Before we get ahead of ourselves, we should discuss what we mean when we say IP geolocation, and more importantly, what we don’t mean. 

IP geolocation refers to the practice of tracing a website visitor’s IP address back to a location on earth (geolocation).

Now, does this mean “Big Brother” knows where you are and is watching your every move? Probably not. But this technology does have a variety of interesting applications based off of your website visitor’s information, such as city, region/state, postal code, country, Latitude/longitude, and more.

Here’s How IP Geolocation Works:

All internet-connected devices have a unique number (referred to as an address) assigned to them to ensure the right data is going to the right device. These numbers change based on the internet connection your device is using, however, they are always unique to the device itself.  For example, when you’re binge-watching reruns of The Office, your IP address makes sure it shows up on your laptop and not on your neighbor’s iPhone.

These numbers are leased out by Internet Service Providers (ISPs) who determine a network's IP address based on geographic location – meaning all networks in a given area will have a similar (but not identical) IP address. ISPs keep a record of the IP addresses they lease out and store that information in public databases such as ARIN. Using this information, basic IP geolocation tools look at a website visitor's IP address and compare it to public databases to determine a user’s geographic location. 

Unfortunately, public databases are woefully unreliable. They are often outdated, riddled with inaccuracies and lacking much of the information that would be meaningful to businesses. However, private companies that provide IP geolocation data often use their own proprietary reverse IP lookup methods, technologies, and algorithms to gather this information as well as provide other important firmographic information associated with an IP address. This data is much more in-depth, up to date and reliable than the IP data from public sources (more on that in this article). 

Now that we’ve covered how this information is collected, let’s dive into the fun stuff – how it’s actually used. Here are a few of the many uses for IP geolocation data:

Tracking Marketing Campaign Effectiveness: If you’re running an account-based marketing (ABM) campaign, segmenting your target accounts by geographic region can be an effective way to deliver highly relevant messaging to your audience. IP geolocation can tell you exactly where your website traffic is coming from, allowing you to manage and optimize your campaigns to get exactly the traffic you want. This also has the added bonus of discovering potentially unknown market segments that you may never have thought of by looking at spikes in activity from certain regions.

Content Personalization: This is a hugely broad topic and can involve dynamically personalizing anything on your website from a simple welcome banner, to copy, images, calls-to-action, etc. Language preferences can also be shifted in real-time, based on visitor location, to greatly enhance the user experience on your site. 

Location-Based Advertising: If your company sells snow blowers, it doesn’t make much sense to advertise in Florida, does it? By leveraging location-based advertising you can reduce ad waste by narrowing down your target audience to geographic region, ensuring only relevant buyers are seeing your ads. Savvy marketers can even personalize website content or craft unique user experiences based on geographic region.

Visitor Location: This might seem like we’re splitting hairs here, but many companies visiting your site can have multiple offices across the globe. One company might have offices in India, China, and the US. Teams in these offices may have needs, experiences, or expectations that vary widely from one geographic location to the next, and thus may require different sales and marketing strategies to reach them. Knowing not only where a company is headquartered, but also where the individual visitor is located will ensure you send them the most relevant message. 

Sales Territory Assignment: If your sales team divides leads up by territory or region, this is invaluable as it saves a tremendous amount of time and energy by automatically routing leads to reps based on the location of the inbound lead. 

Fraud Detection: The constant battle between scammers and businesses is like a never-ending game of cat and mouse. On average, roughly 30,000 websites are hacked or infected with malware every month, making it more critical than ever to leverage new defensive technologies to your advantage. Using IP geolocation to detect and mitigate fraud throughout your website is paramount to enhancing your IT security as your website traffic increases. Here are some classic fraud examples and how to combat them using IP geolocation:

• False Billing - At its core, this scam involves a scammer billing a company for services that were never rendered. This scam relies on an overburdened Finance department that will simply approve an invoice and write a check without giving it an in-depth look. Having geolocation information can prevent these types of invoices from even making it to your Accounts Payable inbox. 
• Credit Card Fraud: Companies that host an online checkout function on their site are no strangers to credit card fraud. Scammers using stolen credit card information often from outside the country can spoof their IP address to mimic that of another country. If the majority of your customers are U.S. based for example and you suddenly see big spikes in checkout attempts from a country where you don’t do any business, this could be a red flag that scammers are trying to gain access to your business. However, IP geolocation technologies can look beyond a spoofed IP address to tell you a visitor's actual location and prevent them from making a purchase. 
• Phishing: This is a broad term for an entire world of scams but often involves a scammer trying to get a person to open a link that infects a computer with a virus, malware, or other system-crippling threat. Some regions are known for being the origin locations of many of these fraudulent activities, and having IP geolocation information at your fingertips can allow you to essentially block these users from entering your site, filling out forms, or contacting you at all - giving your site an extra layer of defense against these attacks. 

One note of caution to consider when looking into using IP geolocation data for these or any other applications is where the data itself is coming from. As we cover in this article, there is a huge difference in data quality between public IP data registries and private IP data sources. If you do decide to implement IP geolocation data, I would encourage you to shop around and find the best quality data out there.

If you want to learn more, check out the 10 Questions You Should Ask Your IP Data Vendor.