You’ve probably experienced it before – you pull into the parking lot of your favorite store and check your phone as you’re walking in. Suddenly, you’re seeing ads for the store you’re about to enter!
Congratulations, you’ve been targeted by one of the most effective marketing tools available: geofencing.
With the unbelievably powerful geolocation technology built into nearly every mobile device made, marketers now have the ability to target an audience not only by demographics and psychographics, but also by their specific location.
In this Definitive Guide, we’ll dig deep into the art of geofencing, exploring how it works, its myriad benefits, and ways you can leverage it to great effect for users at nearly any point in their buying journey.
What Is Geofencing?
In a nutshell, geofencing is a tool that allows businesses to deliver their ads to mobile devices that have entered into a specific geographic area. So, if you want customers who are visiting your store to receive an ad containing a special coupon, you can define a geofence around your store and parking lot. As users cross the boundary into the fenced area, they’ll receive the coupon ad.
Geofences can be as small as a single location within a single store or as large as an entire state. They can be defined anywhere on Earth’s surface, which affords marketers some interesting possibilities that we’ll explore a little later.
How Does Geofencing Work?
As a smartphone user moves around during the course of a day, the phone is continually using both satellite and terrestrial radio signals to track its own location (geolocation services). The most common geolocation services are:
- GPS: A special receiver in the phone receives signals from satellites in Earth orbit. The phone then triangulates the multiple signals to determine its precise location on the Earth’s surface.
- Terrestrial Geolocation: The phone uses information from various local networks – Wi-Fi, Bluetooth, or RFID – to determine and update its location.
When a device’s location overlaps a particular geofence, the appropriate ads are served to the device. Coupling geofencing with other audience targeting techniques, such as demographic or psychographic targeting, can result in incredibly well-focused and effective campaigns.
Some Examples of Geofencing
A Car Dealership
Trying to increase its sales team’s closure rate, a dealership wants to offer a special deal of five free oil changes with the purchase of a new or used car. They know that this deal isn’t likely to get people into the dealership but could be a value add that pushes a few browsers in the direction of becoming buyers. They geofence their own auto lots, and visitors to the lot see the ad when they pull out their phones to read reviews.
A Downtown Restaurant
A deli located in a busy downtown area, walking distance from both a major courthouse and a large hospital, wants to increase its share of the local lunch trade. To capitalize on the fact that both the courthouse and the hospital contain large numbers of people who need a quick lunch, the deli geofences both facilities with ads for a free upsized lunch combo. As people in both places check their phones around lunchtime, they see the special offer.
A Landscaping Service
A startup landscaping firm wants to increase its client base in a large suburban area where many homeowners have their own equipment and do their own lawncare. Since the owners know that people are often frustrated by lawnmower breakdowns, they geofence a local small-engine repair shop and then get really specific by targeting the lawncare equipment aisles at a nearby home improvement big-box store. When irritated homeowners with broken equipment start pursuing repairs, they see an ad for an affordable lawncare service that would keep them from having to deal with their balky equipment.
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What Can Geofencing Do for Me?
The benefits of geofencing are many and varied:
Improved audience targeting
As outlined in the examples above, geofencing provides an additional level of targeting beyond user-based. By focusing on a hyper-specific location, you can provide incredibly well-tailored ads to an audience that is already engaged with your brand, a competitor, or some other related activity.
More effective budgeting
Any time you can improve your ad targeting, you’re also improving your ads’ efficiency. By reducing your ad audience to users within a single location, you’re spending less overall on a particular campaign and, ideally, spending it on reaching higher-quality leads.
Directly target your competitors
There’s nothing preventing a business from setting a geofence around a competitor’s location. Offer their shoppers a better deal or a higher-quality product while they’re already nearing the end of their buyer’s journey, and you can change their mind and bring them to your door, instead.
Effective market research
Geofencing’s advantages don’t just come on the front end through targeted ad delivery. The metrics and tracking information provided to businesses as part of their geofencing campaigns can have incredible value in and of itself. Businesses can use this data to track the comparative performance of multiple locations, measure the effectiveness of traditional ads, and more.
How Do I Leverage Geofencing for My Business?
Step One: Identify Your Goals
As with any marketing campaign, the first step is to figure out what you want the campaign to do for your business. Identify a particular goal for each specific campaign you intend to launch, and make sure those goals are SMART (Specific, Measurable, Achievable, Relevant, and Timely). So, for instance, let’s say you want your business’s new second location to start attracting more customers. While that is a goal, it’s not very SMART. Let’s make it a little more effective:
S – Specific
Your new store is near a competitor’s existing location, and that sounds like a great place to start finding customers. So, to make your geofencing goal more specific, it could become “attract more customers from X competitor’s location.”
M – Measurable
Now that your goal is specific, make it measurable and explain how you’ll measure it. So, rather than saying “attract more traffic,” you could revise the goal to read: “Increase traffic from X competitor’s location by 300%, as measured by tracking the increase in customers who exit the competitor-location geofence and then enter my home-store geofence over the course of the campaign.”
