MP3.com, Digital Island Team for Geographic Targeting

Vivendi’s music site MP3.com will be able to target ads geographically, thanks to a new agreement with content delivery network Digital Island.

According to the agreement, San Francisco-based Digital Island — a unit of telco giant Cable & Wireless — will use its TraceWare Remote technology to enable MP3.com to target Web ads based on the location of the visitor.

“Digital Island’s TraceWare Remote service allows MP3.com to target new markets and broaden our business model to explore new revenue streams for us and our advertisers,” said Steve Sheiner, executive vice president of sales and marketing at the MP3.com.

Additionally, a Digital Island spokesperson said the service will also be used to append geographic information to profiles of MP3.com users — increasing the marketing value of the site’s consumer database.

The service, which the firms say is accurate down to the city level, is based on technology from Digital Envoy, following a strategic agreement with Digital Island signed last year.

The targeting works by detecting the origins of a user’s hypertext transfer protocol request, which MP3.com redirects to Digital Island. Little more than Web coding is necessary to install the service, the companies said.

Geographic targeting capability could appeal to Web publishers because it offers the possibility of attracting new advertisers, such as regional brands that don’t want to waste marketing dollars by sending ads to people outside the region. Additionally, advertisers could come up with special creative targeted toward people in a certain region or city — a technique long practiced in traditional media — which could increase ads’ effectiveness.

As a result, the technology has found takers in smaller online markets like Asia and Europe, where it’s important to deliver creatives in the correct languages. Still, it’s yet to garner similar interest from U.S. advertisers — in spite of the fact that the services have been available from Digital Island and other providers since 1999, and the major ad networks offer geographic targeting as well.

One reason for its slow adoption could be that traditional agency media buyers, by most estimates, are only just beginning to view Web ads in the same light as traditional media. For instance, dayparts — long sold in television and radio — are only now coming into their own online, thanks to encouragement by groups like the Interactive Advertising Bureau and firms like MarketWatch.com (an IAB member and early daypart adopter).

Yet, there are signs that geographical targeting might be picking up at home as well. In May, Microsoft’s MSN portal signed a similar deal with Digital Impact that a spokesperson said also includes the potential for regional targeting.

A month later, Yahoo followed suit with a similar targeting deal with Digital Impact competitor Akamai. And earlier on Wednesday, Dresdner Bank launched the technology on its Web interface.

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