IP Geolocation Technology: How Exact is a Pinpoint?

IP geolocation technology has been around for a long while. It is the only non-intrusive tool a service provider can use to estimate the geographical location of online visitors.

IP geolocation has proved itself as the main driving engine for delivering location-based services such as content localisation, digital rights management, customer targeting and fraud detection.

But how accurate is an IP Geolocation lookup? Can we trust it to make critical business decisions?

IP Geolocation accuracy has been one of the heavily debated topics for many years across many platforms. We can find many complaints on forums such as IP addresses not showing the correct location or only country-level data being reliable.

One of the most popular myths is that the IP Geolocation is inaccurate because it is based on public data and that it usually points to the organisation’s headquarter location rather than the real user’s location.

The reality varies widely because not all IP Geolocation services are made the same, and they often utilise different technologies to source their data. The goal of this article is not to compare different IP Geolocation providers.

Check out the Daily IP Geolocation Accuracy Report for various service providers.

We address the fundamentals of IP Geolocation and then explains the best accuracy and outcomes we can theoretically expect out of ‘perfect’ IP Geolocation. It then outlines conceptual limitations we should be aware of, and to what extent we can trust the data we receive.

IPv4 is here to stay

When we refer to an IP Geolocation, we are considering the IPv4 address space first because most of our web traffic is still coming from IPv4 addresses.

IPv6 was created to solve the global shortage of IPv4 address space by providing a whopping 2128 extension. However, it has not happened even though two decades have passed since it was introduced.

There are many reasons why IPv6 is not taking flight. The main reason is probably the most surprising one –

there isn’t a real shortage of IPv4 addresses, after all.

Well, to some extent there is, as it is almost impossible to get some for free anymore even if it is vital for your business. It has just become a cherished commodity, and it is here to stay.

How is it possible, you may wonder? There are only a limited number of 2^32  or roughly 4.3 billion addresses available on IPv4, so how can they accommodate over 7 billion internet hungry people on our planet and allow for enormous expansion into the IoT space?

Surprisingly - yes, it can, and it currently does it for even substantially less than that!

First, despite the theoretical maximum of 4,294,967,296 IPv4 addresses, not all are allocated for public internet use.

And then, out of those allocated, how many do you think are being actively used?

Remarkably, there are currently merely 2.9 billion publicly routable IPv4 addresses servicing our entire internet! Visit our online IpV4 address space monitoring for up-to-date figures.

And this is whilst there are:

• more than 4.5 billion home internet users in the world
• over 300 million active websites
• over 3.5 billion smartphone users in the world
• over 7 billion IoT devices and it is growing
• millions of public IP addresses utilised by the global network infrastructures

So how is that even possible?

It is because we only need a dedicated, publicly routable IP address when we require two-way communication such as when we need to be able to reach out at will and also to receive incoming connection requests from the outside world.

However, most of our internet activities are perfectly suitable for one-way communication only. For instance, when we browse the internet, we initiate the connection ourselves, and we don’t expect websites or other web service providers to stay actively connected to our device. We even hope they don’t, otherwise, it would give rise to significant security challenges.

Websites, on the other hand, are not expected to reach out or initiate a connection. And since websites work with hostnames, it is perfectly suitable to hook them up behind a shared IP address.

Theoretically, it is possible to put all of our over 300 million worldwide active websites behind a single anycast IP address, or just a few of them for redundancy. It will be even much more effective to protect them from cyber attacks that way. Cloudflare is an excellent example of how this can work.

Technically, there are plenty of technologies already available to share an IP address when providing one-way communication. We use Network Address Translation (NAT) at home or in small offices, proxies at larger organisations, and name-based virtual hosting for websites, to name a few.

We tend to classify IP addresses as static (yours forever) or dynamically allocated (yours for a limited time). However, we often don’t get an IP address assigned to us exclusively. We only temporarily make use of it, and possibly even share it with other remote peers simultaneously.

Cellular operators, for example, often implement Carrier-grade NAT (CGNAT) and make use of small IP address blocks to cater for a large active customer base.

Technically, they assign a pool of IP addresses available to them to a section of their network, and mobile users are only making use of an IP address to get access to the internet, the same as it was with a proxy, for example. The connection is strictly one-directional, there is no way an outside world IP address can initiate a link back to the mobile device using that address. This maintains robust security and reduces the number of public IP addresses required.

