Geofencing is a fantastic tool for businesses, big or small, aiming to ace location-based marketing. With smartphone users expected to hit 7,690 million by 2027, it’s prime time to jump on board if you haven’t yet. As advertising gets more costly, some marketing companies are using location-based data to create virtual perimeters, called geofences, in specific areas.
These boundaries help them target ads to people who are more likely to buy their products or services, saving money by not showing ads to those who probably won’t make a purchase.
But what exactly is geofencing? How is it used? And how can you set it up? While the technology isn’t new, its popularity is soaring, especially among smartphone users. This complete guide covers all you need to know about geofencing in 2023 and beyond.
What is Geofencing Marketing?
Geofencing marketing sets up digital borders around a place. When someone with a phone crosses these borders, they get a message advertising a store, brand, or product nearby.
It’s also called geofencing advertising. It helps companies target their likely customers better. Think about regular ads: they go out on TV, radio, and in papers, trying to reach everyone. But not everyone might be interested.
Geofencing is different. It lets marketers pick specific areas for their ads. They target nearby people who might shop there. This is smarter and cheaper than casting a wide net with ads that might not reach the right audience.
What is the Purpose of Geofencing?
Geofencing helps businesses track users accurately through apps and send alerts when a mobile device enters or leaves a certain place. It works even better with Bluetooth beacons, which send targeted messages to nearby phones.
These virtual “fences” around specific areas send targeted messages. Beacons can also make apps do specific tasks set by the owner.
These tools give advertisers a lot of chances. They create more personalized messages, boost engagement, and give better returns. A geofence can be as big as a whole city or as small as a building. They can even have different shapes, from simple circles to more complex polygons designed by marketers.
Geofencing in marketing is mainly used for location-based stuff like curbside pickup, app games, and more. When someone with a mobile app enters or leaves a specific area, they can get targeted messages or ads using things like Wi-Fi or GPS.
For instance, you might walk by a coffee shop and get a message on your phone saying, “Buy 1 Get 1 Free today!” Or a business might use geofencing around a rival shop to attract their customers with a better deal.
Geofencing not only sends nearby notifications to app users but also gives marketers useful location data. This helps them understand user behavior and surroundings, shaping their marketing plans better.
How Does Geofence Marketing Work?
Geofencing works in three main ways. First, there’s the centroid radius. This sets a distance around a place’s center point to send ads when someone with a phone gets close.
Next is walk or drive time, called an isochrone. It figures out how long it takes to reach a place from anywhere. Ads are sent only to those who can reach the business within a set time, making it about accessibility, not just distance.
Then there’s building footprints. This uses shapes to show exact boundaries, like a whole building or a store in a mall. Ads go to people who step inside, targeting those likely interested in buying.
What are the Benefits of Geofence Marketing
Geofence marketing brings several perks for businesses:
Increased Local Foot Traffic
Geofencing can boost how often your business appears in local online searches. When people in your area search for products or services like yours, it increases the chances of your business showing up.
For example, a local bakery like “Sweet Delights” used geofencing to appear more often in searches for “fresh pastries nearby.” This helped them attract more nearby customers, boosting their foot traffic and sales.
It’s like hitting the bullseye. You can aim your ads directly at people in specific areas. For instance, a restaurant can send offers to people nearby during lunchtime, tempting them with a discount when they’re most likely to grab a bite.
Businesses can aim ads directly at people in specific areas. The coffee giant Starbucks has effectively used geofencing to send targeted offers and promotions to customers when they are near their stores. Customers often receive notifications about new drinks or discounts as they pass by or enter the vicinity of a Starbucks location.
When you send tailored messages to people close by, they’re more likely to pay attention. Think about walking past a clothing store and getting a notification about a flash sale.
It grabs your attention because it’s relevant at that moment. Picture walking by a movie theater and receiving a notification about a special screening or discount.
This kind of targeted message encourages engagement because it’s timely and directly related to the user’s surroundings.
Target has successfully increased engagement by sending personalized offers to customers when they are near or within their stores, encouraging them to make purchases.
Instead of casting a wide net with ads that might miss the mark, geofencing focuses your spending where it matters most. For example, a local gym can target people within a certain radius, saving money by not advertising to folks too far away to visit regularly.
McDonald’s has optimized its ad spending by using geofencing to target potential customers near their locations, effectively using their budget to reach those most likely to convert.
Insightful Data Collection
Geofencing isn’t just about sending ads; it’s also a goldmine of data. Businesses can learn about customer behavior and preferences. For instance, retailers can see which locations draw more foot traffic, helping them plan better for new store openings.
