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. Marketers can deliver targeted advertisements, promotions, or notifications when a potential customer enters the defined area with a mobile device.

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 appetiser. 

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 neighbourhood, you could serve up the following types of marketing:

• Push notification: When users enter the geofenced area, the campaign sends a message that appears on their smartphone screens via the app. For example, a florist might tell users about a deal on roses.

• Text message: You can automatically text customers within your virtual boundary when they have phone numbers. 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 people searching for a “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 

Using geofencing allows you to improve customer targeting and gather data about your prospective customers’ habits to reach more people and ultimately boost your business. The following delves further into the advantages of this marketing practice. 

Targeted advertising

Geofencing technology lets you deliver relevant messages to a target audience. Because you know your users are in a specific location, you can reach them at the right time and place, increasing the chances of conversion.

Personalisation

You can better tailor your messages since you know who users are and where they are. Personalisation 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 behaviour, foot traffic patterns, and preferences. This information can help you better understand your target audience, optimise 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 recently visiting a competitor's store to entice them to consider your alternative options.

Potential challenges of geofencing

The primary challenge associated with geofencing’s use in marketing is its potential infringement on consumers’ privacy. While the United Kingdom has no laws prohibiting its use, it’s essential to ensure that consumers know what data you’re collecting and how you will use it. Complying with the 1998 Data Protection Act’s guidelines, including using individuals’ data only as explicitly stated, ensures that you incur no privacy or consent violations.

Related terms

• Target market

• Direct marketing

• Affiliate marketing

• Display advertising

Build digital marketing skills with Google

Geofencing empowers local businesses with data that can transform their ability to reach customers directly, increase foot traffic, and ultimately improve brand recognition and sales. It’s a dynamic digital marketing strategy that targets consumers on their mobile devices to reach people at just the right time. 

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