A – Achievable
Even the best geofencing campaign is unlikely to triple the amount of traffic a new store can lure away from an established competitor, so the above 300% might be difficult to pull off. Keeping your goals attainable reduces the likelihood that you’ll fall far short of your expectations and become disheartened with the effort. So, a more achievable goal might be “Increase traffic from X competitor’s location by 20%, as measured by…”
R – Relevant
Your campaign goal must also be relevant to your overall business goals. In this case, you’re trying to build up a customer base for a new location, so setting a goal that involves driving traffic to your older, more established location would be counterproductive. Make sure that the goal and all elements within that goal track with your business’s general aims.
T – Timely
Finally, your goal must have an end date, otherwise there’s no point at which you can stop, make final assessments, and adjust or adapt for your next campaign’s efforts. So, in our above example, just one final addition brings us to a SMART goal:
“Increase traffic from X competitor’s location by 20% over six months, as measured by tracking the increase in customers who exit the competitor-location geofence and then enter my home-store geofence.”
Market Research Goals
Remember that your end goal for a geofencing campaign may not directly involve conversions or sales at all. The tracking that’s provided as part of any campaign can be incredibly powerful market research data.
Imagine you own an interior design company that has two locations. To compare traffic into each location, you could geofence both locations and track each location’s geofence entries and exits. To track which location is keeping customers more engaged, you can even compare dwell times to determine where customers spend more time.
Now imagine that your market research has indicated that you should consider opening a third location in a nearby town. In order to make the best possible decision for the new store’s location, you can set up a series of geofences in and around the new town and use the tracking data from those fences to determine where the town’s high-traffic areas are, their busiest times of day, and other traffic-behavior patterns.
Geofencing can also help measure the effectiveness of certain location-specific traditional ads, like billboards, that are otherwise more difficult to assess. By setting up a fence near a billboard and then tracking how often users exit the billboard-location fence and enter a store-location fence, you can with fair accuracy determine how many people saw your billboard and then decided to visit your location.
Step Two: Identify Your Targets
Take some time to really identify the locations you want to target with your campaign. Consider your audience and where they spend their time. Where are they going to be when they need what you’re selling? Be creative and really think about different ways your product or service can solve specific pain points and where those pain points will become the most evident.
- A criminal attorney might target the area around the local jail or a bail bondman’s office.
- An orthopedic clinic might target local sports fields and fitness centers.
- A small mom-and-pop coffee shop could target their competitors at Dunkin’ and Starbucks.
You also need to know where your audience isn’t. If your brick-and-mortar location is on a lonely road on the outskirts of town, you’re not going to have enough traffic to make an awareness campaign centered on your location effective. Or, if you sell farming equipment, targeting the center of a nearby city isn’t going to provide a lot of benefit.
Geofencing + User Targeting = Maximum Efficiency
Your audience targeting also needs to take into consideration user demographics and psychographics for optimal targeting. If your target market is homeowners in their late 20s and early 30s, you can get more bang for your advertising buck by specifying these demographic criteria for your campaign. Regardless of where your geofence is set, establishing user-based ad criteria means you won’t pay to advertise to customers who don’t need your product.
Other Geofencing Ideas
Trade Shows & Expos
People attending trade shows and expositions already have a high affinity for the products on display. Let these high-value prospects know that you and your products are on display as soon as they walk in the door! Include your booth location and a coupon for some special, limited-availability swag to get both a traffic and an affinity boost all in one.
Need a new trim carpenter for your contracting business? Set up a fence at local home improvement and hardware stores to find local workers who have the skill set you need. Or, set up a geofence near the entrance to a job fair or other hiring event to let potential employees know that you’re there, what positions you’re hiring for, and where they can find you to put in an application.
When your primary business is helping, not selling, you can still use geofencing to further your goals:
- A community cleanup group could geofence local parks and green spaces to find volunteers to help pick up litter and trash in public spaces.
- A scouting organization could geofence local sporting goods, outdoors, crafting, and DIY stores to find families with children who would enjoy being a part of the scouting movement.
- A pet rescue organization could see considerable success by geofencing area pet stores to remind shoppers that adoption is a viable and sometimes preferable alternative to buying.
Step Three: Create Your Ads
Choosing the right fence location and size are only part of a successful geofencing campaign. Without the right ads to deliver to the people who enter your fence, your campaign is destined to fail.
Your ads need to be compelling, engaging, and informative. Most of all, though, they need to be appropriate to the goal and location of your campaign.
Great geofencing ads should:
Geofencing ads are mostly consumed on the go while people are out and about, whether that means running errands, taking their lunch break, or spending a relaxing weekend morning at their favorite brunch spot.
Wherever they are, they’re usually in the middle of doing something, so this is not the place for subtle or conceptual advertising. Your ad needs to be concise, to the point, and easy to digest. There shouldn’t be any question as to the product or service being advertised and what it is you’re asking the customer to do.