The downside, however, is that the old and widespread assumption that every single IP address has a single device behind it and therefore can be tracked down to an exact geographical location is not valid anymore!

Therefore, when we consider IP Geolocation, we must first consider how an IP address is being used.

Static IP addresses

A static IP address’s geolocation is the easiest to get right.

Regardless of the exact method that helps IP Geolocation providers to source their data, there is one common overarching principle. IP Geolocation is always evidence-based. It could be public RIR data, self-published geofeeds, actively sourced measurements or otherwise processed information or an end-user reported or otherwise obtained IP-location pairs.

Any way you put it, it is always about a piece of field evidence or at least a clue from data received. Not all evidence data is correct, it could be a way off, just like a faulty report of a GPS device’s location, for example. The quality of an IP geolocation service always relies on what data they have access to and how they handle it.

Therefore, when we’ve got a fresh, valid, and highly precise geographic location as a piece of evidence for a static IP address used by a stationary device – the resulting IP Geolocation accuracy can be scarily accurate – often up to a few meters away.

This is why BigDataCloud deliberately obscures the provided location coordinates slightly by rounding it up to the nearest kilometre — essentially capping the maximum accuracy down to within one square kilometre.

Hence, IP Geolocation is not suitable for identifying the exact location of a user.

Furthermore, it should not be as accurate as it can be because we must also respect the privacy of the IP address end-users.

Dynamically allocated IP addresses.

A dynamic IP address is an IP address that our Internet Service Provider (ISP) assigns to us temporarily.

The only noticeable difference between a static allocation and a dynamic one is that with the static one, we are promised that the address would not change as long as we maintain the contract. In case of a dynamic assignment, it may vary, as often as we reboot our router or even more, depending on the ISP’s policies.

Some ISPs could enforce address changes as often as every few hours and others let us have the same address for months even if we reboot our router occasionally.

The longer the same IP address remains at the same physical location, the better chance that an IP Geolocation service provider can pick it up and locate it as accurately as a static IP address.

But what happens if the IP address we’ve just got was spotted previously at another location? Yes, the IP geolocation results will be off. But, by how much? Let’s now turn to how this will affect the accuracy of the IP Geolocation.

A dynamic IP address usually comes from a Dynamic Host Configuration Protocol (DHCP) allocation. Just like we’ve got our home computer receiving a local private IP address from our home router using DHCP. There is also a router at our ISP’s network, which is responsible for our section of the system.

This router, in turn, has a pool of IP addresses it can allocate to customers. These IP addresses could be sequential, resembling a single network block, or even a list of several blocks. Sometimes these blocks can be as small as a single IP address. This is precisely why the IP geolocation data granularity is so important. The ‘perfect’ IP Geolocation service must support up to a single IP address granulation - just a side note.

Noticeably, the network router which is servicing us directly is essentially responsible for our section of the network, and most often this section resembles a very distinct geographical boundary - a service area.

Therefore, the maximum IP Geolocation error we should expect when using an IP address which was witnessed and noted somewhere else is the maximum distance from our physical location to the outermost end of the boundary of that area.

The service area or confidence area as we call it at BigDataCloud is a critically important piece of information which can tell us where else the IP address of interest can potentially be allocated if it was assigned dynamically. We must consider it if the resulting decision we make upon IP geolocation data is substantial.

Screenshot of maps showing the estimated point location and confidence area (service area) of the respective IP addresses generated usingBigDataCloud’s IP Geolocation API. You can check your IP address here.

For instance, if we grant or ban access to services or decide on a likelihood of e-commerce fraud, we should definitely include the service area in our considerations too. A location point estimation might not be enough as it is only an estimate which is usually based on the latest or the most likely (frequent) location for it.

Cellular networks

The IP address allocation by a cellular network operator can loosely resemble a fixed network, ISP dynamic allocation. However, there are at least three noticeable differences which can make IP Geolocation much more challenging for mobile networks.

