Geofencing: Revolutionizing Local Digital Marketing

Intro

Geofencing is a technology that allows businesses to create virtual boundaries around a specific location and send targeted ads or notifications to users who enter or exit that area. Geofencing uses various methods, such as GPS, cellular data, RFID, or Wi-Fi, to track user location and deliver personalized messages through apps or software programs. Geofencing has evolved and grown rapidly in the field of digital marketing, as it offers a way to reach customers based on their proximity and context.

In this article, we’ll discuss how geofencing can revolutionize local digital marketing.

So, keep reading!

First Off, Let’s Understand Geofencing Technology

Source: Market Research Future

Geofencing is a technology that allows you to create virtual boundaries around physical locations and send targeted messages or alerts to users who enter or exit those areas. David Owens, Digital Marketing and Growth Director at First Aid at Work Course, said, “Geofencing can be used for various purposes, such as marketing, security, navigation, or smart home automation.” The above graph shows that the geofencing market size can reach 4.53 USD billion in 2030, up from 0.63 USD billion in 2019.

Let’s explore the technical aspects and the types of geofencing.

Technical Aspects of Geofencing

Geofencing uses technologies like GPS, RFID, Wi-Fi, cellular data, or combinations of all four to determine the location of a device being tracked.

Sebastian Membrez, CEO of OnnoPlus Service, said, “To create a geofence, you need to define a geographic area on a map, such as a circle, a polygon, or a custom shape. You also need to specify the actions or events that will be triggered when a device enters or exits the geofence.”

For example, you can send a notification, an advertisement, a coupon, or a reminder to the device’s user. You can also use geofencing to control other devices, such as smart lights, locks, thermostats, or cameras.

To implement geofencing, you need to have a geofencing app or software that can access the real-time location data of the device and compare it with the geofence boundaries. The app or software can also communicate with other apps or devices to perform the actions or events. Geofencing apps or software can run on various platforms, such as smartphones, tablets, computers, or watches, adds Jeremy Ferguson, Owner of PixelPoynt SEO Agency.

Types of Geofencing

There are different types of geofencing, depending on the criteria and the purpose of the geofence. Some of the common types are:

1. Location-based geofencing

This type of geofencing uses the physical location of the device as the main criterion for triggering actions or events. For example, a retailer can create a geofence around its store and send a promotional offer to customers who are nearby. A parent can create a geofence around their child’s school and receive an alert when the child arrives or leaves, shares Jonathan Rosenfeld, Founder & Attorney at Rosenfeld Injury Lawyers LLC.

2. Time-based geofencing

This type of geofencing uses the time of the day or the date as the main criterion for triggering actions or events. For example, a restaurant can create a geofence around its location and send a lunch deal to customers who are in the area between 11 am and 2 pm. A hotel can create a geofence around its location and send a special offer to customers who are in the area during a holiday season. A museum can create a geofence around its location and send a reminder to visitors who are in the area on a certain day of the week, adds Joe Cronin, President of International Citizens Insurance.

3. Hybrid geofencing

Hybrid geofencing combines the strengths of both location and time-based approaches. This versatile method allows businesses to craft finely tuned campaigns that consider not only where users are but also when they're most likely to engage. It's a dynamic strategy that adapts to the ebb and flow of both space and time, offering a comprehensive approach to audience targeting, said Josef Eines, SEO Specialist at FORNYE.

The Role of Geofencing in Local Digital Marketing

Geofencing is a powerful technique that can help local businesses improve their digital marketing efforts. Cole Vineyard, CEO and Founder of Teach Simple, shares, “By creating virtual boundaries around specific locations and sending targeted messages to customers who enter or exit those areas, businesses can increase their visibility, engagement, and sales.”

Targeted Advertising

Source: LinkedIn

One of the main benefits of geofencing is that it allows businesses to deliver personalized promotions and offers to customers based on their location, explains Joni Ogle, Chief Executive Officer at Transcend Recovery Community.

For example, a restaurant can send a coupon or a menu to customers who are near their location, a salon can send a discount or a reminder to customers who are due for a haircut, or a bookstore can send a recommendation or a review to customers who are browsing for books. These messages can be sent via text, email, app notification, or social media ad, depending on the customer’s preferences and behavior.

Khashayar Shahnazari, Chief Executive Officer at FinlyWealth, said, “Personalized promotions and offers can help businesses attract more customers, increase conversions, and boost loyalty.”

Another benefit of geofencing is that it allows businesses to tailor their messaging based on the location and context of the customer, adds Martynas Žvirblis, Manager at VPSForexTrader.

For example, a coffee shop can send different offers to customers based on the time of day, weather, or events. A pizza place can send a lunch deal to customers near their office, a dinner deal to customers near their home, or a special offer to customers near a stadium during a game.

Customer Engagement

Geofencing can also help businesses improve their customer engagement by creating interactive campaigns that involve gamification, rewards, or feedback, adds Lais Schulz, Content Strategist at Artigo do befreela.

For example, a gym can send a motivational message or a reward to customers who are near their location, a museum can send a trivia question or a fun fact to visitors who are in a certain exhibit, or a hotel can send a survey or a rating request to guests who are checking out.

These messages can be sent via text, email, app notification, or social media ad, depending on the customer’s preferences and behavior. Sumeer Kaur, Founder of Salwar Kameez, explains, “By using geofencing, businesses can provide value-added services, incentives, and experiences to their customers, which can foster loyalty and word-of-mouth.”

Data Collection and Analytics

Geofencing can also help businesses collect and analyze data about their customers’ behavior, preferences, and feedback, said Thomas Ma, Owner and Co-Founder at Sapphire Studios.

