Exactly how accurate is IP Geolocation?

IP geolocation is really hit-or-miss, depending on both how the user's ISP assigns IPs and on the IP geolocation database you're using. For instance, I made a simple PHP script, IP2FireEagle, which looks up your IP. I found that the database kept placing me 10+ km to the west of where I really was. Updating my entry in Host IP wasn't the greatest, as it soon got reverted, presumably by someone also occasionally assigned that IP by my ISP! That being said, I found that Clarke has very accurate coordinates (not that this it's using IP geolocation per se but rather Skyhook's API and their WiFi geolocation database).

If it's a website for your friends and you know they have iPhones, I would suggest using its browser's support for navigator.geolocation.getCurrentPosition(). That is, get the location via Javascript and submit it to your server via an AJAX call. Even better since you want to use Google Maps, they give you a short tutorial on how get your friends' locations and then update a map.

Excerpt From: http://www.clickz.com/822881

IP targeting has been around since the early days of ad serving. It's not very hard to write code that will strip the IP address from a request, compare it to a database, and deliver an ad accordingly. The true difficulty, as we shall see, is building and maintaining an IP database.

One of the first applications of information in an IP database was targeting to specific geographic regions. Most commercial ad management systems have IP databases that can make geographic targeting possible. However, there are a couple weaknesses in this method. The first (and biggest) problem is that, for various 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 appear to be coming from somewhere in Virginia. This is caused by AOL's use of proxy servers to handle their web requests.

In the interest of saving space, we won't get into the reasons why AOL makes use of proxy servers. The important thing is that AOL does use them, and as a result, all its users appear to be accessing the web from Virginia. Thus, it is impossible to attach meaningful geographic location data to an AOL IP, and those IPs must be discarded from any database that wants to maintain a reasonable degree of accuracy.

Other ISPs and networks may use a method known as dynamic IP allocation for its users. In other words, a user might have a different IP address every time he visits the Internet. You can see how this might affect the accuracy of a database.

But the real difficulty in discerning geography from an IP address has to do with the level of specificity that a media planner might expect from this targeting method. The first few geo-targeted campaigns that I put together early in my career had to be accurate to the ZIP code level. This level of specificity is not practical via IP targeting.