Today, almost every digital device we use has an IP address. What is an IP address? It stands for Internet Protocol Address and it’s what computers and other digital devices use to introduce themselves to each other. Think of it as a door knock that leads to an invitation to come in and enter. Computers, cell phones, cars, even your EZ-Pass tag has an IP address.

The good news for marketers is that once your IP address has connected with another address (i.e. you visit Amazon’s website) you have given permission to speak with one another, which means the party you’re visiting (i.e. Amazon) can then connect with you at a later time and send you information as well. This return information is usually in the form of a “cookie,” which contains encrypted data that remains on your computer or phone until you or some IT person deliberately removes it.

For business, this is a marketing boon, allowing companies to keep track of potential customers interested in their wares and services – all of which is be done automatically via IP tracking.

What information can you get from an IP address?

There are actually two kinds of IP addresses – static and dynamic. Static simply means you are using the same address over and over (i.e. your home computer or your personal smart phone). Dynamic means you are sharing an IP address with a number of customers within your Internet Service Providers (ISP) area. Sometimes public uses computers in a library or in an internet café will share a dynamic address.

Whether static or dynamic, the minute you visit a website the IP address you’re originating from can be captured. The website will keep a record of the time, date and data it collects from your address. A “cookie” will be sent to your computer for future reference.

Limited information is freely available the moment a connection is made. For example, because IP addresses come in batches representing certain global regions, a fair amount of geographical information is immediately known. Cross reference this information with other demographic information available and you can develop a composite profile of the visitor and the particular region they’re living in.

It can get personal… to a point.

If your company utilizes IP tracking software, you can gather quite a lot of pertinent information. The moment someone visits a website, IP tracking software identifies the IP address of the visitor and reports what pages they visited on your site, how long they stayed and whether they filled in any contact or registration forms. The “cookie” sent to their computer, phone or device will begin to track their preferences. The IP tracking software will start to compile data captured from the same IP address as he or she visits other websites, noting preferences such as shopping habits, reading preference and other interests.

Some IP Lead tracking software can collect information from both organic, as well as paid search platforms, such as Google AdWords, providing more customer data, which can assist your company in finding richer, more promising prospects.

All this information provides a detailed dossier of a prospect’s demographic, preferences, purchasing history and even psychographic information. The IP tracking software can also determine email addresses and phone numbers associated with the IP address as well.

Once captured, the information can be used to target online advertising on websites the prospect visits and/or send emails with sales information to prospects who are already predisposed to a particular company’s products or services.

IP tracking and the law.

Each country around the globe has its own privacy laws, which govern the use of personal information gathered over the internet. In the UK for example, there is a Data Protection Act, which regulates what is and is not a breach of privacy. In many countries in Europe, IP addresses can be considered personal data, so care should be taken by anyone doing international business and gathering prospect information over the internet overseas.

In the United States, on the other hand, there is no singular law that regulates the internet, but there are both state laws and federal regulations, which limit the kind of information you can gather on individuals.

On a federal level, the U.S. tends to regulate by sector (i.e. banking, finance, healthcare etc.) It goes without saying that personal health records cannot be gathered on individuals by nature of the HIPAA laws and financial privacy is protected by law in the U.S.

For general marketing purposes, however, the U.S. tends to be fairly liberal, with the exception of California, which has a strong consumer identity protection regulation (please consult https://www.huntonprivacyblog.com/wp-content/uploads/sites/18/2011/04/DDP2015_United States.pdf for specifics.)

As long as consumers visit legitimate websites, the information they pass along via IP Address is pretty much fair game, provided the data is not used to disparage the visiting prospects, or is used to sell illegal or illicit materials to them.

What a marketer cannot and should not do is try to reverse engineer the process by creating phishing schemes to capture personal information. This is the behavior of scammers and illegal businesses. IP tracking, on the other hand, is perfectly legal and very effective marketing and sales tool.

More and more business is conducted on the web.

The Wall Street Journal report in mid 2016 that 51% of purchases are now made online, the tide has obvious turned and consumers have embraced online buying. Just as significant, 90% of business-to-business transactions begin with a web search, making it easier than ever to identify potential prospects.

Given the current attitudes in the U.S. for capturing information and leads over the web, the case for utilizing IP tracking software or service is a smart marketing decision for any legitimate business from Macys to your local pizza parlor. As long as the system is not abused or used to cause harassment of any kind to individuals, the idea of IP tracking seems both prudent and reasonably ethical.