Recently I was asked for my thoughts on IP geolocation and geotargeting. Specifically, 5 questions about the market. It’s not an area I know a huge amount about. Below are the questions with some initial thoughts.

Anyone who can add further insight?

1. Who are the players and how do you rate them?
The ones I’m most aware of are:

– Quova (http://www.quova.com)
– Digital Envoy (http://www.digitalenvoy.net/)
– Maxmind (http://www.maxmind.com)
– IP2Location (http://www.ip2location.com)
– CountryHawk (http://www.cyscape.com)
– NetGeo (http://www.netgeo.com)

I’d say Quova are market leaders in the marketing / analytics use of IP Geolocation and Digital Envoy are leaders in the fraud / conditional access / rights management side of things.

2. How would you define the markets and how would you rank them by opportunity (size/revenue potential)?
The areas I think IP Geolocation applies to are:

2.1 Marketing / Advertising / Analytics
Basically about customising the user experience based on geography to improve acquisition / conversion / retention rates. Probably the most ‘obvious’ market opportunity at the moment. In time I’d expect the IP Geolocation part to be embedded in the (web) analytics products (e.g. Pilot Hitlist - http://www.issel.co.uk/aboutissel/pressreleases/geoloc06062003.htm)

Also, it can (and is being) be used for geographically targeted ad serving – again better targeting = lower costs, higher returns. Typically the technology would be embedded in an ad serving platform like DoubleClick.

2.2 Conditional Access
Basically about restricting access to content / software / services etc. based on location. This includes everything from network management (e.g. managing large internal company networks, who has access to what, software usage / web services, remote access and working etc.) to digital rights management. The big area at the moment (and set to grow) is content rights management, especially sports rights at the moment:

– Because sites couldn’t guarantee to restrict access by country, the International Olympic Committee announced a 10yr ban on streaming audio and video content!
– “To create a good product we needed to go out and buy additional rights… for us to be able to afford those rights we had to limit them by territory” Sky Sports business development director
– “When we go live we’ll definitely go for geotargeting” Daniel Marion, Head of Technology, UEFA
– “Geotargeting allows us to make different offers to different users based on where they live. We’ve been doing it for the last six months and it has certainly increased sales” Adam Freeman, Guardian Unlimited.

2.3 Fraud Prevention / Risk control / Crime control
Basically about being able to track wrong-doers down. Fraud is significantly higher in cyberspace, and the originating location of the transaction is a key indicator to its fraud risk (e.g. retailers don’t like to sell to certain high-risk areas like parts of Birmingham where return-rates are apparently super-high..). IP geolocation will increasingly be used in the fight against terrorism, cybercrime, child abuse etc.

2.4 Compliance / Legislation
e.g. financial services – who have you shown what and when? Regulations and digital rights vary by jurisdiction, so the business-critical issue of compliance is heavily dependent on geographic knowledge.

2.5 Mobile
I’m sure there must be something here around WAP / geotargeting for mobile users but need to talk to our mobile expert friends to find out more… obviously there’s GSM as a mobile standard for location-based services already.

3. In each of these markets, how would you believe purchase decisions are made? By who?
Different people for all of the above I’d say. However, in time it’s likely to be commercial / operational / finance people who have the last word rather than IT people.

4. Is this a self sustaining segment or will all IP Geolocational data ultimately be available/plentiful
I think it is certainly set to grow a lot. I’d also expect more basic data to become more (freely) available but there’ll always be an opportunity to “add value” through increased sophistication, integration capabilities, customer service etc. At the moment, as it is a new-ish area, I suspect there are more sales direct to the end user. Over time I’d expect to see these companies’ data, services and solutions embedded in other peoples’ technologies, tools and services – so more indirect sales / channel partners.

5. Any other insights or background you could share would be really useful.
It’s an interesting area. Probably in the longer term there will be more money to be made in the ‘boring’ conditional access / fraud prevention / network management type areas rather than the marketing / advertising / analytics areas where I’d imagine the technology providers will embed the technology as part of their offerings.

Ashley

Hi Ashley

We have integrated Maxmind for statistical analysis of users to a website and it was extremely easy and straightforward.  The only issues / problems we have found / are aware of are:

1. The accuracy is pretty good, but not completely accurate.  Global company firewalls / VPN routers etc. tend to skew location quite considerably, as well as large ISPs which use a range of IP address for outgoing connections. 

2. The Geo location for an IP address I imagine would need updating periodically.  I am not sure anyone is doing this often enough / accurately enough as it is close on impossible without user feedback to get this information.  So I imagine it will always be the case that Geo location services will always be slightly inaccurate.

