Have you ever experienced receiving a notification or a coupon for a nearby store or product just when you needed it? If so, you might have encountered geofencing marketing.
Geofencing marketing is a strategic approach that enables businesses to target prospective customers based on their location. By leveraging technologies such as GPS and radio frequency identifiers, companies can establish virtual boundaries around specific geographic areas and deliver tailored advertisements to individuals within those boundaries.
Through geofencing, you can engage with your target audience in various scenarios, including when they are exploring competitor stores, browsing your own online or offline establishment, or preparing to utilize your services. This location-based strategy enhances your ability to connect with potential customers at the right place and time.
Curious to know more about geofencing advertising? Keep reading as we dive into the details and cover everything you need to know.
What Does Geofencing Mean?
Geofencing refers to a location-based marketing tool that utilizes GPS technology to create a virtual boundary or geofence. When integrated with a mobile app, it enables the delivery of notifications or alerts to users based on their proximity to the designated geographic area.
What is Geofencing Marketing?
Geofencing marketing is a form of location-based marketing that utilizes GPS technology to establish a virtual boundary or geofence around a specific location. When users with smartphones enter or exit this geofence, it triggers targeted notifications or marketing campaigns.
To make the most of geofencing marketing, it is essential to recognize and understand the targeted audience and customize the notifications or ads accordingly. Companies can guarantee that the appropriate ads reach the right people at the correct time by following this method.
Segmentation in Geofencing Marketing: Dividing and Targeting Audiences
The segmentation of the geofencing market can be classified based on various factors:
- Fixed Geofencing
- Mobile Geofencing
- Cellular Network
- On cloud
- Transportation and Logistics
These segmentation categories help provide a comprehensive understanding of the different components, types, technologies, deployments, and verticals that exist within the geofencing market.
How Does Geofencing Marketing Work?
Geofencing marketing is a versatile marketing strategy that can be employed by businesses and brands of all sizes, catering to their specific requirements.
A geofence can be set up with a range of up to 1000 meters or as small as 200 meters, allowing for precise targeting within a defined geographic area. Geofencing marketing utilizes the concept of “hyper-local” location to engage with users in a highly targeted manner. Here’s a summary of how geofencing marketing works:
✅ Creation of a Geofence:
The company establishes a geofence around a specific area and designs an ad campaign tailored to that geofence.
✅ User Entry into the Geofenced Area:
When a user enters the geofenced area, they become part of the advertising audience.
✅ Delivery of Ads:
The company initiates the delivery of ads to the user through various channels such as notifications, in-app ads, or coupons.
✅ Ad Content:
A geofencing marketing campaign can include a variety of content, such as promotions, discounts, invitations, or simple greeting messages.
One of the advantages of geofencing marketing is the ability to schedule the appearance of ads. For example, if there is a significant increase in traffic during the evenings, the ads can be configured to appear during that time period on relevant apps and web pages, maximizing their impact and effectiveness.
3 Significant Benefits Of Geofencing Marketing
Geofencing marketing offers several advantages that can greatly benefit your business. Let’s explore three key benefits of geofencing advertising:
- Increased local foot traffic and boost sales
Utilizing geofencing can strengthen your local SEO approach, leading to greater recognition of your company in nearby searches when potential customers are searching for the goods and services you provide in their region. This heightened visibility can lead to more local customers discovering your business, ultimately driving foot traffic and boosting sales.
- Data-driven campaigns for improved marketing results
Analytics and data play a crucial role in geofencing marketing. This strategy relies on gathering and analyzing data to provide actionable insights for your marketing team or service provider. The real-time data provided by geofencing allows you to make informed decisions and refine your campaigns for better results.
You can measure various factors, including:
Ad impressions or views
Another advantage of geofencing marketing is the ability to make on-the-go modifications to your campaigns. If you observe that users are not responding to your promotions, you can investigate the underlying issues and make necessary adjustments. This could involve targeting a different area or adjusting the timing of your campaign.
- Enhanced personalization and targeted advertising
Geofencing marketing allows you to deliver relevant and targeted marketing messages to individuals based on their location. By recognizing the precise locations of your ideal customers, you can design your advertisements to fit their particular interests, needs, and requirements. This kind of personalization can greatly enhance the impact and efficacy of your marketing experiences, leading to greater engagement and a higher conversion rate.
- Enhanced audience personalization
Geofencing marketing has numerous benefits, like being able to personalize your communication to the intended audience. You can examine the individuals from your locality to figure out what kind of offers they respond to. Doing so affords you the opportunity to compose specific messages and advertisements that will resonate with those who are likely to use your services or purchase your items. This kind of customer-oriented marketing will allow you to make the most of your marketing efforts.
