Did you know that geofencing has been around since the early 1990s? Its origins started in the military where it was a tactic used in conjunction with GPS and GSM technology to monitor troop movements.
In the 2000s, the rise of mobile devices aided the expansion of this tactic to marketing, and today it can be a valuable resource to capture audiences at precise locations relevant to your business.
Geofencing utilizes location-based technology to create a virtual perimeter around a real-world area. When a wi-fi enabled device such as a smart phone or tablet enters into the perimeter, an action is triggered. In the case of marketing, that action is serving ads to the device. Depending on the campaign set up, these ads can continue to be served over a period of time, making geofencing a valuable resource for building and maintaining brand awareness throughout the buying cycle.
So how do you know if geofencing makes sense for your business? Let’s explore the pros and cons of geofencing uses in marketing and identify when geofencing could be a good fit for your media mix.
Pros of Geofencing Campaigns
The most obvious benefit to geofencing ads is that it allows us to target audiences based on a precise location which could include proximity to your business, attendance at a relevant event or even shoppers at a competitor’s store.
This location-based targeting allows advertisers to create personalized and relevant messages that resonate with the people in the predetermined area. For instance, a business that sells sun care products could geofence a local pool or beach, while a music venue could geofence an arena of concert attendees. A niche business needing to hire could geofence an industry trade show to serve recruitment ads to qualified professionals. A nursing home could fence hospitals and rehab facilities. In a nutshell, geofencing is an opportunity to relate to audiences in the moment with information relevant to their current experience.
Competitor targeting allows geofencing campaigns to serve ads at your competitors’ locations to an audience that is already in the market for your product or service. Should targeted audiences want more options or simply something different, your ads can communicate the strengths you have over competitors in the hope of driving their clients and customers in your direction.
And because geofencing ads can continue to be served over a period of time, businesses are able to use these campaigns to create and maintain top-of-mind awareness throughout the buying cycle and even after the sale is made, fostering repeat, loyal customers.
It is also worth noting that the conversion rate of geofencing campaigns is typically high, due to its ability to reach potential customers in a precise location that indicates they are already qualified buyers. These higher Click-Thru Rates (CTRs) can increase efficiency of your marketing budget.
Cons of Geofencing campaigns
Geofencing, like many forms of digital marketing, can raise privacy concerns as it tracks individuals through their mobile devices. This form of tracking can make some people uncomfortable, raising concerns about how this tracking data is used.
Another concern relates to an individual’s control over personal data, as many may not know how to adjust their settings to give or deny the sharing of information and location through their smart device. This unawareness can affect perceptions of served content, as audiences may not realize they have opted-in or agreed to receive such messages, adding suspicion and distrust.
With all things digital there is a chance for data breach and fraud. For consumers who have previously dealt with fraudulent attempts or identity theft, they may be closed off completely to receiving digital ads or have a high level of suspect that causes negative feelings about the brand.
Finally, setting up and maintaining a geofencing campaign takes time and knowledge that many business owners do not possess. And potential audiences have to approve location tracking in their settings in order to receive ads, which means some devices may not be enabled.
What Makes Geofencing a Good Fit?
Geofencing can bring big results for advertisers due to its ability to target audiences with relevant information in the moment and at a precise location. But what are some of the keys that make geofencing campaigns effective and a good fit for your business?
First off, consider your target areas carefully. For example, if you are looking to target potential customers in close proximity and drive them to your business, you might consider fencing an area that is within a 3-4 minute walk (for urban areas) and a 15-minute or less drive (for larger cities or towns).
A good geofencing campaign will have a strong call-to-action clearly stated in the ad, especially if your goal is conversions or high Click-Thru Rates (CTR). Whereas you can build brand awareness with ads that do not have a strong CTA simply by serving impressions, the real power of a geofencing campaign is conversions. If you don’t have a strong CTA, you may be better suited for a different kind of digital tactic.
If you are a small business with lots of big box competition, a geofencing campaign could allow you to harness the marketing budgets of your competitors who are driving traffic to their stores, where you can capture this audience and serve your own ads.
For any business that is able to hone in on their audience’s behaviors and habits, geofencing can allow you to reach them in relevant situations. For example, a sports memorabilia store might geofence a local sporting event, and a new clothing boutique might geofence an upscale salon or medical spa.
Like most marketing tactics, geofencing campaigns are enhanced when paired with additional marketing tactics. Because most audiences need to be reached multiple times before making a buying decision, the frequency of multiple messages across different formats can speed up the conversion timeline.
Do you think geofencing could be a beneficial add to your media mix? Vantage Consultants can get you started! We can help you identify the right targets, the right ad spend to achieve your goals and the right creative to resonate with your intended audience. Contact us today and let’s start building your fences!
