Connecting With Local Customers: Understanding Geofencing Marketing

With marketing, it isn’t enough to just make high quality content – you also need to make sure that it reaches the right people at the right time. This can be difficult, as advertisers and business owners rarely have full control over how and when consumers see their ads. Yet there is a specific marketing technique that makes it much easier to deliver relevant content to potential customers at the ideal moment: geofencing marketing. It is a highly targeted form of marketing that, when used effectively, allows for greater personalization, attribution, and efficiency than other types of digital advertising.

What is Geofencing Marketing?  

Geofencing Marketing is a form of location-based marketing that allows brands to deliver more personalized and precisely targeted ads. Geofencing involves creating a zone around a specific geographical area using various technologies, including Wi-Fi, GPS, radio-frequency identification (RFID), and Bluetooth. When someone with a smartphone or mobile device enters this area, these triggers will send unique ads or push notifications. Geofencing is a unique method for local businesses to reach to customers and potential customers who are nearby and (likely) ready to buy. Also, since the technology that powers geofencing is compatible with 92% of U.S. smartphones, it has considerable reach compared to other digital ad formats.  

How Does It Work? 

Though it seems complicated at first glance, geofencing marketing is fairly straightforward once you have some experience with how the technology itself works. The basic outline for a geofencing marketing strategy goes like this: 

  • You create a geofence around a specific geographic location. 
  • You develop an ad campaign with that location in mind. 
  • When a user steps into your geofence, they are added to your advertising audience.
  • The user will then receive the ad content you’ve created, whether through in-app ads, display ads, search ads, or push notifications. 

When developing a geofencing marketing campaign, you need to be strategic about where you place your geofence. While the most obvious choice would be to place it near your business, you can place a fence nearly anywhere. This includes placing it around a competitor’s businesses or another unrelated business whose customers might need your services. Choosing the right location for your geofence is just as important to the success of a campaign as the quality of the ad content. Thankfully, the location targeting used in geofencing can be as specific as 1000 square feet, so it can be made as broad or narrow as deemed necessary. 

What Are Some Examples? 

Many popular businesses have used geofencing marketing to their advantage. Some notable examples include: 

  • Dunkin’ In celebration of National Doughnut Day, Dunkin’ created a Summer-themed Snapchat filter that you could only access at their store. 
  • Burger King – A creative use of geofencing, Burger King notably set up a 600-foot around McDonald’s restaurants. If customers entered the fence, they unlocked a deal for a one-cent Whopper burger on the Burger King app.
  • American Eagle – The clothing retailer set up geofences inside of outlet mall parking lots, offering potential customers notifications and promotions. It resulted in a threefold increase in purchases and a major boost to in-store foot traffic. 

Why Is Geofencing Marketing Effective? 

The precision of geofencing marketing gives it several advantages over many other digital ad formats. Some of these include: 

  • Enhance Local Sales – If you are looking to improve your local performance, you need to consider geofencing. Since it is a location-based system, you can target local customers in specific geographic regions, allowing you to get as specific as you need to be. 
  • Improved Personalization: Customers increasingly expect ads to be personalized and targeted towards them. Data gathered from a geofencing marketing campaign can help you develop content that more closely aligns your target audience’s preferences and needs. 
  • Better Attribution: It can be difficult to know for sure if your marketing or advertising efforts are bringing in customers, but if people are coming to you with the promotions offered in your geofencing campaign, you know that it’s working. 
  • Ad Spend Efficiency: Due to the location-based parameters of geofencing, you are able to connect with the audience who is most likely to be converted to sales. This means you won’t have to spend as much money trying to win over people who aren’t interested in your services.

An Ideal Tool For Reaching Local Audiences

Geofencing marketing isn’t perfect – there are examples of fences getting overwhelmed in big cities or just not working 100% properly. Still, the technology is constantly getting better, and with the wide range of benefits that businesses gain from this highly targeting form of marketing, it is something that businesses should consider when developing their marketing strategy. So if you are looking to build up your local customer base, look into geofencing marketing!

Mark Buckner
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Mark Buckner is a freelance writer and editor from Hammond, Indiana. A recent graduate of Purdue University Northwest, he has edited two books and written on topics ranging from social media to science fiction film. At this time, he is open to other freelance writing and editing opportunities.

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