all ship now with wifi or not? Do they?

  22. Darrin Clement Says:

    ZIP Level targeting online is great, and yet indeed nothing new (disclaimer: my company licenses ZIP Code polygons to many major online players). In many cases, particularly when combined with demographics, ZIP Code is the right level (or you could even go sub-zip to the postal carrier route mapping level).

    I don’t follow the triangulation logic fully, but that seems a lot more reliable than IP targeting. Then you could use Urban Mapping’s or Maponics’ neighborhood boundaries to do “point-in-polygon” level targeting. And that *can* include demographics to combine with other search-based info to deliver the right ads.

  23. Tim Cohn Says:

    It does Darrin but as Mel pointed out there are potentially a billion fixed desktops out there still as yet unable to automagically report their locations without the new wifi enabled tech Greg has pointed out above.

  24. Mel Says:

    Tim: That’s what I was trying to say (poorly) earlier. Mobile devices, PDAs, laptops, etc … the necessary device (the radio part) is buil-in for later models. The code in the browser can access the data from these devices to do the triangulation.

    As far as desktops though, some may come with wifi, but I haven’t seen them (I haven’t looked that hard either).

    I’m running two XP boxes, one Linux box, an XP laptop … and an XP laptop from work.

    They laptops are fine for this with their wifi. The desktops are not (mine anyway).

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  27. ian Says:

    hence the need for a means of synthetically geotargeting in absence of location awareness. Enter the long tail of geographically-modified keywords: http://urbanmapping.com/geomods/index.html
    find me another way to do this and i’ll give you a dollar

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