Geofencing marketing is a growing sector of local advertising, and it has the results to support its growth. What was once mostly known for custom city Snapchat filters has now become a robust marketing technique to reach people with great specificity.
Geofencing marketing gives you the opportunity to reach people based on a device’s location, making it more reliable than social media advertising. (Though when paired together these can create a highly effective strategy.) Geofencing is ideal for many different industries and can be a highly effective complement to an existing strategy.
What’s Geofencing Marketing?
Also called direct-to-mobile location-based advertising, geofencing offers companies a highly targeted experience based on the device’s location. Geofencing marketing gives you the chance to market to those within an individual building, event location, or even competitor’s locations.
Instead of relying on more generic targeting through a city’s radio station, a billboard, or a local news station, geofencing supports highly efficient ad spend with little waste.
In order to create a geofencing campaign, companies set a digital geofence around the location you want to target. As soon as someone walks into the geofenced area, the geofencing service captures their mobile device ID. Companies can then use this data to serve their ads both while the user is within the location and up to 30 days after.
This offers a chance to retarget users with reminder ads, additional deals, and general awareness initiatives once they leave. This is important for a very simple reason: very few people are sold on the first try. Many in your target demographic need to be sold to multiple times, and retargeting increases the frequency and the likelihood of making a sale.
Different Types of Geofencing Ads
There a few different ways you can use geofencing advertising. One of the primary ways is through apps like ESPN, Weather.com, and various games. As long as users have location services turned on, you can reach them with this technology.
It’s also possible to serve geofenced ads in a web browser that have advertising space available. Think of this like Google Ads but with highly specific targeting and retargeting capabilities. This includes different ad sizes and formats.
Geofencing Marketing Isn’t Social Media Targeting
It’s tempting to think that geofencing is the same as targeting on social media, but they operate differently. Geofencing is based on a device’s current location, not zip code and user-generated location information. (Like a user’s city and state on their Facebook profile.)
Because of this, it can act as a primary paid advertising strategy for an event or local business launch while paid advertising acts as a supplemental asset.
Geofencing also provides foot traffic attribution, helping you determine where purchases originated. By tracking the foot traffic around the chosen location, brands can track an uptick in foot traffic.
While Facebook Ads offers specificity with consumer behaviors and interests in conjunction with location-based targeting, geofencing can offer the same benefits. Targeting an event will target those all interested in the event’s topic, offering the benefits of Facebook Ads with more efficient ad spend.
This isn’t to say Facebook Ads is unnecessary and a poor choice. In many instances, Facebook Ads will still offer a viable return on investment, but not when it comes to very specific geographical needs!
Geofencing Areas Aren’t Beacons
At first look, geofencing can seem similar to beacons, as they are both location-based marketing. Beacons transmit small amounts of data to devices up to 100 meters away using Bluetooth Low Energy. Beacons can also use nearby SMS phenomena to send a notification to those within the area. These devices are also less expensive than geofencing, as you only need to pay for the hardware instead of an ongoing platform payment.
So why do companies choose geofencing over beacons? With geofencing, there is no need to place the beacon in the desired location, which is ideal for organizations planning a trade show or a nationwide brand looking to target a specific city’s locations. Less on-site set up is typically ideal in these circumstances.
Beacons are also unable to serve ads to devices after they leave the location. Geofencing captures the device ID and offers remarketing capabilities to maximize your interaction with targeted consumers.
The Benefits of Locally-Focused Advertising
The most significant benefit of local advertising lies in how a brand’s ad spend is used. An ill-targeted campaign will target those not interested in the product or service, thus wasting the brand’s budget. This is particularly important for small businesses who have limited funds.
When you target the right audience through geofencing, you can experience a higher return on ad spend. The immediacy of the experience paired with the remarketing capabilities creates an ad many won’t be able to refuse.
Geofencing offers this benefit due to its specificity. Instead of targeting a zip code or a five-mile radius around an address, brands using geofencing can target down to specific buildings. Insurance companies can target around hospitals and large marketing centers, targeting those most likely to need their service.
The Best Industries for Using Geofencing in Marketing
Here’s the secret: geofencing marketing can be used for nearly every industry. It just needs to be done well. Geofencing works best for entities like:
- Trade shows
- Concert and sporting arenas
- Local businesses
- Vendor-heavy industries
Large brands can take advantage of these tactics as well in order to increase awareness around stores and cities they want to focus their marketing efforts on. If a restaurant chain is introducing a new menu item in their test market, they can run geofenced advertising to reach the test market only.
Many industries hold annual trade shows for exhibitors and buyers, making it an ideal place for targeting many people within your target audience. An exhibitor can use this to bring attendees to their booth to learn more about a new product, or the tradeshow sponsors can push ads for their latest product or service.
Concert and sporting arenas can run event-specific geofencing advertising to support merch sales, season ticket sales, or to bring attendees to the concessions stand during intermission. A local bar next to the arena can also use the same geofence to promote game-night deals.
Local businesses can see the most benefit from geofencing when they target a competitor’s location. A new upscale bar can target other restaurants in the area that their target customer is likely to frequent. (Another reason using beacons aren’t always an ideal choice!)
The wedding industry is another ideal industry for geofencing based on the array of vendors needed for each event. Vendors like photographers, wedding dress boutiques, venue locations, and caterers can all target within the wedding ecosystem. A small boutique can also target larger bridal chains instead of relying on word of mouth or other traditional marketing methods.
By using this marketing tactic, businesses in many different industries can better reach their target audience for results and limited waste in their budget.
Geofencing marketing for local advertising is one of the most effective ways to use a company’s ad spend. Both local and national companies with a local focus can benefit, as well as events like tradeshows. Using the benefits of geofencing with even a small paid media budget can support a successful marketing campaign by using specificity and creative advertising techniques.