What Is Geofencing?

Geofencing in digital marketing refers to using location-based technology to create virtual boundaries around specific geographic areas. Marketers establish these virtual boundaries, known as geofences, around physical locations. When a potential customer enters the defined area with a mobile device, marketers can deliver targeted advertisements, promotions, or notifications.

Geofencing marketing relies on the location services of users' mobile devices, such as GPS, WiFi, or cellular data. For instance, when you walk past a local restaurant and enter its geofence, you get a text message with a coupon for a free appetizer. 

Marketers like geofencing because it goes beyond signage and other physical advertising displays. They simply set up a geofence on a digital map, which triggers an action when a mobile device enters the defined area.

Types of geofencing marketing

Marketers use geofencing in various ways to enhance their efforts. Whenever someone enters a specific geofence, such as a retail store, event venue, or neighborhood, you could serve up the following types of marketing:

• Push notification: When users enter the geofenced area, the campaign pushes out a message that appears on their smartphone screens via the app. A florist, for example, might tell users of a deal on roses.

• Text message: When you have customers’ phone numbers, you can automatically text them within your virtual boundary. For example, a restaurant might remind the user it’s time for lunch when they’re just a block away.

• PPC ads in a web browser: With pay-per-click (PPC) ads, you pay a platform like Google Ads to show your PPC ads in a user’s web browser if they are searching for your product or service within your vicinity. A nail salon, for example, could use this type of location targeting to target people searching “manicure near me.”

What you need to geofence

You’ll need a few essentials to effectively geofence. These include:

•Access to positioning data (WiFi, GPS, cellular data, Bluetooth beacons)

•An application to establish your geofence boundaries that users download so you can detect their activity

•Permission granted by the app users for you to receive updates on their location

Benefits of geofencing 

Here are some of the key advantages of incorporating geofencing into your marketing strategy:

Targeted advertising

Geofencing technology lets you deliver relevant messages to a target audience. You can reach your users at the right time and place because you know your users are in a specific location. This increases the chances of conversion.

Personalization

Since you know who users are and where they are, you can better tailor your messages. Personalization helps create a sense of relevance, and it increases the likelihood of customer engagement. Plus, you’re providing value and convenience to customers, which can boost loyalty.

Customer interaction

Engaging with your customers in real time when they are nearby can help you capture their attention. Using push notifications, text messages, or ads, you can deliver timely and location-specific messages to encourage action.

Data-driven insights

When users download your app and allow access to their location data, you can gain valuable insights into customer behavior, foot traffic patterns, and preferences. This can help you better understand your target audience, optimize your marketing strategies, and make informed business decisions.

You can even use data to target users who visit your competitor’s locations. Deliver ads or offers to users who have recently visited a competitor's store to entice them to consider your alternative options.

Related terms

• Target market

• Direct marketing

• Affiliate marketing

• Display advertising

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