By merely establishing virtual borders, geofencing technology enables businesses to target the most qualified audience. Ads or push alerts for a particular company are activated when target customers cross that barrier, luring potential customers to visit a storefront.
Though it sounds like something from a science fiction magazine, this technology is used daily by an increasing number of enterprises. Geofencing technology is used far beyond Facebook and PPC advertisements. However, how does it operate?
This article will examine geofencing technology and discuss its potential benefits for your company.
What is the technology of geofencing?
Geofencing technology is a location-based marketing tactic that tracks when a target client crosses a border using GPS signals. Companies can set up almost anywhere and draw boundaries around areas where they wish to focus on attracting customers close to their physical presence. With geofencing, businesses can target clients depending on the company’s location. It’s an incredibly detailed marketing technique.
Businesses typically install geofences around a particular company, event, or conference. It all depends on who the company wishes to reach. To give an example of geofencing in action, a company may send an automated text message whenever a potential customer enters the geofence.
You can set up a geofence around an event and target attendees with your ads, push notifications, or text messaging if a particular event draws people into your target market.
A geofence: what is it?
When a company uses geofencing technology, it indicates that it wants to target a specific audience within a given area. That barrier is made with GPS technology and is invisible. It’s easy to visualize as a fence because that’s how it appears on a GPS map!
How does geofencing technology work?
Geofencing technology establishes virtual barriers, or geofences, that target particular customers inside the designated area using GPS signals.
Customers are encouraged to attend a nearby business or event via advertisements, push notifications, or text messaging customized to their interests, displayed when they enter the geofence.
Four advantages of geofencing in marketing
The distinctions between geofence-based advertising and conventional marketing have already been briefly discussed. Let’s examine its four distinct benefits over the traditional approach in more detail.
1. Prompt
Geofencing advertising is provided practically instantly in reaction to a potential customer’s actions, and this is one reason why geofencing ads are frequently better than traditional ads. As a business owner, you can advertise without waiting for someone to read a newspaper or magazine or for them to be near a TV or radio at a particular time. You can begin marketing to them as soon as they cross your geofence.
Since they are near where they can purchase from you, now is a more appropriate time to connect with them. Put another way, you shouldn’t rely on people to recall your ads until they decide to shop near your store again.
2. Intended
The fact that geofences cover particular geographic areas is another benefit of using them for advertising. This enables marketers to place them where they anticipate their target audience to be present. In contrast, mass marketing is used across broad geographic areas, including nations, regions, and cities. That dramatically increases its potential to reach interested customers at random.
3. Cost-effective
Geofence marketing initiatives are also affordable because they may be set up in specific places. Mass advertising is costly because it requires a lot of resources to spread a message over a large geographic area. That and the idea that increased exposure is always preferable from its foundation.
However, when using geofences for marketing, you only have to pay for advertisements in the regions where you place them. Additionally, they can reach a far higher concentration of individuals who are more likely to become customers if implemented effectively.
4. Adaptable
Geofences can be tailored to your marketing strategy because of the various ways they can be constructed. To limit your advertising to customers inside your store, you can position them to cover the area immediately surrounding it or just the business’s property.
In order to let people know that your company is accessible, you can also post them in locations that are a specific transit time from your establishment or close to busy streets. To let customers know that your company is an option if they can’t locate what they’re looking for at the proper price, you may even place geofences close to rival businesses.
How to Incorporate Geofencing Into Your Advertising Plan
It’s simple to begin using geofencing: GPS coordinates and an app are all you need. Since not all customers can utilize this on their phone—at least not yet—as I previously indicated, ensure you properly notify your existing social media audience that you are now actively running geofencing promos.
Being proactive is essential when putting geofencing into practice. Before launching, take into account every standard component of your current marketing plan, such as the following:
Know Customer Demographics and Insights
Make sure you are aware of your target market’s demographics and geographic location before implementing geofencing marketing. This makes it easier to make sure that the promotions you employ will be the most effective and produce the desired outcomes.
Keep it close
Your geofencing area shouldn’t be huge. A four to five-minute travel radius is the standard. If most people in your city walk from point A to point B, you should aim to maintain a four- to five-minute walking radius; if most people drive, the maximum successful distance to be transported is four to five minutes.
Quick Reaction
Ensure your call to action (CTA) is prominent and demands quick attention. The idea is to use advertising to immediately draw customers to your business.
Observe privacy
Be open and honest with consumers who use mobile devices. Inform them of your access to their data, particularly if it comes from the app they use. Give them the self-assurance to engage with your location-based marketing and app, and make them feel at ease enough to come back later.
Methods of Targeting
With geofencing, you can use various targeting techniques, including retargeting, content targeting, day-parting, and context targeting. You can target and tailor different targeted audiences using these options.
Instruments and Data
Make your campaigns more efficient. You can optimize your geofencing using various technologies, and examining data will help you focus your efforts more effectively.
There are seven different kinds of geofencing that you can utilize.
It’s critical to understand the many kinds of geofencing available if you wish to apply them to your company. Here are seven strategies that you might employ:
- Site selection
- Targeting events
- Intelligent geo-fencing
- Focusing on keywords
- Contextual targeting by category
- Targeting based on geography
- Retargeting websites
To find out more about each, continue reading.
Location-based targeting
This is the method that is most frequently used when one thinks of geofencing. Targeting a specific location—typically a rival’s location—is the essence of location targeting, sometimes referred to as competitor targeting.
