What Is Geofencing Marketing? Definition, Techniques and Tips

By Indeed Editorial Team

Updated April 25, 2022 | Published June 15, 2021

Updated April 25, 2022

Published June 15, 2021

Geofencing marketing is an effective way for companies to connect with potential consumers through their mobile devices. With advances in GPS technology, geofencing is being used more effectively than ever today. In this article, we define geofencing marketing, describe how to use it, examine the benefits of this technique for your marketing team and provide tips for a successful geofencing campaign.

What is geofencing? 

In marketing, geofencing refers to setting a virtual boundary around a specific location so that you can target consumers when they enter that location. You can set boundaries around your own company to attract consumers or you can target a competitor’s location with your advertising.

Geofencing primarily relies on GPS, Bluetooth, IP addresses or WiFi technology to track the locations of the target demographic via smartphones. When someone with a mobile device enters the defined location, they may see local advertisements on the websites or apps they visit.

Related: 20 Ways To Start an Email

Who uses geofencing marketing?

Both brick-and-mortar stores in specific locations and online shops that sell location-based products can benefit from using geofencing. To help you better understand, consider the following companies and organizations that may use geofencing to target audiences:

  • Local restaurants and small businesses

  • Museums and community centers

  • Companies with local promotions

Related: What Is Geotargeting?

What are the benefits of geofencing?

Geofencing marketing offers many benefits to companies. Here are the most common benefits when you use this strategy:

Increased local sales

Since geofencing targets audiences within a specific location, using this technique to attract customers may increase local sales for your company. If you regularly update your advertisements to include promotions, new products or sales, local customers may choose to shop at your company more often because they have the most up-to-date information directly on their computer or mobile device. This is especially useful if you work for a small business and rely on local sales for most of your revenue.

Improved shopper loyalty

Another benefit of geofencing marketing is that it may improve brand loyalty. When customers regularly see advertisements for your business, they may be more likely to choose to shop there rather than at a business they don't recognize. Location-based deals may also make customers appreciate your company and the money they save when making purchases, which encourages them to continue shopping there in the future.

Optimized analytics and data

Analyzing data is a core element to running a successful geofencing campaign because it helps you understand the performance of your campaign and how potential customers react to it. This technique allows your company to gather location-based data about audiences and how they're responding to your targeted advertisements. With this data, you can better understand which promotions and types of advertisements work best.

Boosted customer engagement

Geofencing marketing may also help you boost the number of customers who engage with your advertisements by targeting their location-based interests and helping you refine your advertisements. With the data you can collect from how customers interact with your ads, you can decide on better ways to engage them and improve your marketing results. For example, if more customers visit your company's website when you advertise on social media websites than on apps, you might focus more on social media advertisements.

Targeted ads

High-quality, targeted ads are an important element of a successful geofencing campaign. Since you can create highly personalized ads for your target audience, you can build a strong brand presence in a specific geographical area. Basing your advertisements on a specific area also helps you determine shared interests among your audience and market to those similarities for improved outcomes.

Related: Marketing's Promotional Mix: Definition and How To Use It

How to use geofencing marketing

Here are the steps you can follow to help you run a successful geofencing campaign:

1. Define your location

After choosing your target market, decide where you're likely to find potential customers. With this information, determine where you want to place your geofencing to increase visibility among potential customers. You may choose an established boundary, like the borders of a state, or a point location, which can be a specific distance around your business.

2. Introduce exit and enter conditions

You can create exit and entrance conditions with marketing software that allows you to decide when to display advertisements to potential customers. Typically, these conditions trigger events, like showing location-based advertisements, when someone with an internet-enabled device enters the geofencing boundary. For example, you may design a push notification showing discounts or special promotions for customers within a certain distance of a store to encourage them to visit.

Exit conditions may also be beneficial to you because you can design ads that target customers for a certain amount of time after they leave the boundary. This helps your brand increase visibility and stay relevant to potential customers.

3. Combine geofencing with behavioral targeting

To increase the success of your geofencing campaign, consider combining location-based advertisements with behavioral targeting. This is often useful for companies that have audiences with specific interests, like art museums or candy stores, rather than companies that provide necessary services, like supermarkets and auto mechanics. You can use behavioral targeting through data collected from computers and mobile devices to display more personalized advertisements.

4. Design a geofencing ad

When creating a geofencing ad, consider using visuals like videos and pictures, colorful text and other design elements to get the attention of your target audience. Try to create copy that describes your company's offerings briefly and accurately with engaging phrases that encourage potential customers to visit your business. It's also useful to include a call to action that clearly shows potential customers the next step they can take to make a purchase that benefits them.

5. Analyze and optimize your campaign

It's important to analyze your ads regularly and refine them based on the data you collect to help you experience better results with your geofencing campaign. Consider metrics like visit rate, click-through rate and the cost-per-visit for your advertisements to determine what changes you can make to your campaign for improved outcomes. Try to examine various metrics to create an overall view of your geofencing campaign's performance rather than looking only at one metric for information.

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Tips for maximizing success in geofencing marketing

To help you use geofencing marketing to benefit your business, consider the following tips:

  • Create a quality call to action. The goal of geofencing marketing is typically to encourage customers to make a purchase from your store. To do this, create a call to action that motivates them to visit your store and buy something.

  • Respect customer privacy. Let your customers know how you accessed their information when advertising through their downloaded apps. This makes them comfortable, and they're more likely to invest in your brand.

  • Use the right tools. Use multiple tools to optimize your geofencing campaigns. Make the best use of the analytics you discover to help you assess and refine your marketing efforts.

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