3. Delivering customised content by region /.language is done more efficiently by using the header from the user’s browser to determine their location / language preferences. 

4. Note from Alex’s post: Although people like Akamai do have extensive IP to location mapping services, they are focused purely on finding the closest physical server to your network location and less worried about your physical location.  I am pretty sure because of that focus that they too will suffer from the same problems that everyone else suffers from.

BTW. I think in terms of DRM and location again companies will just have to accept a certain amount of inaccuracy.  I know Times Online charge non UK based surfers for access to the site, but don’t charge UK browsers. 

Cheers.

Matt
Lemon Foundation

On 12:17:24 12 August 2004 Ashley wrote:

Recently I was asked for my thoughts on IP geolocation and geotargeting. Specifically, 5 questions about the market. It’s not an area I know a huge amount about. Below are the questions with some initial thoughts.

Anyone who can add further insight?

1. Who are the players and how do you rate them?
The ones I’m most aware of are:

– Quova (http://www.quova.com)
– Digital Envoy (http://www.digitalenvoy.net/)
– Maxmind (http://www.maxmind.com)
– IP2Location (http://www.ip2location.com)
– CountryHawk (http://www.cyscape.com)
– NetGeo (http://www.netgeo.com)

I’d say Quova are market leaders in the marketing / analytics use of IP Geolocation and Digital Envoy are leaders in the fraud / conditional access / rights management side of things.

2. How would you define the markets and how would you rank them by opportunity (size/revenue potential)?
The areas I think IP Geolocation applies to are:

2.1 Marketing / Advertising / Analytics
Basically about customising the user experience based on geography to improve acquisition / conversion / retention rates. Probably the most ‘obvious’ market opportunity at the moment. In time I’d expect the IP Geolocation part to be embedded in the (web) analytics products (e.g. Pilot Hitlist - http://www.issel.co.uk/aboutissel/pressreleases/geoloc06062003.htm)

Also, it can (and is being) be used for geographically targeted ad serving – again better targeting = lower costs, higher returns. Typically the technology would be embedded in an ad serving platform like DoubleClick.

2.2 Conditional Access
Basically about restricting access to content / software / services etc. based on location. This includes everything from network management (e.g. managing large internal company networks, who has access to what, software usage / web services, remote access and working etc.) to digital rights management. The big area at the moment (and set to grow) is content rights management, especially sports rights at the moment:

– Because sites couldn’t guarantee to restrict access by country, the International Olympic Committee announced a 10yr ban on streaming audio and video content!
– “To create a good product we needed to go out and buy additional rights… for us to be able to afford those rights we had to limit them by territory” Sky Sports business development director
– “When we go live we’ll definitely go for geotargeting” Daniel Marion, Head of Technology, UEFA
– “Geotargeting allows us to make different offers to different users based on where they live. We’ve been doing it for the last six months and it has certainly increased sales” Adam Freeman, Guardian Unlimited.

2.3 Fraud Prevention / Risk control / Crime control
Basically about being able to track wrong-doers down. Fraud is significantly higher in cyberspace, and the originating location of the transaction is a key indicator to its fraud risk (e.g. retailers don’t like to sell to certain high-risk areas like parts of Birmingham where return-rates are apparently super-high..). IP geolocation will increasingly be used in the fight against terrorism, cybercrime, child abuse etc.

2.4 Compliance / Legislation
e.g. financial services – who have you shown what and when? Regulations and digital rights vary by jurisdiction, so the business-critical issue of compliance is heavily dependent on geographic knowledge.

2.5 Mobile
I’m sure there must be something here around WAP / geotargeting for mobile users but need to talk to our mobile expert friends to find out more… obviously there’s GSM as a mobile standard for location-based services already.

3. In each of these markets, how would you believe purchase decisions are made? By who?
Different people for all of the above I’d say. However, in time it’s likely to be commercial / operational / finance people who have the last word rather than IT people.

4. Is this a self sustaining segment or will all IP Geolocational data ultimately be available/plentiful
I think it is certainly set to grow a lot. I’d also expect more basic data to become more (freely) available but there’ll always be an opportunity to “add value” through increased sophistication, integration capabilities, customer service etc. At the moment, as it is a new-ish area, I suspect there are more sales direct to the end user. Over time I’d expect to see these companies’ data, services and solutions embedded in other peoples’ technologies, tools and services – so more indirect sales / channel partners.

5. Any other insights or background you could share would be really useful.
It’s an interesting area. Probably in the longer term there will be more money to be made in the ‘boring’ conditional access / fraud prevention / network management type areas rather than the marketing / advertising / analytics areas where I’d imagine the technology providers will embed the technology as part of their offerings.

Ashley