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The Ultimate Guide to Geofencing

See how geofencing can boost foot traffic, increase acquisition and retention, and help you better understand how customers behave in the physical world.

What is Geofencing?

At first glance, it seems pretty self-explanatory: geofencing is about creating virtual geographic fences around physical locations for more targeted mobile advertising.

Dig deeper, though, and you’ll find that geofencing is far more sophisticated and even more rewarding. It allows brands to understand how their customers behave in the physical world, how often they visit the neighborhoods where their stores are located, and how long they stay in those areas.

Geofencing

A Practical Definition of Geofencing

“Geofencing (also known as “mobile geofencing”) is the application of defining a set geographic perimeter around a location. Oftentimes the output of this method is to prompt an advertisement based on location data signals derived through a mobile phone. These alerts are triggered when a mobile device enters the radius around a pre-established point of interest on a map and users have opted into the app’s location services. Geofencing is most often used in advertising to send an ad to a user through an app. This can be in the form of a promotion, sale or a simple reminder to drop in. Marketers can even create a geofence around a competitor’s location so a customer will receive an ad when they get close to their store. This type of geofence is called geo-conquesting.”

All of this amounts to critical customer insight that can create a better advertising experience for your customers, and give your brand a competitive edge.

How Geofencing Creates Better Ads

Mobile currently represents more than two-thirds of all digital ad spending, and marketers continue to invest; in 2021, spending is expected to top $117 billion, eMarketer reports. Increasingly, brands are looking to geofencing technology to help them create more targeted and effective ads.

Geofencing isn’t particularly new, but as brands have evolved their mobile advertising strategies to better reach potential customers wherever they are, this marketing tool has become invaluable. By leveraging geolocation — the geographical location of devices connected to the Internet — geofencing allows marketers to create virtual boundaries around brick-and-mortar business locations (geofences), and deliver mobile ad messages when consumers enter them. The ultimate objective of geofencing is to provide value through mobile advertising — and one of the best ways to do that is by sending messages that are immediately useful to consumers.

WiFi and GPS are used to alert marketers when a mobile device enters the defined perimeter. The location data signals then trigger an email, text, app, or media ad notification. For the consumer, all of this results in some form of promotion, like a sale or a simple reminder to drop into a nearby store. The location-specific message is relevant to where the consumer is at that very moment, which enables your potential customer to take immediate action.

In short, with geofencing you can:

  • Target a hyper-specific area
  • Deliver relevant media
  • Eliminate waste by targeting specific areas
  • Reach customers in real-time

Geofencing in Action

Imagine your marketing goal is to increase foot traffic to your newest restaurant location. You can use geofencing to set up a boundary around the neighborhood in which your business is located. When consumers enter that virtual fence, you can serve them a mobile ad for your restaurant, along with your address and an exclusive offer or limited-time discount. You can even encourage users to download your mobile app and peruse your menu or additional deals.

Whether you’re launching a new menu item, promoting a seasonal special, trying to increase your lunch business, or simply trying to expose more locals to your restaurant, geofencing empowers you to achieve your mobile marketing objectives. Its value extends to retailers, big box chains and department stores, coffee shops, grocery chains, and virtually any kind of physical business. Setting up a geofence around the boundaries of a mall, for example, can be useful when you want to attract customers to a sidewalk sale or alert them to a new store opening. Once mobile users enter your predetermined boundary, you can serve them that targeted messaging.

The Role of Geofencing in Conquesting

The advantages of geofencing aren’t limited to brand and product promotion. This same technology can also be used to create a geofence around a competitor, so that a customer receives an ad for your business when they get close to your competitor’s store.

The objective here is to persuade them to come to your business rather than go to a rival’s. If a customer is nearing a competing clothing retailer, for example, you can serve them a product coupon for your store and remind them that it, too, is just steps away. This type of geofencing, is an ideal way to drive foot traffic to your business.

Geofence Radial Targeting

Geofences can either be dynamically generated around a point location, or applied using a predefined set of boundaries. Accuracy is vital when it comes to all forms of geofencing. But not all geofencing is created equal.

Radial Targeting, perhaps the most common form of this technology, can only be precise if the address around which you create your circular radius is accurate as well. Something to note about radial targeting is that it requires the user to activate their location settings. Research shows 74% of consumers said they’d be more inclined to share their location data if they could control how it was being used, while 70% say they’d need clear information on why they’re being asked for their location and what they stand to gain from sharing it.

The Future of Geofencing

What does the future of geofencing hold for marketers? Watch for increased personalization. One of the key advantages of this technology is that it facilitates the creation of customized ads built around consumers’ immediate circumstances. When a consumer crosses the virtual boundary, the opportunity to personalize ad messaging begins. Studies show that 63% of consumers now expect personalization when they receive special offers, so it’s important to customize yours.

The ability to cater your messaging to your audience’s real-time needs

  • by offering discounts and promotions related to their physical location
  • is invaluable when it comes to providing a valuable digital marketing experience.

The more that marketers tailor their call to action for consumers, the better your chance of boosting acquisition and retention while also building brand loyalty and affinity.

Creating a Mobile Marketing Blueprint

At GroundTruth, geofencing takes the form of our proprietary Blueprints platform, which maps the real world in a virtual environment with maximum accuracy and precision. Blueprints is the foundation of all products and tactics developed at GroundTruth, and the means through which we’re able to provide context to the location data received in an ad-request for the purposes of audience profiling and attribution.

Our geofencing technology validates the accuracy of location boundaries with a high degree of confidence. In fact, it’s much more accurate at defining business boundaries and polygons (think store walls, parking lots, shopping centers, and other points of interest) than other industry solutions that use radius fences around a business.

In other words, the accuracy of our Blueprints can help you reach key audiences with precision to create far more effective mobile campaigns. Learn more about our geofencing marketing platform and contact us by filling out the form below to get started.

Evelyn Aguilera
Associate Director, Brand Strategy