Uber has leveraged geofencing to collect data for improving user experience and optimizing pickup and drop-off points based on real-time location insights.
Imagine visiting a theme park and receiving notifications for nearby attractions or shorter queue times through the park’s app. Geofencing can provide users with personalized experiences, enhancing customer satisfaction.
Sephora stands out in offering a personalized customer experience by sending tailored notifications about new products or events when customers are near their stores, enhancing their shopping experience.
Geofencing gives a business an edge over its competition. Imagine a store using a special tool to send tempting offers to people near their rival’s shop. This helps attract customers by offering something better, like discounts or deals.
So, it’s like a secret weapon for businesses to stand out and win over more customers. Picture a coffee shop using geofencing around its rival’s location to entice customers with a better offer. It’s a strategic move that can help a business stand out in a competitive market.
Geofence marketing is all about reaching the right people, at the right time, in the right place, making it a powerful tool for businesses aiming to boost their marketing game.
How to Implement Geofencing into Your Marketing Plan
Implementing geofencing in your marketing plan involves several key steps:
Research Your Target Audience
Understanding your audience is crucial. Use available data and social media interactions to grasp their interests. For instance, a local boutique can study customer feedback on social media to understand popular fashion trends.
Set Clear Goals
Define your objectives. Whether it’s boosting store visits or increasing app engagement, having clear goals shapes your geofencing strategy. For example, a retail store aims to increase foot traffic by sending offers to people nearby.
Choose the Right Tools
Select a reliable geofencing platform or software, like Gimbal or PlotProjects. These tools help set up virtual boundaries and send targeted messages. For instance, a restaurant uses a geofencing tool to send special menu updates to nearby customers.
Keep Geofencing Boundaries Small
Limit your geofencing area to a four to a five-minute radius around your business, considering whether people primarily walk or drive in your area. For instance, a café might set a smaller boundary if most customers in the city prefer walking.
Craft Clear and Actionable Calls to Action (CTAs)
Create specific and engaging CTAs in your ads to prompt action. Focus on inviting users rather than pushing sales. For instance, a restaurant can promote a new menu item by inviting users to try it rather than insisting on buying it immediately.
Utilize Various Targeting Techniques
Employ different targeting strategies to enhance your geofencing marketing:
- Context Targeting: Place ads relevant to content, like showcasing a restaurant ad beside a local food article.
- Content Targeting: Ensure your content matches popular search keywords to attract interested users. For instance, a hotel can optimize content for keywords like “best local accommodations.”
- Retargeting: Display ads to users who have previously visited your website, reminding them of products they viewed.
- Dayparting: Schedule ads at specific times based on your target audience’s activity. For instance, a fitness center may run promotions during peak workout hours.
Geofencing marketing aligns with your overall digital strategy, providing insights into audience behavior and enabling targeted marketing efforts post-store visits. It supports informed decision-making, helping businesses engage with their audience more effectively.
Also Read: Top 10 Digital Marketing Agencies
How to Track Your Geofencing Marketing Success
To gauge the success of your geofencing marketing campaigns, it’s crucial to track specific metrics that reflect their impact. Here are key metrics to consider:
- Impressions: This metric tallies how often your ads were sent out when someone with a mobile device crossed into your geofence boundaries. It’s a count of ad views, irrespective of whether they led to action.
- Reach: Unlike impressions, reach measures the unique mobile devices that entered your geofence boundaries. It doesn’t count multiple visits from the same device, giving a clearer picture of unique viewers.
- Visit Attribution: This metric tracks unique mobile devices that entered your geofence and how long they stayed within it. It’s beneficial for store-based geofences, showing how many visitors entered your stores, and indicating potential interest in making a purchase.
- Conversions: These denote actions prompted by your ads. It could be purchases, store visits, sign-ups for programs, or other actions influenced by your campaign.
- Cost per Acquisition (CPA): This metric calculates the campaign’s efficiency in turning consumers into customers. It’s computed by dividing the total campaign cost by the number of conversions. A lower CPA signifies higher campaign efficiency.
Monitoring these metrics helps evaluate the effectiveness of your geofencing campaigns, providing insights into their reach, engagement, and impact on driving consumer actions or sales.
Examples of Geofencing – Learn from the Best
Here are some examples of geofencing;
Burger King pulled off an ingenious geofencing move called the Whopper Detour. They offered their signature burger for just 1 cent—but there was a catch. Customers had to download the BK app and order through it at a McDonald’s restaurant.
Beforehand, Burger King gathered info on thousands of McDonald’s locations and set up geofences around each one. This triggered the special deal in their app when someone was at a McDonald’s. It’s seen as one of the best examples of “geo-conquesting.”
