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Geofencing: How to Find Customers Where They Are

Posted by Tasnim Ahmed

April 19, 2021    |     6-minute read (1077 words)

For businesses, targeting the right audience at the right time for an advertising or marketing campaign has always been arduous. But thanks to the ever-evolving world of technology, a location-based marketing tactic has emerged that marketers and advertisers can use to reach their consumers based on the places they visit. 

Tracking the physical location to target your audience creates unique business opportunities, such as  gathering better campaign analytics, extracting marketing insights and sending push notifications.

What is geofencing marketing?

Geofence marketing, more often referred to as geofencing, is a location-based marketing strategy that businesses leverage to engage with their target audience. Geofencing allows users to design a virtual “barrier” and to send out targeted messages to smartphone users who enter that predetermined geographic area. 

As a mobile and desktop marketing tactic, geofencing helps businesses interact with both consumers and potential customers who are near a defined space and are therefore more likely to buy even before visiting a particular store. 

For example, business marketers may use this strategy to send product promotions to customers or potential customers’ mobile devices when there’s a search trigger in a specific location, physically. This could be in nearby store, a mall, or the neighborhood.

Why geofencing marketing?

The market is constantly evolving. And so are customers, who are are swamped in irrelevant ads to which they either don’t respond or whose messaging they may opt to block altogether. This is the genius of geofencing. Businesses can deploy it to capitalize on the two most important elements of a buyer’s journey – time and location.

Geofencing transports the right message at the right time and right location of both preexisting and potential customers. Geofence marketing is an excellent tool for businesses to connect with their desired audience; a successful geofencing marketing creates meaningful interactions between you and your customer.

How does it work?

Geofencing uses a combination of tech such as GPS, beacons, Wi-Fi and IP addresses of the target audience in order to build the virtual fence. When a smartphone user with a mobile app related to the business enters this defined area, their device receives special messages, notifications or ads. While the strategy produces fewer leads, they are much more qualified leads and therefore offer a higher probability of conversion. Qualified leads offer higher-quality clicks and better ROI for your business. That’s because geofencing’s core strategy relies on meeting your customers’ needs right where they are by harnessing the power of “near me” searches.

Getting started with a geofencing campaign

To launch an effective marketing or advertising campaign, you need to use the right geofencing strategy and software with high precision. Follow these steps:

1. Create a geofence target zone

Outline a digital GPS boundary around a specific geographical area that will attract your target audience. You must be very clear about your audience’s profile. Who are they, and what interests them? How do they spend time online, and which places or events are they likely to visit?

2. Choose a location 

Select a location that is highly likely your target audience will visit. These are the types of targeting to consider: 

  • Competitor targeting: Shows ads to people who are visiting locations of a competitor
  • Addressable targeting: Shows ads to people in a specific locality near you
  • Traveler targeting: Shows ads to people who are in select hotels and resorts 
  • Event targeting: Shows ads to people at an event that would attract your ideal buyer
3. Develop the strategic message 

Create the proper message or ad content to deliver to your target audience. Create this messaging, whether in the form of text, static, dynamic or a video, by focusing on what is relevant to your customers, what information is required and what message will most likely drive your audience to act.

4. Create a call to action

Based on your audience and business goals, incorporate a desired call to action. For example, your call to action could be to have the recipient click on a link to make an online purchase or to receive a discount coupon for a store visit.

5. Track conversions

To monitor the results and gauge performance of your geofencing campaign, track online conversions by measuring the number of clicks and purchases derived from the push. To track offline conversions, set up conversion zones, which use tags to track people who see your ad.

Key benefits of geofencing marketing:

Targeting

The higher probability of conversions is the biggest advantage of geofencing. Targeting individuals who are geographically close to your target zone eliminates unnecessary layers of extraneous data, and your message is more relevant.

Effective spending 

Geofencing reaches an audience with a higher probability of conversion. This means less money spent on customers not relevant to your campaign. In other words, by paying to reach a targeted group of customers, your ad spend is more efficient.

Valuable insights

With the right campaign and team, you’ll gather important insights such as traffic patterns and the efficacy of the messaging. The impressions, clicks and offline conversions tracked during the campaign can optimize future campaigns.  

Greater attribution

With geofencing, you know when the ad was seen and what action the consumer took. These analytics can inform other marketing efforts and determine your business’ ROI.

How geofencing differs from geotargeting

Industry professionals often use the terms geofencing and geotargeting interchangeably, but they are actually entirely different strategies.  As described, geofencing is the act of sketching a virtual barrier around a location or defining the location of the target audience by way of GPS, beacon or Wi-Fi network. Geotargeting is the act of delivering ads to an audience that meets a specific targeting criterion, typically a person’s location. The key difference is that when developing a campaign, geotargeting can also target the demographic, interest or behavior of their desired customer.

KPIs for geofencing marketing

Monitoring key performance indicators is an essential part of geofencing campaigns. Not only do the KPIs track the campaign’s success, but they also reveal any weaknesses, which can be used to optimize future campaigns accordingly. 

Be sure to track these three geofencing KPIs.

  1. Click-through rate / CTR: The percentage of people who saw your ad and clicked it.

  2. Total visit rate / TVR: The percentage of people who saw your ad and then visited your location

  3. Cost per conversion / CPC: The cost to drive a user to take action

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