Beyond the Hype: Is Geofencing the Right Strategy for Your Brand?
October 24th, 2023 by
Key Insights
- While geofencing offers the unique advantage of targeting potential customers within a specific geographic range, it doesn’t guarantee ROI.
- Geofencing holds the potential to drive impactful results by targeting specific geographic locations, but its effectiveness varies based on a brand’s goals and audience.
- Geofencing is a potent tool that works best in conjunction with a broader marketing strategy — a strategy that incorporates multiple forms of online advertising and keeps the audience at the center.
Marketers around the globe are touting geofencing as the new golden child of online advertising.
While geofencing’s ability to target potential customers in a specific geographic radius makes it a worthwhile tool, it’s not a magic wand you can use to guarantee ROI.
The strategy behind its use is more important than any tool.
Targeting the right audience is the most critical tactic to pursue, whether that includes geofencing or traditional PPC ads.
In this blog post, we will go beyond the hype and help you determine when to use geofencing ads.
How Do Geofencing Ad Campaigns Work?
Patented in 1995 by American inventor Michael Dimino, geofencing allows businesses to advertise directly to mobile users within a targeted geographic radius.
Since then, the success of geofencing has become evident. 95% of companies worldwide use some variation of geofence marketing in their online advertising campaigns.
The power of geofencing is its ability to engage potential customers based on their location in real time — offering marketers a highly targeted advertising approach.
This is advanced, exciting stuff!
The nitty-gritty of how it works is even more interesting.
Geofencing ads use GPS, Wi-Fi, and cellular data to determine a user’s location — all with varying levels of accuracy.
Marketers use software to set up geofenced areas, ranging from broad (a neighborhood) to very specific (inside a store).
When a user crosses a geofenced area, they trigger specific actions, such as being sent a push notification, text message, or an ad within an app. These conversion opportunities all have the potential to turn a prospect into a customer.
Geofencing Example
Say you’re a local pizza shop in Downtown NOLA trying to attract more customers on a Saints football Sunday.
While people might not have traveled Downtown to grab a quick slice from your shop, they will undoubtedly be hungry after the game.
You can use geofencing ads to target the area outside the Superdome. Once the user steps outside the Dome, they will be targeted with ads about your delicious za only being a 10-minute walk away.
In scenarios like this, geofencing should be your go-to digital advertising strategy — like pizza is your go-to meal after the big game.
The Benefits of Geofencing Ad Campaigns
Geofencing ads offer many unique benefits that marketers can utilize as part of a broader digital marketing campaign, including:
- Hyper-Localized Targeting: Allows businesses to target customers within a particular geographic area, even as precisely as a single building.
- Real-Time Engagement: Provides the ability to engage consumers as they enter, leave, or linger in the geofenced area, offering timely and relevant promotions or messages.
- Increased Foot Traffic: Drives customers to physical locations, such as retail stores or events.
- Contextual Relevance: Brands can create highly relevant and contextual promotions, deals, or alerts based on a user’s location.
- Personalization: The ability to tailor messages to individual user behavior, enhancing the user experience and increasing the likelihood of engagement.
- Improved Data Collection: Geofencing allows businesses to collect valuable data on consumer behavior, such as how often they visit a location. Pro tip: Use this data for your future targeting and strategy.
- Highly Measurable: Provides in-depth analytics to measure campaign effectiveness, including visit frequency, dwell time, and conversion rates.
At this point, you might be thinking, “Wow! Geofencing ads cover all the bases necessary for a successful digital marketing campaign. Why would I use anything else?”
While your excitement is warranted, it’s still important to remember that the digital marketing world is home to many valuable types of ads.
Let’s learn about them and see how they compare to geofencing ads.
Comparing Geofencing Ads vs. Typical Display Targeting vs. “Traditional” PPC/Paid Search Ads
Online advertisement variations are tools. No one type of ad is better than another because they each serve a unique purpose.
In the same way sandals are better for a beach day, and tennis shoes are better for a jog — each shoe has its specific use. Your ability to choose the right one is what optimizes your experience.
Not one is better than the other — they’re just different.
How they differ in their approach
- Geofencing Ads: Most often used in display ad targeting, geofencing ads focus on a specific geographic location, targeting users within a particular area to drive actions like store visits, event attendance, or online conversions.
- Typical Display Ad Targeting: Operates on a broader scale, focusing on demographics, interests, and behaviors to reach a broad but relevant audience.
- Traditional PPC/Paid Search Ads: Focus on search intent or behavior-based angles, aiming to capture users already interested in a service, product, or topic.
How they differ in their reach
- Geofencing Ads: Limited to a specific geographic area or individual locations, such as a single building or street. The audience is inherently localized.
- Typical Display Ad Targeting: Designed for flexibility, these ads can be cast wide or narrowed down based on various factors like demographics, interests, and behaviors. While they can target specific locations, they are not restricted by it, giving advertisers the freedom to reach audiences across regions, countries, or even continents.
- Traditional PPC/Paid Search Ads: Have the potential for a broader, even global reach, depending on campaign settings.
How their overall goals differ
- Geofencing Ads: Primarily aim to drive real-world actions, such as increasing foot traffic to a physical location, engaging attendees at an event, or capturing consumers near a competitor’s site (geo-conquesting).
- Typical Display Ad Targeting: These ads balance raising brand awareness and prompting specific user actions. While they can drive real-world interactions, their strength lies in reaching users across various digital touchpoints, aiming to increase brand visibility and online engagement.
- Traditional PPC/Paid Search Ads: Typically aim to drive online actions, such as website visits, form submissions, or online sales, although you can also use them for local business promotion.
Most Successful Geofencing Targets
Geofencing ads work best in a largely populated city or when your brand has many locations or has a lot of foot traffic (such as a pizza shop with multiple locations in a city’s business district).
