Geofencing Marketing: What is It and How it Works

Geofencing Marketing – What is it?

Geofencing marketing or geofencing advertising is a location-based advertising strategy in which marketers create specific ad campaigns that will only be visible to the users if they are in a specific location. This specific location is referred to as the targeted area. The term geofence is the physical limitation or boundary of that targeted area. This location can be a city, zip code, mileage range, or county. 

The ad campaigns for geofence marketing are designed precisely for the people who are in the targeted area. For example, the people who live in Chicago have majorly different needs and requirements than the people living in Kansas city so you would need to create different campaigns for the people residing in both of these areas. 

How does Geofencing work?

The geofencing technology creates an invisible digital barrier or boundary that automatically targets consumers who exist inside the boundary. When you create an advertisement specifically for this geofenced location, it is only visible to the people inside the location. If a user travels to that targeted area, they may receive alerts or notifications about a brand’s current offers within that area, they would be able to see geofenced advertisements especially designed for the customer in that location. 

Geofencing in marketing and advertising limitations

The geofencing technology is a little bit technical and there is some room for errors. sometimes a device registers inside a geofence when, in fact, it isn’t. Other times it may be hard to measure a physical location.

The biggest limitation is that it wouldn’t appeal to a wide range of audiences and it wouldn’t increase your target market

Besides location issues, geofencing can at times spook the customers because of its location specificity. As soon as a customer enters a targeted location they are shown the geofenced ad, and if a user is not a previous customer, they might get spooked and consider it spam. Healthcare providers, accountants, and financial advisors, or any business that belongs to a sensitive industry should be particularly careful while implementing a geofencing marketing strategy. 

Above all, what marketers should take into account when developing a geofenced ad is the customer’s privacy. There’s precise and then there’s creepy. No one wants to feel like a business is stalking or tailing them or in some way is being invasive and using their personal information to create ads. 

How much does geofencing cost?

The cost depends on multiple factors like the media platforms like Facebook, Instagram, Google, or Snapchat. Snapchat allows you to create a location-based filter that is only accessible to people who are in a specific location. This filter can cost about $5 for 20,000 square feet of the targeted area. The other factors include the tools and the number and the size of geofences. 

Regardless, a typical geofenced ad can cost between $4-$14 CPM (cpm= cost per thousand impressions).

Advantages of Geofencing Marketing

Geofencing marketing is used by marketers who prefer quality over quantity. It helps you establish a strong brand presence in a specific area, so you can nurture these potential customers and convert them into paying ones. Here are some advantages of implementing a geofencing marketing strategy:

• It helps you target small but a very precise target market

It gives you a chance to connect with a smaller audience on a personal level and boost your brand’s image by showing your customers that they perfectly understand their needs. When potential customers see that you as a business understand the local features of the area like lifestyle, trends, and community, you create an impression in the customer’s mind which will increase the likelihood of them returning. 

• Your content will become precise and high quality

When your target customers would be so precise, you would be able to create content that will resonate with the customers more. Geofencing helps create precisely structured content aimed at a specific consumer base. 

• You would be able to reach the audience that is likely to buy your product

The geofencing efforts can help you target customers that are most likely to purchase your product or service. If you are a local store and your geofence marketing efforts target people within your vicinity, these customers might for sure convert. 

• Timely content delivery and cost-effective

If you have launched a new promotional campaign for your local customers, geofencing marketing is the perfect and the quickest way to get the word out about it. You can send out geofenced ads for a limited time offer at your local store and placing such ads is also relatively inexpensive.

Integrate Geofencing into Your Marketing Strategy

Location-based ads are perfect to generate traffic to your online or in-person stores. If you want to integrate geofencing in your marketing, here are a few steps for how you can do it:

• Find your ideal size for geofence

This depends on what kind of business you have. If it is a local store, you can set the geofence by mileage. 

• Know your audience

For you to create targeted location-based ads, you must understand your audience, so you can shape the content of that ad in a way that’ll appeal to them.

• Launch an actionable ad

Your ad campaign should be actionable, meaning it should encourage the viewer to take immediate action. You can advertise a limited-time promo code that’ll encourage customers to buy your product immediately. 

• Add an enticing CTA

Adding a CTA would be a cherry on top. It’ll further encourage viewers to take action and buy from your brand. You can add “shop now” or “buy now” to entice your targeted customers to buy your product.

Companies that use Geofencing Advertising

A few big companies have used geofencing advertising quite successfully. Starbucks uses it to send users to push notifications when they are near an outlet. Dunkin used a similar strategy. They even had Snapchat filters for National Donuts Day which were only accessible to people when they were near a Dunkin Donuts outlet. 

Even a hospital-like John Hopkins relies on geofencing. They used it to find people for jobs. They created ads for qualified newsfeeds and advertised different opportunities. This example shows that geofencing can be used for other purposes besides selling products. 

Bring Us Aboard 

Geofencing is a very effective but slightly tricky method of targeted advertising but you can take the help of our expert marketers. They’ll devise and implement an effective geofencing marketing strategy that will prove to be very effective for your business.