What You Need to Know About Geofencing Marketing

Geofencing is an incredibly powerful tool that harnesses the capabilities of location-based marketing, giving you the opportunity to tap into the audience that is physically around your business. With the rise of smartphone users in the last decade, geofencing has become more popular and more effective than ever before. This makes geofencing a great form of marketing to an audience that is nearby your business, increasing the likeliness of converting people.

This article will help you learn more about geofencing and how you can combine geofencing with paid ads to determine if it will be beneficial to your marketing strategy.

Evening cityscape with a digital geofencing graphic pinpointing a location, representing targeted marketing strategies.

What is Geofencing?

Geofencing is a location-based service that allows companies to use hyper-targeted, location-based marketing. It empowers businesses to engage their target audience by sending relevant messages to mobile users once they enter a specific location. When potential customers enter this location, they will receive pre-written and tailored communication.

Geofencing communication encourages targeted audiences to visit the store, with some of the most successful geofencing strategies including remarketing campaigns, app notifications, and text messages. Beyond encouraging a target audience to visit an in-store location and make a purchase, geofencing is an excellent way to build brand awareness and maintain customer loyalty.

What is Geofencing Marketing?

Geofencing marketing is a location-based marketing strategy that enables your business to advertise to potential customers within a specified geographic area. This strategy utilizes GPS and radio frequency identifiers (RFIDs) to construct a virtual boundary around the location of your business to advertise to individuals in the area.

How Does Geofencing Work?

In order for geofencing to work, the first step is to establish a virtual boundary around a specified location in GPS or RFID-enabled software. This can be as simple as a circle drawn in a 100-foot radius around a location. This geofence will trigger a response when an authorized device enters or exits the area and the trigger is defined by the business beforehand. A trigger could be anything from a text message, email, or notification within the business’s mobile app.

How Much Does Geofencing Cost? 

The overall cost of geofencing advertisements will depend on the marketing platform you choose to run your geofencing campaigns on, how long they run for, and who manages the campaigns. While the price of geofencing can vary, it’s common to have a budget of $10K, $20K, or $30K per month set aside for this type of marketing. Fortunately, besides the cost of the marketing platform, there are no other hidden fees; geofencing doesn’t require any hardware infrastructure.

What Impacts the Cost of Geofencing?

Many factors can impact the cost of geofencing, such as the type and number of platforms you use geofencing on, the geofencing marketing tools you decide to use, the number of places and locations you want to target, the sizes of the areas included in the geofenced campaign, and if you're going to partake in competitor geofencing.

Specialist geofencing marketing tools can also incur high costs. Consider your needs carefully; the more tools you choose, the higher your budget will need to be. Hiring a digital marketing agency that already has access to various tools, and will only charge you for running your campaign, can be very cost beneficial and provide better results.

Geofencing Facebook Ads

Facebook is one of the best platforms for advertising. With 2.9 billion monthly active users, you should be taking advantage of the platform to get in front of potential customers. However, you should consider the sheer magnitude of this number of users; your advertisements will never reach everybody. So, how do you know your ads are reaching the right people? That’s where Facebook geofencing comes in. By geofencing Facebook ads, your ads will target the users most likely to engage with your products and services.

Facebook geofencing allows you to target your ads to individuals in a particular area. But, unlike typical location targeting, geofencing Facebook ads also allows you to draw a virtual polygon around locations where customers are likely to visit your physical location. Whether you want to deliver ads to people close to you, in the area of a future event, or in the area surrounding your competitors, there are a plethora of reasons why geofenced Facebook ads can benefit your business.

Benefits of Geofencing Facebook Ads

By geofencing Facebook ads, you will find that your ads are better received and have higher engagement. While the process of targeting your ad campaign to a specific location seems simple, there are actually a number of ways it can benefit you. Here are just a few reasons why you should geofence your Facebook ads.

Build a Local Community

There are multiple benefits to geofencing Facebook ads in your immediate local area. On the surface, it is clear that the closer a user is to your physical location, the more likely they are to visit it. This greatly helps businesses who rely on their brick-and-mortar stores, whether that’s because their products are better sold in-store or because they primarily operate on services.

This also gives you the opportunity to build a community with your local customers. If you run a business, you understand the importance of returning customers; not only are they guaranteed and consistent sales, they are able to spread the word about your business to neighbors. By geofencing Facebook ads, you can build your brand name in your local area and become an essential business to your community.

Boost Attendance for Events

As a business owner, you know the importance of taking advantage of events. This could apply to larger events, such as concerts, or smaller events, like a local book festival. Keep an eye out for events near your location. If you sell a product that could be desirable to the attendees of the event, targeting that specific location could yield results. Geofence Facebook ads to reap the benefits.

Draw Customers Away from Competitors

As you learn how to geofence on Facebook successfully, this one will become a go-to next step. This is a creative way to offer customers an alternative to the products that they are used to. If, for instance, you operate a burger restaurant that happens to be a few miles from a McDonald’s, it may be a wise marketing decision to target that area. Surely you will reach a number of customers who desire something new. The goal is to entice customers from competitors in neighboring areas.