The device behind an IP address is not necessarily a stationary one. We can sometimes drive several hundred kilometres and still be using the same cellular network assigned public IP address. We often do not have access to a full IP address, as we are only ‘riding on it’, sharing it with other, often very remote customers elsewhere. Cellular network operators can often consolidate several internal network sections giving them a shared internet access point with the same shared pool of IP addresses available. This can make the service areas for the cellular address blocks significantly bigger.

Therefore, what is the outcome we should expect from a ‘perfect’ IP Geolocation service for cellular originated IP addresses?

Unfortunately, even a theoretically ‘perfect’ IP Geolocation service can’t always estimate the correct, up to the moment location for every IP address on a cellular network

Even the cellular network operators themselves often don’t have this data in real-time. They may be able to tell better which customers are using which IP address, but not exactly where they are. Most likely, they cannot without digging deep into their internal logs.

Hence, as a first step, it would be beneficial for businesses if the IP geolocation providers could just indicate whether an IP address of interest belongs to a cellular block or not. A straightforward way of doing this is checking if the enterprise that services this IP address also operates a cellular network like Vodafone, AT&T etc. But this would not always be helpful because some of these companies run mixed services. Hence, we should be able to detect cellular networks regardless of the ASN announcing them.

The next critical point for IP geolocation services is the service area of a cellular network even though it can be a substantially large one. Some cellular operators can extend their allocation for the same pool of IP addresses to areas often as big as the whole country. This means that an IP address within the cellular network can be used by a mobile customer practically anywhere within the servicing country. Hence, it is critical to know this if we need to make an important business decision based on IP Geolocation.

Hosting

Another essential categorisation applicable to an IP address is to distinguish between those that are servicing a human-operated device directly, or just a middlebox server or a bot. At BigDataCloud, we tend to categorise these as Consumers and Hosting networks.

Hosting is the overarching term we use to describe all sorts of unattended computers such as those that usually run from data centers and also offices or private properties.

Hosting network IP addresses are essentially those which power public websites, mail servers, VPN services, TOR, proxy and many lawful and also malicious applications.

Residential proxy or VPN networks, for example, often reside on benevolent IP address blocks announced by ASNs which belong to legitimate ISPs or even cellular network operators. BigDataCloud also detects these and marks them as Hosting too.

Most of the Hosting IP addresses are static allocations.

Edge cases

There are some outliers with all the above cases, and the next sections define how IP Geolocation would be expected to handle these.

Roaming cellular

When we arrive in a foreign country and turn our roaming data on, we can find that, surprisingly, the websites we visit still recognise us as never leaving our home country. We can often continue using the same IP address even though we are thousands of miles away!

How is that possible? Most if not all mobile network operators worldwide tend to 'tunnel' their remote customers' traffic back to their home networks. This way, they can better control the billing of their super costly data services.

Technically, this is very similar to a VPN that tunnels our traffic back to our home networks.

It makes IP Geolocation extremely challenging for roaming customers. On top of a regular CGNAT where several scattered mobile customers can share the same IP address for their internet use, roaming will add a chance that some of these could be shared anywhere in the world.

What can we expect from a perfect IP Geolocation service in this case?

BigDataCloud is often able to recognise IP addresses used overseas. However, keeping in mind that there is a strong possibility that the same IP address is simultaneously allocated at the home country as well, we decide to ignore that data and report on the home country user's location instead.

VPN, TOR, PROXY and other anonymisers

We often see internet users taking extreme measures to mask their real IP addresses. There are zillions of services available out there to help them hide. Usually, these services are offered as a safer option to surf the internet, a very questionable claim, to say the least.

We can only wonder why people tend to trust a ‘no street address’ and ‘no phone number’ company listed on some remote island more than their home ISP for handling their private communication and data. These services are vastly overused in the free parts of the world.

Anyway, regardless of their motives, we must respect their choices. Even if it was possible to recover the real IP address and the current location of the user, we see IP Geolocation services often reporting on the estimated position of the middlebox IP address instead of the real end-user one.

Conclusion

IP Geolocation is categorically not suitable for tracking the exact geographical location of a person or device.
However, in the majority of cases, it can assuredly give crucial insights into the geographical area the IP address is being used.

The various supporting information such as the confidence area, network type and risk factors can make the IP Geolocation based upon business decisions very robust and trustworthy.

Also published at https://www.bigdatacloud.com/blog/how-accurate-can-ip-geolocation-get