This gutsy move helped Burger King attract many customers from their rivals and got them loads of free publicity. It’s a clever use of geofencing to lure in customers from a competitor’s turf!
Vouchercloud’s geofencing strategy changed the game for deals on the high street. They were among the pioneers in using geofencing for marketing. Their app, powered by an advanced geofencing platform, sends targeted notifications to people near participating stores.
The app, with over 10 million downloads, partners with big brands like Prezzo, Papa Johns, and Hotel Chocolat. Thanks to geofencing, Vouchercloud ditches generic ads and offers. Instead, they achieve an impressive click-through rate of 45%.
By using geofencing, Vouchercloud transformed how they reach customers, making their offers more specific and relevant. This move has solidified Vouchercloud as one of the top examples in geofencing advertising.
Uber’s geofencing strategy at Los Angeles International Airport is a standout example. Geofencing became Uber’s solution when the airport restricted curbside pickups for taxis and ride-sharing services like Uber.
As passengers land and think about their ride home, the Uber app sends them a notification about available cars nearby. This clever move makes it super easy for travelers. They just need to head to a specific area near the airport, where an Uber car will be waiting.
This shows how geofencing helps businesses like Uber boost sales by setting up these virtual boundaries in the right places, offering customers exactly what they need at the perfect moment—like a ride as soon as they step off the plane.
Volvo showcased the power of geofencing in a remarkable marketing campaign at a New York dealership. During a 30-day trial, they attracted 500 potential customers to their website and enticed 132 people to visit their showroom.
Their marketing team strategically placed geofences around locations with high car-shopping activity, including rival dealerships. These virtual boundaries helped target users with banner ads when they were in these areas. Additionally, they set up a “conversion zone” around their dealership to track those who visited the showroom.
This savvy use of geofencing not only raised Volvo’s brand visibility but also reached customers actively shopping for luxury cars. By pinpointing potential buyers in key areas, Volvo tapped into a group already in the market for a vehicle, making their campaign highly effective.
Johns Hopkins Hospital
Johns Hopkins Hospital took an innovative approach to recruitment using geofencing marketing. They utilized this strategy to target specific individuals for job openings. Crafting social media ads tailored to qualified users, the hospital aimed to attract candidates for specialized roles, like pediatrics.
Their strategy involved targeting individuals with relevant experience, whether through Facebook or LinkedIn profiles. By leveraging geofencing, Johns Hopkins strategically displayed ads to these potential candidates, reaching out to them directly with job opportunities.
This approach proved highly effective, enabling the hospital to connect with valuable talent and successfully fill their job openings.
Starbucks harnesses geofencing to promote its drinks to interested customers. They send push notifications when users are near their stores, tempting them with specials to step inside.
An excellent example is their happy hour event, occurring on selected Thursdays from 2-7 p.m., offering a buy-one-get-one-free deal on any grande or larger drink.
During these happy hour events, users nearby receive special push notifications about Starbucks’ fantastic deals. It’s a clever strategy to attract customers. Starbucks also sends personalized app notifications.
For instance, if someone often orders a mocha Frappuccino, Starbucks sends a geofenced notification tempting them with the Frappuccino.
These tailored notifications encourage more customers to visit Starbucks. These geofencing strategies illustrate how using an app can effectively bring people into your business.
Geofencing marketing offers a great chance to connect with local customers and boost conversions. By offering personalized and timely deals, you can attract leads to your business. If you’re uncertain about diving into geofencing marketing, our team of experts is here to guide you. With solid experience, we specialize in designing geofencing campaigns that deliver impactful results.
What is geofencing marketing?
Geofencing marketing is a location-based strategy using virtual boundaries to target users within specific geographic areas. It delivers tailored ads, notifications, or offers to mobile devices when users enter or exit these predefined areas.
How does geofencing advertising work for businesses?
Geofencing advertising targets potential customers when they are in proximity to a business location. It sends targeted messages or ads to their mobile devices, enticing them to visit the store or engage with the brand.
What are the benefits of geofencing marketing for local businesses?
Geofencing marketing helps local businesses target nearby customers effectively. It increases foot traffic, enhances brand visibility, and drives conversions by delivering personalized offers or messages to users in specific locations.
How can geofencing marketing improve customer engagement?
By sending relevant and timely notifications or offers to users when they are near a business location, geofencing marketing grabs their attention, leading to higher engagement and interaction with the brand.
What are some effective strategies for voice-activated geofencing marketing?
Voice-activated geofencing involves optimizing ads or notifications to align with voice search queries. Strategies include tailoring content to commonly asked voice search questions about nearby services, deals, or directions.