For example, a car dealership can track how many customers visit their showroom after receiving a geofencing ad, a grocery store can test different offers and see which one generates more sales, or a hospital can compare their occupancy rates and patient satisfaction with their competitors. This data can be collected via text, email, app notification, or social media ad, depending on the customer’s preferences and behavior.

Data collection and analytics can help businesses measure and improve their performance and ROI. Geofencing can provide valuable data on customer behavior, foot traffic patterns, and preferences, which can help businesses optimize their marketing campaigns, pricing, inventory, and customer service. By using geofencing, businesses can gain insights and make informed decisions about their marketing strategies and challenges, adds Martin Seeley, CEO of Mattress Next Day.

Challenges and Concerns in Geofencing

Geofencing is a technology that allows businesses to create virtual boundaries around specific locations and send targeted messages to customers who enter or exit those areas. Geofencing can be used for various purposes, such as marketing, security, navigation, or smart home automation. However, geofencing also faces some challenges and concerns that need to be addressed.

Privacy Issues

One of the main challenges and concerns of geofencing is privacy. Consumers may feel uncomfortable with businesses tracking their precise location and using that information for marketing purposes. Businesses need to balance personalization with privacy, and address consumer concerns in a transparent and ethical way.

Eran Mizrahi, CEO of Ingredient Brothers, shares, “Addressing consumer concerns means that businesses should communicate with their customers about the benefits and risks of geofencing, and explain how they collect, use, and protect their location data. Businesses should also listen to customer feedback and complaints, and resolve any issues or disputes in a timely and respectful manner.”

Technical Limitations

Geofencing relies heavily on the accuracy of location signals, primarily GPS. However, challenges such as signal interference in urban environments or limited satellite visibility can impact the precision of geofencing boundaries. Businesses must be aware of these signal accuracy limitations and implement strategies to mitigate errors. Combining GPS with alternative technologies or refining geofence parameters based on real-world testing can enhance the reliability of location-based triggers, shares Douglas Nigels, Operations Director at Leeds First Aid Courses.

Battery and Resource Usage

The continuous tracking required for geofencing can exert strain on users' device batteries and resources. Striking a balance between effective geofencing and minimizing the impact on device performance is crucial. Optimizing geofencing algorithms, employing energy-efficient tracking methods, and providing users with control over the frequency of location updates are strategies to mitigate these concerns. Prioritizing user experience by ensuring that geofencing doesn't compromise device functionality is essential for long-term user acceptance, said David Martinez, VP Enterprise & OEM Accounts at Cybernet Manufacturing.

Best Practices for Implementing Geofencing in Local Digital Marketing

Geofencing is a powerful technique that can help businesses improve their digital marketing efforts by targeting customers based on their location and context. But to implement geofencing effectively, businesses need to follow some best practices.

Craft Effective Geofencing Strategies

One of the first steps to implement geofencing is to craft effective geofencing strategies that align with the business goals and objectives. Some of the key elements of geofencing strategies are.

• Set clear objectives: Businesses need to define what they want to achieve with geofencing, such as increasing foot traffic, conversions, loyalty, or awareness. They also need to set measurable and realistic key performance indicators (KPIs) to track and evaluate the success of their geofencing campaigns, adds Michael Hess, Tech Expert at Code Signing Store.
• Define target geofences: Businesses need to identify and select the most relevant and profitable geographic areas to create their geofences. They need to consider factors such as customer demographics, behavior, preferences, and proximity, as well as competitor locations, market potential, and operational costs. They also need to determine the optimal size, shape, and duration of their geofences, depending on their objectives and budget. For example, a business may create a geofence around its store with a radius of 500 meters and a duration of 24 hours, shares William Westerlund, SEO Expert at Tradeit.gg.

Leverage Location-Based Data

Another important aspect of implementing geofencing is to leverage location-based data to optimize and personalize the geofencing campaigns. Some of the ways to leverage location-based data are.

• Utilize consumer behavior data: Businesses can use geofencing to collect and analyze data on consumer behavior and patterns, such as location, dwell time, visit frequency, purchase history, and feedback. This data can help businesses understand their customers better, segment them into different groups, and tailor their messages and offers accordingly. For example, a business can use geofencing data to identify loyal customers who visit frequently and send them exclusive rewards or discounts, adds Maria Mercieca Imbroll, Team Leader of Corporate Services at CSB Group.
• Integrate geofencing with other marketing channels: Businesses can use geofencing to complement and enhance their other marketing channels, such as email, social media, and content marketing. This creates a unified, consistent, and engaging user experience across all touchpoints. For example, a business can use geofencing to send a push notification to a customer who is near their store, and then follow up with an email or a social media post with more details and incentives, shares Mario Medina, CEO & Co-Founder at DRVN.

Test and Refine Geofence Parameters

Businesses need to test and refine geofence parameters regularly to ensure correct triggers and avoid unwanted notifications. They need to do real-world testing to evaluate geofences in different settings. They need to modify parameters based on signal accuracy, user feedback, and actual user behavior.

Shatha Rawashdeh, Medical Doctor at Skin Simple True, said, “Businesses need to monitor and update geofence parameters based on changing conditions, such as weather, traffic, or events. They need to use tools like polygon mapping or Blueprints to create more precise and accurate geofences. These steps can help businesses optimize geofencing performance and effectiveness.”

Conclusion

Geofencing is a location-based marketing technique that can help local businesses improve their digital marketing efforts by targeting customers based on their location and context. By using geofencing, businesses can deliver targeted ads or offers, create interactive campaigns, and collect and analyze data.

However, geofencing also faces some challenges and concerns, such as privacy issues and technical limitations, that need to be addressed. To implement geofencing successfully, businesses need to follow some best practices, such as crafting effective geofencing strategies, leveraging location-based data, ensuring optimal message relevance, and integrating geofencing with multichannel marketing. Geofencing is not just a marketing tool, but a way to connect with customers and create value for them.