We know that targeting capabilities for certain marketing tactics have evolved at an almost alarming rate. About 10 years ago, smartphones were just coming to market. Now we are constantly on our phones, using them for everything from GPS to entertainment, to connecting socially.
So wouldn’t it make sense to target users directly via their phones? And taking this a step further, why not target them when they’re in a specific area?
In this article, we will cover everything you need to know about geofencing marketing and how it can benefit your business.
What is Geodata?
Before exploring how geofencing marketing works, it’s important to understand what geodata is and how it’s used. Geodata, or geospatial data, contains location or geographic information that is available in digital format. This information is typically stored in a geographic information system (GIS). Geodata can be accessed and viewed in a number of ways:
- Vector Data: Represented primarily as vertices or paths. Vector points are XY coordinates, and vector paths connect multiple coordinates to create polygons.
- Raster data: Represented using pixels or grid cells, which may also have a value attached. For example, raster files can illustrate changing geographic values such as elevations or temperatures.
- Geodatabase: Stores vector and raster data in a structured format, allowing mosaicking, versioning, etc. Esri databases are a popular example.
- Web Archives: Geodata used to serve geographic and location information through services such as GeoJSON, GeoRSS, and Web Mapping Services (WMS).
- Multitemporal Data: Not only does it include a geographic component, but also a temporal value attached to it. For example, climate and temperature data track changes over time and at specific locations. Other use cases include demographic trends, land use patterns, traffic, and more.
What is Geofencing Marketing?
Geofencing marketing is based on targeting people with internet-enabled devices within a predefined physical area. It is a form of online advertising that allows marketers to deliver location-based ads and content. This type of marketing is also known as location-based marketing or location-based advertising.
Geofencing marketing often leverages tools like SMS marketing and programmatic advertising. Push notifications are a popular medium for this type of marketing, sending pop-up messages to potential customers when they enter a geofenced location.
Ads can include text messages, social media ads, and in-app notifications. Additionally, geofencing can be used in strategies such as retargeting and to build a broad audience base.
How Does Geofencing Marketing Work?
A geofencing advertising strategy works by setting up virtual boundaries around a specific location, such as your business location. These boundaries track when someone with a mobile device enters them.
When someone crosses this virtual boundary, your geofencing marketing campaign sends a notification or mobile ad to their phone, promoting your local store, service, or product.
Geofencing relies on several technologies, including Wi-Fi, GPS, radio frequency identification (RFID), and Bluetooth.
Benefits of Geofencing Marketing
Geofencing marketing offers several benefits for your business. Here are four key takeaways:
Increase Local Traffic and Sales
Geofencing can help improve your local SEO strategy by giving your business more opportunities to appear in local searches when your audience is looking for products or services in your area. This can increase traffic to your physical store and sales.
Improving Results with Data-Driven Campaigns
Geofencing relies on data analysis, providing useful insights to optimize future campaigns. Plus, you can modify your campaigns in real-time. For example, if you notice that users are not responding to your promotions, you can investigate and adjust your strategy.
Personalizing Audience Experiences
One of the biggest benefits of geofencing is that it allows you to personalize your audience’s experience using data. You can tailor your messages to resonate with your target audience based on local demographic trends.
Measure and Optimize Performance
Geofencing provides real-time metrics such as ad impressions, conversion zone visits, and more. This makes it easy to measure success and adjust your strategy as needed.
Let’s say you notice that a product is more popular among a specific age group. You can use this information to personalize your messages and target your marketing toward that particular group, maximizing the impact of your campaigns.
Geofencing marketing is a powerful tool that combines location technology with advertising strategies to create a more personalized and effective experience.
Make your marketing more profitable
Finally, geofencing allows for much more cost-effective marketing campaigns. You don’t need to worry about spending money on advertising to people who aren’t even in your area, since you know that all of your marketing is focused on a specific geographic region.
As a result, you can be sure that every dollar you invest in your marketing campaigns is being used to reach people who are real potential customers. You’re not wasting your budget on people who have no chance of buying from your business.
This profitability increases even further when you add additional parameters, such as demographic data.
Types of geofencing you can use
If you want to implement geofencing in your business, it’s important to know the different types of strategies you can use. Here are seven tactics you can try:
1. Location segmentation
When you think of geofencing, this is probably the main tactic that comes to mind. Location targeting, also known as competitor targeting, involves directing your advertising to a specific location, often a competitor’s location.
For example, a sporting goods store could create a geofence around the locations of its competitor, such as Decathlon, to capture the attention of customers who visit that store. When those customers are near Decathlon, they will receive an ad promoting exclusive deals at the competing sporting goods store.
Location targeting is a great way to attract interested people to your business and away from your competition.
2. Segmentation by events
If you use event targeting in your geofencing marketing, you’ll set up a geofence around a location where an event is taking place. This geofence is activated for a scheduled period of time while the event is taking place.
Anyone who enters the area during the event will be added to an audience. You can then remarket to these leads up to 30 days after the event. Event targeting is great for industry events, job fairs, concerts, and more.
For example, a country-themed bar and restaurant might target people who attended country concerts at a local venue, knowing that they would likely be interested in their bar.
3. Addressable Geofencing
Addressable geofencing involves targeting people who live or work at a specific address. This option is ideal for B2B companies that want to reach decision makers at a specific company, or for businesses that have a list of customer addresses.
For example, an HVAC company might have a list of addresses from previous jobs. They could use that list to send promotional offers for annual maintenance to those people.
4. Keyword segmentation
Another geofencing marketing option is keyword targeting. This method involves targeting potential customers based on the content they read online. It’s an effective way to reach people interested in your industry.
For example, a cabinet supplier might select a list of keywords related to kitchen remodeling to show ads to people who have been searching for topics related to that topic.
5. Contextual segmentation by category
With contextual category targeting, you use geofencing marketing to target people based on the content they view online. You target topics or categories of information, and your ads are shown to people who are viewing that content.
6. Geo-optimized segmentation
As the name suggests, geo-optimized targeting involves reaching people in a specific geographic region, such as a zip code, city, state, or other similar delineation. This option is ideal for businesses that want to increase brand awareness in a broader region.
7. Retargeting on websites
To close this list of geofencing marketing types, let’s talk about website retargeting. This type of geofencing shows ads to people who have already visited your website with the goal of driving them to your physical store. These ads are ideal for attracting people who have already shown interest in your business.
Geofencing marketing is a highly effective tactic that allows for high personalization and precise targeting, leading to high levels of engagement and conversions. Because of its highly targeted approach, you don’t need to invest large amounts of money to get started. Marketers looking to increase traffic and sales at brick-and-mortar stores or events should consider geofencing as a critical tool.