Your ad’s messaging needs to prompt the user to take some form of action that’s aligned to the campaign’s goals. The obvious call to action that springs to most people’s minds is “visit my store and buy this product,” but there are countless other calls to action that can be just as effective for your geofencing campaign:
- Retail stores can ask in-store customers to download their app to enhance their shopping experience.
- Restaurants can invite customers in the surrounding shopping area to view their menu
- Barbershops can use an “exit fence” trigger to ask customers exiting the shop to leave a review on their Google Business profile
Whatever action you want your audience to take, it should be something they can do right now, preferably with one click or by taking a few minutes to visit a nearby location. Save long-form calls to action (filling out an involved credit application, describing details for a home renovation project, etc.) for more desktop-friendly display or search campaigns.
Be Appropriate to the Fence
You may have multiple geofences running as part of a single campaign, and the temptation might be to use one ad for all of the fences. While that might seem okay on the face of things, failing to differentiate your ads from location to location leaves several of the platform’s benefits on the table:
One of the main benefits of geofencing is its hyper-specificity. Why go to the trouble of detailing that your ad will only appear to a certain subset of users within a certain location if you’re going to use the same ad everywhere they might go?
Pay special attention to where each fence is located and why it’s located there. Tailor your ads to the very specific customer-type that you’re going to target in that location. For instance:
- In the above deli example, where fences were built around a local courthouse and a hospital, you may want ads for the courthouse to focus on your deli’s speed of service, while your hospital ad may concentrate more on promoting your healthier lunch options.
- For the landscaping company attracting customers who are tired of repairing and maintaining their own lawn equipment, look at the types of customers who visit a lawnmower repair shop vs. those who buy parts at a local hardware store and do their own repairs, and deliver custom ads to each location.
- If you’re fencing a competitor’s location and you know you have one knockout product that is higher-quality and less expensive than the competitor’s counterpart, push that product heavily in your ad to demonstrate those value propositions.
Even if your fences are all serving roughly the same audience base at similar locations, there’s still an advantage to dedicating a unique ad to each fence: built in A/B testing.
Serving each location with a separate ad gives you the built-in ability to test variations on your messaging, imagery, and other aspects of your ad. Since geofencing campaign tracking takes place in real time, you’ll be able to easily see which variation of the ad is moving the needle most effectively, and then use that information to make decisions about your geofencing ads going forward.
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Step Four: Track Your Geofencing Ads
Once you have decided on your geofencing ad goals and have established your location, you can track real-time campaign performance and analyze your results.
The metrics you gain from your geofencing campaign will reveal information you can use to further enhance or improve your marketing strategy. Collect essential measurements and data from your geofence, including:
- Age demographics
- Clickthrough rates (CTR)
- Conversion rates
- Gender demographics
- Number of sent notifications
You can see these results as soon as the campaign begins. You don’t have to wait for a monthly report to view your metrics and study your campaign as it progresses.
Additional data points include:
- The number of users who enter your fence
- The number of users who exit your fence
You can observe how many people enter and exit your fence daily, weekly, monthly, or yearly. Compare both figures to determine results like:
- Ad effectiveness
- Dwell times
- Most active entry times
- Traffic patterns
You can adjust your campaign strategy through careful data analysis to create even better results. Change your ad messaging to speak to your audience better. Sharpen your calls to action. Widen or tighten your fence to entice more people. Relocate your fence to a more practical area.
If there are areas you could revise based on campaign results, implement the changes immediately to see performance improvements.
A Note on Privacy
Geofencing has been in use for several years now, but some users are still sensitive to the fact that these ads “follow” or “track” them as they go about their day. Be respectful of the fact that these ads can very easily move from “useful” to “intrusive.” You can take a few steps in the planning of your campaign to ensure that your business is being respectful and protective of your customers’ privacy:
Target Your Campaign Accurately
Your concern for user privacy starts in the planning phases, as you drill down into demographics and psychographics to determine who will be receiving your ad and into your fence locations as you determine where they’ll see it.
People are considerably more forgiving of ads that speak to their unique and individual needs, so building an accurate targeting profile is essential. By avoiding serving your ad to customers who don’t need your products or services, you can help ensure that your ads won’t be seen as intrusive or unwanted.
As a bonus, the more well-targeted your ad is, the less money you’ll spend on delivering ads to low-quality leads with little likelihood of converting.
Time & Space Your Campaign Effectively
Nobody likes to be harassed with the same ads over and over again. Make sure that your campaign is set up so that users are only getting ads at a reasonable frequency.
If you’re targeting competitors and there are multiple competitors on one block, for instance, consider fencing the entire block rather than each individual store. That way, users aren’t receiving three or four ads over the course of a few minutes as they move from location to location.
Geofencing can be an incredibly powerful tool for building your business when goals are well-defined, target users and locations are intentionally established, ad content is high quality, and tracking results are used to drive future decisions. The experts at M&R have experience in every step of the process and can help you leverage the remarkable power of geolocation to bring in high-quality leads, drive conversions, and improve your bottom line across the board.