How to Successfully Implement Geofencing

Considering the potentially higher cost of geofencing compared to other marketing tactics, it’s understandable that companies want to ensure their investment has a good return. For success, you must understand your target audience's behavior and desires, select the best target location for the customer, use engaging calls to action, and optimize campaigns as you go.

Choose the Closest Target Location

Location is key when it comes to geofencing, so be sure to choose a target location close enough to the physical store location that is most convenient for potential new customers. Choose a geofence location size that is close to a five-minute drive, or that is walkable, between the store and the customer. This will increase the likelihood that they may be willing to make the trip.

Understand the Target Audience’s Behavior

Research your target customers to personalize experiences and messaging for your audience. The more you can personalize your messaging, the more likely it will engage your target audience, making them want to visit your store and potentially make a purchase, ultimately generating more sales.

Be Selective About Your CTAs

It is essential that you use strong calls to action in your campaign messaging for a greater return on investment. Mobile messages should be inviting and incentivizing enough to encourage potential customers to take a detour and visit your store.

Modify Campaigns While They Run

As well as personalizing your geofencing messaging around your audience's behaviors and desires, it is beneficial to adjust campaigns once you receive data and insights into their performance. For example, if you notice a specific age group buying up a particular item, you should change the messaging and targeting to fit that audience even more.

What Are Other Outside Marketing Techniques to Try?

While you’re utilizing geofencing marketing, you’ll want to try available targeting techniques, such as context targeting, content targeting, retargeting, and dayparting. Combining these digital marketing strategies and techniques with your geotargeting strategy will make your marketing efforts even more powerful.

Context Targeting

A targeting strategy that involves selecting ads that are relevant to the content that’s already on the page. This is the process of delivering marketing content to potential customers at the right moment. If you’re implementing geofencing into your marketing strategy, this could mean sending a push notification on your app or pushing ads on social media when a customer is close to your location.

Content Targeting

A targeting tool that focuses on matching content with the exact keywords used in a person’s searches or the search intent. For example, if you have content for a specific keyword such as “Italian restaurants with private dining” you’d ensure the content discusses your cuisine and private dining information.

Retargeting

A targeting strategy that shows an ad to potential customers based on a product or page they’ve previously viewed on your website. Implementing a strategy like allows you to remind people of your products or services knowing that they have previous experience with your business.

Dayparting

This is a targeting strategy that targets customers based on the time of day and when they are typically most active. Implementing this strategy can help encourage users to visit your business more effectively based on their behaviors. This can be incredibly effective if your business has certain days or times where you’re more likely to be busy, as it can amplify that.

How to Use Precision-Targeted Geofencing

Another exciting benefit of geofencing is its ability to target a precise location. For instance, with a strategy known as geo-conquesting, businesses can create a geofence around their competitor's site and then send ads targeted to the competitors' customers. Precision-targeted geofencing can target audiences at large conventions, shows, events, and more, giving you the opportunity to exponentially grow your audience in a relevant setting. This form of geofencing can also send ads to prominent locations such as buildings, malls, town squares, and more, which means that you can send ads to your audience when they are in a space that is nearby your business.  

Geofencing Marketing Examples

Now that you have a clear understanding of what geofencing is and how it can be implemented, it’s time to take a look at how other brands utilize this technology. Not only will these examples give you further insight on geofencing, but it can also inspire you to see how geofencing can be utilized for your business.

Starbucks

On select Thursdays from 2-7 PM, Starbucks offers a happy hour special, where customers can buy one get one free on any grande or larger drink. In order to further promote this special, Starbucks will use geofencing technology to send push notifications to their app users when they are nearby a location. This strategy allows them to customize the notifications to their customer’s behavior. For example, if someone primarily drinks a frappuccino, the push notification they receive will reflect that behavior.

Uber

Uber heavily relies on geofencing marketing for their drivers by creating fences around nightclubs, airports, hotels, and more. For example, when a user gets off a plane, Uber will send them a notification to let them know that there are Uber drivers available. This strategy is effective for companies like Uber because it helps them get more fares, while also being an example of how creating an effective geofence in the right location can bring in more sales.

Sephora

In the Sephora app, one of their features is a “store companion,” which turns on as soon as the customer enters a store. This companion will give customers information on past purchases, product reviews and recommendations, limited-edition offers, and more. Through the use of geofencing technology in this way, Sephora is able to increase its customer satisfaction and loyalty.

Find Out How Geofencing Can Benefit Your Business Today

Geotargeting is a powerful marketing strategy that can help you grow your customer base and improve customer loyalty. Attract new customers and grow your business by running effective geofencing campaigns that get more customers through the door.

Americaneagle.com is a digital marketing and web design company with more than two decades of experience and can help your business digitally excel. Our digital marketing team is highly experienced in a multitude of marketing strategies, including geofence marketing, and aims to grow your business. Our other digital marketing agency services include search engine optimization, social media marketing, content marketing, paid search management, email marketing and automation, and more. We’ll help you drive qualified leads and revenue.

If you’re interested in learning more about how to enhance your business’s marketing strategies, contact us today.


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