Untangling the Web of IP Addresses | Industry Insights | All MKC Content | ANA

Untangling the Web of IP Addresses


In today's digital age, the world of advertising has undergone a remarkable transformation, with many marketers now relying heavily on the intricate web of IP addresses to target their audiences effectively. However, beneath the surface of this seemingly straightforward technology lies a labyrinth of complexities that challenge advertisers and data analysts alike.

IP addresses, those numerical labels assigned to every device connected to the internet, are not just gateways to online content but also gatekeepers to a treasure trove of data. They play a multifaceted, and sometimes perplexing role in the pursuit of more personalized, efficient, and privacy-centric advertising strategies.

On the most basic level, Internet Protocol (IP) is a set of rules that govern the format of all data that's sent via the Internet. It is a unique address that identifies an internet-connected device, be it a computer, mobile phone, connected TV or smart refrigerator. Without these protocols, the Internet wouldn't be able to tell one device from another, and data would be misdirected.

Types of IP Addresses

Based on the description of IP addresses above, one can be led to believe that it is a very straightforward topic, but it is actually quite complex. The complexity stems from many reasons, beginning with the fact that there are multiple types of IP addresses, each of which is assigned a unique range.

In the content below I am going to provide a fundamental explanation of each type of IP address with the hope that marketers will be able to better understand how this intertangled web works.

  • Private IP address: IP addresses that can only be used by devices (aka "hosts") on the same network, such as a corporate network. These are non-Internet routable and are clearly defined in RFC6761. The Request For Comment is the main standards-setting body for the Internet.

  • Public IP address (aka internet routable addresses): IP addresses that are internet routable, meaning they can be reached from any device/machine in the world, and are clearly defined RFC1366, aka "Guidelines for Management of IP Space."

  • Fixed IP address: IP addresses that are routed via cable, DSL, or fiber infrastructure for internet connectivity, assigned to non-mobile devices. Fixed IP addresses can be both static and dynamic (see below).

  • Mobile IP address: IP addresses that are routed via cell tower infrastructure for internet connectivity assigned to mobile devices. Mobile IP addresses are always dynamic IP addresses.

  • Static IP address: IP addresses that have a consistent geolocation, meaning at the time it is analyzed, its geolocation is the same as previously identified. Static IP addresses are likely tied to the same building(s) if within an ISP block.

  • Dynamic IP address: IP addresses whose geolocations change frequently. They're dynamic because they can service different end users at any given moment. Dynamic IP addresses are common in ISP, mobile carrier and proxy blocks because end users fluctuate within a given area.

For more on fixed versus mobile IP addresses, jump to the "Distinguishing Between Fixed and Mobile IP addresses" section of this paper.

Business Use Cases for IP Address Data

By themselves, IP addresses don't tell us much about the device or user behind it. Fortunately, however, marketers can work with partners who can provide a greater understanding of how IP addresses are assigned. This allows the industry to glean extensive context around the IP address, which marketers, security teams, data analysts, and other stakeholders can use to make decisions. Most common business use cases are:

  • Fraud and Security: Understanding if a device accessing a network is coming from the expected location. Is the user masking their location to commit fraud or other nefarious activity?

  • Localizing content: Using knowledge of location of IP address to provide better customer experiences through language, currency, and other defined user preferences.

  • Legal and Licensing compliance: Compliance with regulatory requirements for providing offerings to visitors of gambling sites, for instance, or other related sites by accurately understanding the geolocation of the visitor's IP address. IP address data can also ensure that the distribution of content adheres to copyright or licensing based on geography.

  • Advertising Yield Optimization: Improving ad conversion rates by targeting using geolocation; growing addressable market by accurately targeting new geographic markets; and optimizing campaigns using localized target segments to name a few.

  • Analytics: Increasing value of publishers' audience segments by including geographic regional data associated with traffic to websites; and improving internal understanding of a company's customers. .

The types of context in this data includes:

  • Proxy data (e.g. a technology often used to mask the location of an IP address for fraudulent purposes)
  • VPN provider data
  • Address type: mobile, static, dynamic
  • Company name that owns that IP address
  • Organization name, which is the organization associated with an IP's corresponding range

The contextual data that surrounds an IP address is crucial when a company queries an IP address. In many cases, companies have additional data that can be used in combination with this data to make better decisions regarding everything from ad placement to cybersecurity risks, streaming content permissions and more.

While IP address targeting offers advertisers the potential for precise audience segmentation and personalized messaging, the ever-changing nature of IP addresses requires a strong working knowledge of how this world works. Without a foundational understanding marketers won't be able to maximize the benefits IP intelligence has to offer. It will also help companies select the right IP analytics partner.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Vinod Kashyap is chief product officer at Digital Element.