This is where geofencing ads shine because you can use them to capture potential customers near your business location — even if unintentionally.
Some examples of popular places to target using geofencing ads include:
- Airports
- Near competitor locations
- Near schools for child-friendly activities (like visiting the zoo)
- Near events (sporting events, concerts, business seminars)
- Near universities
The powers of geofencing are also best used when your other targeting options are limited.
For example, Facebook has policies so you cannot target people based on housing. This has made it difficult for real estate companies and housing communities to target users on the platform. To mitigate these limitations, you can run geofencing display campaigns around competitors to help reach this audience.
Limitations and Challenges of Geofencing Ad Campaigns
While geofencing can be highly effective, it might not always be the best move for your business.
Limitations and challenges of geofencing ads include:
- Accuracy and Precision: While GPS technology is generally accurate, it’s not perfect. Buildings, lousy weather, and other physical obstructions can affect the accuracy of location data.
- Privacy Concerns: Collecting and using location-based data raises concerns about user privacy. Brands need to be transparent and comply with data protection regulations.
- User Opt-in Required: For geofencing to work, users must opt-in to location services for the particular app pushing the ad. This limits the pool of potential recipients.
- Limited Reach: Geofencing is a hyper-local strategy targeting users within a defined geographic area. This can limit businesses with a more diverse or widespread audience.
- Platform and Device Limitations: Not all devices support geofencing, and there may be variability in how different mobile operating systems interact with geofencing technology.
- Scalability: While geofencing can be effective for local campaigns, it may not be easily scalable for national or global marketing initiatives.
All expert marketers know the key to a successful campaign is targeting the right audience, not just the nearest audience. Your best customers could live on the other side of town.
It would be a waste to lose out on those potential sales, right?
The Importance of Audience Analysis
In any online advertising campaign, the need for audience analysis is paramount to success.
Creating a target based on audience behavior, needs, or preferences allows you to build a more personalized and effective strategy than focusing only on where your audience is located.
When you only use geofencing ads, you’re actually doing the ads themselves a disservice.
Geofencing ads are a team player — they work best when woven into a broader marketing strategy that keeps the audience at the center.
Integrating Geofencing into a Broader Marketing Strategy
In today’s marketing landscape, brands need more than just a single tactic to make a lasting impact. Geofencing, while powerful, is just one tool in a marketer’s arsenal. To truly resonate with audiences and cultivate memorable brand experiences, it’s crucial to weave geofencing into a holistic marketing approach.
Here are some strategies to consider when integrating geofencing into your overarching marketing blueprint:
- Multi-Channel Synergy: Utilize geofencing as a complementary tactic alongside other display targeting, as well as other marketing channels like social media, email, and paid search, to create a seamless brand experience.
- Consumer Journey Mapping: Integrate geofencing touchpoints into your overall consumer journey map to ensure that you’re reaching people at the right time and place.
- Timing and Frequency: Align the timing of your geofencing ads with other marketing campaigns to maximize their impact.
An example of geofencing integration in a broader marketing strategy
When skilled marketing professionals use different variations of online advertising in tandem, the result is a return on investment for clients.
Search Influence recently integrated a geofencing campaign with a Facebook ads campaign for our longtime higher education marketing collaborator Tulane SoPA’s Fall 2023 Grad Fair.
To help boost enrollment in Tulane SoPA’s graduate programs, we put a geofence around other undergrad schools in hopes of capturing interesting students who might want to go to grad school once they finish undergrad.
Once people became aware of the programs via the geofence campaign, we utilized Facebook event ads to get them to respond whether or not they were interested in attending the Fall Grad Fair.
After this, we created a Facebook conversion campaign to remarket to those who responded to the event ads.
Geofencing Ad Campaigns FAQs
What’s the difference between geofencing and geotargeting?
Geofencing involves setting up virtual boundaries around a specific location, allowing marketers to target users when they enter, exit, or spend time within these boundaries.
Geotargeting refers to delivering content or ads to users based on broader geographical locations, like cities, regions, or countries, often leveraging criteria like user preferences, demographics, or search behavior in tandem with their location.
Is there a minimum or maximum area that can be geofenced?
Geofencing can be incredibly precise, targeting areas as small as a specific building or street. However, the exact minimum or maximum area can vary based on the platform or service provider used. Typically, there’s no strict maximum limit.
How quickly can I see results from my geofencing ad campaign?
The immediacy of results from a geofencing ad campaign largely depends on the targeted location’s foot traffic and the campaign’s specific objectives. You can observe interactions within hours of launching for areas with high foot traffic. However, it might take days or weeks to gauge significant results for campaigns with long-term goals or in less frequented areas.
No matter how long it takes, the data shows you will likely see results. According to the U.S. Data Corporation, 53% of shoppers visited a retailer after receiving a location-based message.
How do device permissions and location settings impact geofencing effectiveness?
Geofencing heavily relies on users’ device location services. If a user has turned off location permissions for a specific app or their device in general, geofencing campaigns targeting them will be ineffective.
What platforms or tools are best for setting up and monitoring geofencing campaigns?
Several platforms excel in geofencing capabilities, with popular choices including Google Ads, Facebook Ads Manager, and dedicated platforms like GroundTruth or Simpli.fi. These platforms facilitate the setup of geofenced areas and provide robust analytics to monitor campaign performance in real time.
Focus on the Best Return, Above All Else
At Search Influence, we have the industry expertise to support you in reaching your online advertising goals. Our experience has helped clients from a multitude of industries reach their desired audience.
Whether through geofencing, display targeting, or paid search, we will partner with you to build an all-encompassing digital ads strategy that delivers a return on your investment.
If you’re ready to learn if geofencing ads are a good fit for your digital marketing strategy, contact our expert team to get started.
Image sources:
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