To target their clientele, a wedding dress company might, for instance, install a geofence around David’s Bridal shops. Those clients will see an advertisement for the other wedding dress company when they are near David’s Bridal.
Location targeting is one of the best ways to get customers to your business and keep competitors at bay.
Targeting events
Building a geofence around an event site is what happens when you utilize event targeting for your geofencing marketing. This geofence is configured to run throughout the designated period of the event.
During the event, anyone who enters the fence is added to the crowd. After the event, you have up to 30 days to remarket to these leads. Event targeting works well for concerts, job fairs, industry gatherings, and more.
Therefore, since they know those people would probably be interested in a country bar, a restaurant and bar with a country theme might attract those who have seen country performances at a nearby location.
Gesture that is addressable
Addressable geofencing focuses on those who are employed or reside at a specific address. This is a terrific choice for firms with a list of client addresses or for business-to-business (B2B) organizations wishing to advertise to decision-makers at a desired company.
For instance, an HVAC business can maintain a list of addresses from prior projects. They may send promotional offers for yearly maintenance to the individuals on that list.
Targeting keywords
Using keyword targeting is an additional geofencing marketing technique. Targeting potential clients with keywords refers to focusing on their online reading habits. With this method, you may effectively target those who are interested in your sector.
For instance, a cabinet supplier might use a list of terms associated with kitchen remodeling as a target to display advertisements to users who have been browsing through kitchen remodeling-related content. It’s a valuable approach to connect with potential customers who may be looking for your goods or services based on their search terms.
Contextual targeting by category
Using geofencing marketing, category contextual targeting allows you to target individuals based on the online content they have viewed. When you target subjects or informational categories, viewers of that content will see your advertisements.
Targeting based on location
Geo-optimized targeting, as the name suggests, focuses on connecting with individuals within a specific geographic region, such as a state, city, zip code, or equivalent. This is a beautiful alternative for businesses looking to expand their geographic reach in order to increase brand awareness.
Retargeting websites
Finally, let’s discuss website retargeting to conclude this list of geofencing marketing types. In an attempt to entice visitors to your physical business, this kind of geofencing shows advertisements to those who have already visited your website. These advertisements work wonders for drawing in customers who have previously expressed interest in your company.
How precise is geofencing?
GPS, cellphone, and Wi-Fi data are all combined by the technology to guarantee the highest level of accuracy for geofences. When cellular phone towers and Wi-Fi routers are widely dispersed, as in urban areas, geofencing accuracy can range from 100 to 200 meters.
Accuracy can reach several hundred meters in rural regions with fewer towers and Wi-Fi hotspots. Remember that geofencing functions well when Wi-Fi and GPS services are enabled on a smartphone.
What is the cost of geofencing technology?
Many companies quickly embrace this new marketing strategy, but one of their first concerns is, “How much does it cost?” It’s challenging to place a precise price on geofencing because it’s a more recent tactic on the market. Not to add, each organization is unique and typically bills for services at varying rates.
That being said, a few factors can assist you in estimating the cost of a geofencing campaign for your business.
How much money do you want to spend on advertisements a month?
You must choose the monthly ad spend amount if you want to employ PPC advertisements for your geofencing campaign. You will probably pay a lot less if you’re going to target long-tail, more particular keywords than you would if you wanted to target more general ones. This is due to the fact that broad keywords are concentrated considerably more, increasing competition and driving up cost per click.
Depending on your sector and competitors, a geofencing campaign should budget between $1000 and $10,000 per month for ads.
What is the number of your business locations?
The number of sites your company has might also affect the cost of your geofencing strategy. For instance, you would have to pay for each of the five primary franchise business locations you wish to use geofencing to drive leads. Having said that, a campaign is less expensive the fewer places it has.
How to monitor the effectiveness of your geofencing advertising initiatives
You should evaluate the effect of an advertising campaign in terms of how well it drives sales or other business objectives, regardless of whether it makes use of geofences. However, the method you employ to do so while utilizing geofences for marketing can change slightly from your usual approach. After all, even though the statistics you’re tracking are based on actual locations, some of them might be digital.
Here are some essential metrics to think about:
- Impressions: This is a simple tally of how many times a mobile device entered the perimeter of one (or more) of your geofences. Put otherwise, the number of times your advertisements were distributed is recorded, regardless of whether or not they were clicked on.
- Reach: This indicates how many distinct mobile devices entered the bounds of one or more of your geofences. With the exception of not counting multiple visits from the same person, it is comparable to impressions.
- Visit attribution: This counts the number of distinct mobile devices that traversed a geofence during a given time frame, as well as the duration of each device’s presence inside the geofence. You can view the number of visitors that actually accessed your stores and at least consider making a purchase, which is especially helpful if you’re employing geofences based on the building footprints of your businesses.
- Conversions: This indicates how many times viewers responded to one of your advertisements by taking an action. They will typically do that by making a purchase from your company, but there are other ways to gauge it as well. For instance, it may be as simple as entering one of your stores (visit attribution) or joining a rewards program or email list for your newsletter.
- Cost per acquisition: This gauges how well your marketing effort persuaded potential customers to sign up with your company. It is computed by dividing the campaign’s total cost by the total number of conversions received throughout the campaign. It would be preferable if this value were lower.
