Yahoo, this week has launched a more precise geo-targeting options, giving advertisers the ability to target ads by ZIP code rather than just by city and state.
This new tool will empowers search ad campaign managers to refine their search campaigns by selecting specific areas that their ads are aiming to reach.
The ZIP code targeting feature analyzes a searcher’s Internet Protocol (IP) address and manually-input user data, and then serves ads based on their location.
According to the Yahoo Search Marketing blog, the geo-targeting system would utilize users’ search queries, IP addresses and other information that pinpoints their location as well as which ads Yahoo search will serve them. This new system is intended to give advertisers more relevant clicks for their ads and eventually sales since these ad campaigns are assured of reaching their desired audiences.
Panama users can now deliver campaigns to cities and Zip codes, whereas previously they could only serve whole states and specific market areas. The new divisibility one-ups Google’s local ad capabilities, which are limited to city-level targeting.
It also appears as Yahoo faces pressure from the U.S. Justice Department to display its intent to innovate around search ads. The DOJ, in its investigation of the company’s outsourcing deal with Google, has listed such proof among the demands it hopes to have met before it is willing to green-light the tie-up, according to a Wall Street Journal report.
In a statement that seemed crafted to address the DOJ’s concerns, Yahoo said the new features are “reinforcing its commitment to be a leader in search.”
From another viewpoint, this new system might be too limiting to some advertisers as it eliminates users that might otherwise find their ads relevant to their needs. Hence Yahoo is suggesting that when selecting geo-areas, advertisers should choose up to 10 areas within a specific locality where their ads should be served.
To set it — visit the Campaigns >> Campaign Settings tab in your Yahoo Sponsored Search (Panama) account, then Select “ZIP/Postal Code” from the “Target By:” drop-down menu. An interactive mapping feature helps visualize ZIP code areas:
The menu also includes other geo-targeting options: Entire Market, Country, State/Province, City, and Designated Marketing Areas (DMAs). The latter represents regions determined by Nielson Media Research, which up until recently served as the basis of geo-targeting functionality, Yahoo explains.
Greg Sterling, founding principal of Sterling Market Intelligence, noted it is unlikely Yahoo undertook its enhancements to appease U.S. investigators. However, he said the move may serve to kill two birds with one stone — convincing both advertisers and investigators that it still means to provide a serious alternative to Google.
“There is a process that has been going on for a while,” said Sterling. “Having said that, I would imagine this is something that they see as contributing the impression they are not going to become complacent.”
He added, “It is part of an argument they are going to make but I think it is going to have its own…rationale.”
Yahoo’s new Zip code targeting comes with an interactive mapping interface marketers can use to choose cities and Zip codes. The city menu includes about 3,500 municipalities in the U.S and Canada.
Sterling noted that the next phase of geo-targeting innovation may come as marketers gain access to neighborhood audience segments through technologies such as WiFi triangulation.
“It begins to get really engaging when you can go down to the neighborhood level,” he said. “That is when you have got Census data showing who lives there.”
Before Yahoo added ZIP code-based targeting, Ask.com was the only major search engine with the option. Google lets marketers use ZIP codes as the basis for ad targeting and draw custom areas, but the option to terrace ad viewers “by ZIP code” is not offered on the AdWords dashboard.