All the search engines offer the option to target a specific market with your ad. Most engines use IP address as a criteria to determine the origin of a user. Search Engine might also use other information they have to make sure the IP data is accurate.

IP addresses have their weaknesses to identify exactly where a user is located. It works quite well at a country level, but it is not so accurate at a city level. “If you want to target a specific country, you'll be able to achieve a high degree of accuracy, greater than 98 percent, according to Mark van der Linden, who works for a company called RealMapping in Amsterdam.”

Let’s see more in details where IP targeting is inaccurate. As identify in this article: “The Accuracy of IP Targeting” by ClickZ NEtworK:

- The first (and biggest) problem is that, for several reasons, not all IPs can be mapped to an accurate location. Take all the IPs associated with AOL users, for instance. Anybody who has seen a WebTrends report knows that all AOL users seem to be coming from somewhere in Virginia. This is caused by AOL's use of proxy servers to handle their web requests.

- As a second problem, we have the level of accuracy at a city level: "Someone who works at IBM visits one of the sites of your campaign. The ad server gets its request, and figures out he's accessing the web from IBM's domain. What does it do now? How does the database can distinguish between a New York-based IBM worker and a New Jersey-based one?

This is where the issue of the quality of the database comes into the picture. Whoever maintains the ad management system can deal with this issue in one of those three ways:

1. Take the IP out of the database or disregard it
2. Try to determine how IBM has set up its network and act properly
3. Fudge it by guessing what percentage of the IP block is in New York, using that percentage as the degree of accuracy.

Thus, as the geographic footprint gets smaller, you can see how either accuracy or targetability can be compromised.