Geofencing marketing is an excellent way to market your business to more local shoppers using hyper-relevant ads based on the location. This process targets internet-capable devices within the particular area virtually fenced by the business. When a customer travels into these particular areas, they will receive messages or notifications about the latest deals, limited-time offers, and special events set by the brand.

There is a growing demand for geofencing marketing services as businesses do not always have the resources and expertise to perform the necessary geofencing activities. However, before you jump on the bandwagon, you should get familiar with the concept of geofencing and how you can incorporate it into your marketing strategy.

What is Geofencing?

Geofencing is a location-based technology that allows businesses and enterprises to create virtual boundaries around specific zones or locations, allowing them to trigger a pre-programmed action when people enter or exit the zone. This technology uses radio frequency identification (RFID), GPS, Wi-Fi, or cellular data to trigger targeted marketing actions, such as app notifications, personalized messages, or ads when a mobile user enters or exits a geofenced area.

Benefits of Geofencing

Over the years, businesses have used geofencing marketing to their advantage and propelled their growth. You can also benefit from this marketing strategy in the following ways.

Precisely Targeted Marketing

When you keep the geofence small, you are able to connect with the local audience on a personal level. With personalized messages based on the local lifestyle, community, and topics relevant to the area, you create a stronger impression on your potential customers.

Cost-Effective Strategy

You can set up an effective geofencing marketing campaign using the Google AdWords Platform. At no extra cost, you can set location-based parameters for your business listings and paid ads once you have established your geofence.

Timely Delivery of High-Quality Content

When you cast your geofence on the targeted area, you can focus on constructing highly personalized content that will resonate with a specific consumer base. By triggering this message at the right time, you can make the most of the opportunity. Your continuous geofencing marketing efforts can improve your brand’s local following and credibility.

How does Geofencing marketing work?

There are three different ways to create geofences.

I. Centroid Radius

In this method, you need to locate the center point of your preferred area (property or building) and then calculate the radius. By creating a general proximity zone, you can send out ads whenever someone with a mobile device gets close to the area.

II. Isochrone

This method involves calculating the amount of time it may take to get to a particular point from a different location using the preferred transportation methods. You can send out ads to specific users who can travel to your place of business within a specified time frame. Instead of focusing on how close the users are, this method triggers actions based on how easily they can reach your business.

III. Measured Polygons

You can use a measured polygon to represent the exact physical boundary of your preferred area. It can be a park, a building, a mall, or a store unit. Once the geofencing is properly established, you can send personalized notifications to people who set foot inside the property. This helps you precisely target the audience who are signaling an intent to buy products or services from your business.

Geofencing vs Geotargeting vs Geolocation

While the words geofencing, geotargeting, and geolocation sound quite similar, they are not exactly the same things. However, they are connected in some way or the other.

With geolocation, you can determine the geographic location of a user’s device using GPS, cell tower triangulation, IP address location, and more. Geofencing can be defined as an extension of geolocation. After determining the geolocation of a mobile device, businesses can use geofencing to make sure that the devices outside the geofenced area are denied access.

Geotargeting is the process of using a person’s current location and additional data to personalize the ads or notifications they receive on the mobile device. This advertising strategy is often more effective than geofencing, as the users need to meet more detailed criteria before seeing an ad. While geofencing offers a hyper-relevant ad experience using location-related data, geotargeting offers a more personalized ad experience based on location, behaviors, interests, and demographics.

Examples of Geofencing Marketing

As geofencing becomes more mainstream with each passing year, businesses across various industries are using it to their advantage. Check out how some of the major companies in the world have used geofencing marketing to drive success.

1. Coca-Cola and Their Vending Machines

More than one-third of all Coca-Cola vending machines are connected to the internet. The company has started integrating facial recognition and payment tracking tools in its vending machines, turning them into valuable data streams for Coca-Cola. The company has done it using a unique geofencing strategy to fine-tune the supply chain and encourage more potential customers to use their vending machines.

2. Sephora and Their Instant Digital Assistants

Instead of targeting potential customers near their store locations, the Sephora companion app launches as the customer enters the store. This app contains the user's purchase history, details about current offers, exclusive deals, and the availability of the wish-listed items for that location. By streamlining the shopping experience, Sephora encourages customers to make additional purchases. As soon as a user crosses into a geofenced area, the geofencing technology built into the app will notify the users about the unspent gift card balances.

3. Burger King’s and “Whopper Detours”

Burger King’s Whopper Detour campaign involved setting up 600-foot geofences around McDonald’s locations. The company then encouraged their followers on social media to visit McDonald’s. However, as soon as a user with the Burger King app on their phone crossed into the geofences around a McDonald’s store, the app would send a notification offering Whopper at one cent from the closest Burger King. This strategy made a lot of users cancel their plans to go to McDonald’s and visit Burger King instead.

How You Should Use Geofencing in Your Marketing Strategy?

Geofencing is not just for large enterprises. Even the small local businesses can use it to their advantage. Here are some effective ways to use geofencing marketing to create brand awareness and increase the credibility of your business among the local audience.

1. Develop an Ad Copy for the Audience

In order to run a successful geofencing marketing strategy, you need ad copy that resonates with your audience. These geofencing ads will help you catch the attention of your target audience and get them to engage. Make sure that your ad copy is relevant to your audience. Unless they can connect with the ad content, they won’t engage.

2. Pick the Right Location for Geofences

Next, you need to find the right place for your geofences where you can capture qualified leads. The location plays a crucial role in the success of your geofencing marketing strategy. Do some market surveys and determine where your target audience spends most of their time before visiting your business. This is why Uber targets people with geofencing marketing near hotels and airports. Moreover, you can strengthen geofencing by combining it with programmatic advertising, which automates ad delivery. This automated system delivers ads to targeted audiences while they browse websites that host your ads. For example, a local gym could target people near competitor fitness centers and, through programmatic displays, serve personalized ads to them across their frequently visited websites in real time.

3. Keep It Small

Besides finding the right location, you also need to determine the right size for the fences. If your geofence is too large, it may take a significant amount of time for the customer to reach your business after seeing your ad. The ideal fence size should not be more than a four- to five-minute walk from your business location. Setting up a smaller geofence improves your chances of successful lead acquisition.

When you make an exciting offer or provide a special deal to your audience, they are more likely to take advantage of the opportunity when it is close by. On the other hand, if the location of the business is a 20-minute drive away, people are less likely to visit.

4. Don’t Target with Ads 24/7

Targeting your audience with ads all hours of the day does not make much sense. Ads that run at late hours do not perform well since people sleep during that time. Thus, it is important that you get the timing right while setting up geofences for your business. Consider showing ads when your business remains open. You should not run geofencing ads during a time when people cannot visit your business.

5. Add a Compelling CTA

A call to action (CTA) helps the audience decide what they should do next. It is recommended that you create CTAs that clearly tell the audience what they can expect after performing the said action. For instance, a CTA like “Visit the store for a flat 50% discount” clearly tells the audience what happens when someone visits your business. On the other hand, generic CTAs like “Download the App” or “Order Online” do not seem compelling enough.

Conclusion

Adding geofencing to your marketing strategy can do wonders for your business. Whether your goal is to draw attention away from your competitors or want to give your customers a better shopping experience at your store - geofencing can help you achieve that goal. However, you need to research and understand your target audience. If your marketing strategy does not resonate with the local audience, all your efforts and investments will be for nothing.