Ways To Integrate Geofencing Into Your Marketing Practice
Setting up geofencing in your marketing plan is simpler than you may think. All that is needed are a corresponding app and coordinates from GPS, and then you can take these simple measures to efficiently use geofencing.
- Conduct thorough research on your target audience
Understanding your target audience is crucial when it comes to geofencing marketing. By gaining insights into their preferences and behaviors, you can create a targeted area that drives maximum results. Utilize the data you currently have available, including customer reviews and social media interactions, to enhance the comprehension of your target audience.
- Define a focused geofencing boundary
It is essential to maintain a restricted and specific radius to guarantee that your geofencing strategy is successful. Reducing the boundaries will enable you to target the most pertinent customers with your promotional activities. Consider factors like the typical walking or driving distance in your area to determine the optimal radius for your geofencing boundary.
- Craft actionable and clear calls to action (CTAs)
A compelling call to action (CTA) is essential for driving user engagement and conversions. When implementing geofencing, make sure your CTAs are actionable, concise, and clearly communicate the desired action you want your audience to take. Whether it’s visiting your store, making a purchase, or redeeming a special offer, your CTAs should motivate users to take immediate action.
- Utilize all available targeting techniques
Geofencing marketing offers a range of targeting options that can enhance the effectiveness of your campaigns. Here are some key targeting techniques you can utilize:
- Context targeting:
This technique ensures that your ads are displayed alongside relevant content on web pages. For example, if there is a news article about local restaurants, your ad can be shown in proximity to that content.
- Content targeting:
By targeting specific keywords and understanding the intent behind them, you can align your ads with relevant searches. For instance, if someone searches for “restaurants with private dining areas,” you can tailor your content to showcase your offerings in that category.
This method enables you to exhibit ads to people who have shown earlier enthusiasm for your product or visited your website. By targeting these folks again, you can bring them back and raise the probability of achieving success.
Dayparting, a technique also referred to as ad scheduling, allows you to reach out to consumers at particular times throughout the day or week. For example, if the people you are trying to appeal to are most active during weekdays, you can customize your advertisements and promotional strategies to match this activity.
Geofencing marketing works in harmony with other digital marketing tools and strategies. It gives you important information about how your intended audience acts and what they like, helping you to adjust your marketing strategy. Knowing when your viewers are most responsive and forming your communication around this allows you to effectively interact with them after they have gone to your shop or interacted with your company.
Industry Sectors Experiencing Success With Geofencing Marketing
Various industries have recognized the potential of geofencing marketing and are leveraging it to enhance their marketing strategies. Let’s explore some of the verticals that are utilizing geofencing to maximize their marketing efforts:
- Geofencing for retail
Retail businesses can establish geofences within their store vicinity. Whenever a user enters the defined area, they receive location-based alerts, such as exclusive deals or promotions, enticing them to visit the store and make a purchase.
- Geofencing for legal services
Law firms and individual attorneys can utilize geofencing marketing to target specific areas of interest, such as jails, hospitals, or courts. By setting up geotargeting, they can efficiently reach their desired audience and generate leads, allowing them to focus on their daily legal activities with the support of the best legal software stack.
- Geofencing for real estate
Geofencing marketing presents excellent opportunities for the real estate industry. Real estate agents can create virtual boundaries around properties or specific locations. When potential buyers or onlookers enter or exit these boundaries, they receive notifications, providing them with relevant property information. This can significantly boost sales and conversions while helping agents filter out irrelevant leads.
Use cases of geofencing marketing
✅ Enhancing localized sales
Geofencing enables apps and marketers to precisely track and target users based on their location, allowing for more effective delivery of products and services. By utilizing this feature, marketers can refine their target audience and send tailored messages and notifications to boost localized sales.
✅ Driving foot traffic and increasing sales
Retail outlets and location-based businesses can utilize beacons in conjunction with geofencing to guide foot traffic toward popular sections within their premises. This powerful combination of geofencing and beacons can seamlessly attract and direct customers, leading to increased sales and footfall.
✅ Enhancing customer retention
Geofencing offers marketers the flexibility to leverage customer data and behavior to improve customer retention. By tracking shoppers’ past activities, marketers can send targeted notifications to users, such as personalized discounts, loyalty program incentives, exclusive member-only sales, and interactive games, effectively enticing them to return to the outlet and fostering customer loyalty.
