Geo-targeting means having the ability to target a marketing or advertising campaign at a limited set of visitors based on their physical location. Advertising programs that support geo-targeting allow you to control where your ads are displayed based on parameters like country, state, city, or even within X miles of a postal address.

Geo-targeting is useful when your online presence is used to promote an offline business. If you want to drive foot traffic to your brick & mortar store, you can limit your campaign to only be shown to people who are within 40 miles of your shop using geo-targeting. Google AdWords will even integrate your locally targeted ads into the Google Maps service, making it even easier for your customers to find you.

Another use for geo-targeting is to show different versions of an ad to different audiences. For example, a California based vendor could promote their affordable shipping rates in the east coast geo-targeted campaign, while emphasizing the fast shipping time in the west coast campaign.

When shopping for an online advertising service, make sure that your final choice supports geo-targeting so you can get the most out of your marketing budget. Most large advertising networks, including the following three, support geo-targeting:

• Google AdWords
• Yahoo Search Marketing
• Microsoft adCenter

For more definitions check out our Glossary of Online Business Terms.