✅ Collect feedback upon leaving the geofence
Marketers can engage with users who have exited the geofenced location by inviting them to provide feedback through various methods such as surveys, games, or offering coupons upon completion of a feedback form. This allows marketers to gather valuable insights about user experiences and make improvements accordingly.
✅ Social media integration
Geofencing marketing is a common tactic used by various social media networks such as Instagram, Facebook, Twitter, and Snapchat. With it, they can offer their users content that has been customized to their geographic location, deliver targeted advertisements, and provide filters that are exclusive to a designated region – which in turn improves their interaction and engagement.
✅ Optimize user experience through data analysis
Geofencing is a dynamic marketing approach that enables marketers to analyze user behavior within the geofenced area and their interactions with the app. The data collected can be utilized to offer personalized offers and services, resulting in an improved user experience. By leveraging geofencing insights, businesses can enhance their return on investment (ROI) and drive better outcomes for their outlets or establishments.
Brands that Have Leveraged Geofencing Marketing
✓ Dunkin’ Donuts
Snapchat collaborated with Dunkin’ Donuts on World Donut Day, offering a unique geo-filter that transformed users’ heads into donuts. This filter could only be unlocked when users were present at a Dunkin’ Donuts outlet. To further entice customers, Dunkin’ Donuts provided a complimentary donut with every coffee purchase made using the filter.
✓ Burger King vs. McDonald’s
Burger King executed a successful campaign called “Whopper Detour,” which involved placing a 600-foot geofence around McDonald’s restaurants. Burger King encouraged users to visit McDonald’s, and upon entering the geofenced area, they were offered a one-cent Whopper burger that could be unlocked through the Burger King app.
✓ American Eagle
In collaboration with the shopping app Shopkick, American Eagle utilized both beacon technology and geofencing to enhance their marketing efforts. They incentivized users by providing in-app coins for trying out products in the fitting room. This geofencing campaign played a significant role in tripling the revenue generated from their retail stores.
Walgreens, a prominent pharmacy chain, revolutionized its rewards and loyalty program using geofencing. By employing in-store beacons and implementing an aggressive geofencing marketing strategy, Walgreens captured the attention of its app users, directing them to its rewards program. The geofencing campaign showcased users’ current reward point balance, their journey toward reward milestones, and their available reward funds.
Determining The Cost Of A Geofencing Marketing Campaign
The expense of launching a geofencing marketing strategy can differ depending on certain aspects. As a rule, the cost is somewhere between $5 and $15 per one thousand views (CPM).
Several elements contribute to the overall cost, such as the volume of impressions, the features available on the integrated app, and other targeting options. The number and size of the geofences also play a role in the cost. Larger geofences tend to have a lower CPM due to higher impression volume.
Geofencing marketing campaigns are incorporated into base advertising campaigns, which can range from a few dollars to several thousand dollars, depending on the campaign’s scale and objectives. The campaign cost may be based on CPM per geofence or even cost per conversion, depending on the campaign goals.
The price of a geofencing marketing project may vary from only a few dollars to several thousand dollars.
Geofencing marketing is an immensely powerful technique that leads to enhanced client commitment and better conversion rates. After establishing and enacting it correctly, businesses are able to optimize the advantages of geofencing and take pleasure in amplified ROI. By deciding to use geofencing, businesses can gain a superior edge by directing accurate customers with the correct messages, in the precise place and right on time. Provided its great advantages, geofencing is undeniably one of the most effective approaches to target and involve users with their services or products.
Q: Does geofencing marketing rely on location accuracy?
A: The effectiveness of geofencing marketing is closely tied to location accuracy. It is crucial for businesses to accurately define the boundaries of the targeted area. Location accuracy depends on factors such as the quality of GPS signals, signal obstructions caused by objects or buildings, and the precision of geofence boundaries. Inaccuracies in any of these aspects can compromise the effectiveness of geofencing.
Q: Who can incorporate geofencing into their marketing strategy?
A: Geofencing can be adopted by businesses across various industries as part of their marketing mix. While retailers and restaurants are already leveraging geofencing, other sectors such as automotive, real estate, financial services, healthcare, and education can also benefit from this location-based marketing technique.
Q: Is it necessary to have an app for implementing geofencing marketing?
A: No, having an app is not a mandatory requirement for setting up geofencing marketing. Geofencing can be implemented using different platforms, including SMS, email, and push notifications. However, certain features or functionalities related to geofencing marketing may necessitate the use of an app on specific platforms.