Geofencing is a location-based digital marketing strategy that allows marketers to send targeted messages or ads to people within a specific geographical area. This concept relies on technologies like GPS, Wi-Fi, radio frequency identification (RFID), or Bluetooth beacons to create virtual boundaries or “fences” around a specific location.
How Geofencing Works
Establishing a Geofence: A marketer sets up a virtual boundary or geofence around a desired location. This could be a physical store, an event location, a competitor’s business, or any geographical area where potential customers might be located. The size of the geofence can be adjusted to suit the marketer’s strategy.
Triggering Actions: Once the geofence is set up, specific actions or events are set to trigger when a mobile device (typically a smartphone or tablet) enters, exits, or dwells in the geofenced area. This is achieved by using the device’s GPS or Wi-Fi information.
Delivering Messages or Ads: When a device crosses the geofence boundary, the predetermined action is triggered. This could be the delivery of a push notification, SMS message, or targeted ad promoting products, services, or events. For example, if the geofence is set around a retail store, the trigger could send a promotional offer to encourage the person to visit the store.
Certainly, here are some geofencing strategies that could be beneficial for businesses focused on online sales or lead generation:
- Competitor Conquesting: With geofencing, businesses can place a virtual boundary around competitor locations. When potential customers enter these locations, they can receive targeted ads about the business’s superior offerings, discounts, or special promotions. This can drive customers away from competitors and towards your business.
- Event Targeting: This involves setting up a geofence around a particular event related to your industry. For example, if you’re an online bookseller, you might set up a geofence around a large book fair or literature festival. Attendees at these events could then receive targeted ads or promotional offers from your online store.
- Retargeting Visitors: With geofencing, you can capture the device IDs of people who enter a specific area, such as a related store or event. Even after they’ve left the geofenced zone, you can continue to deliver targeted ads to these potential customers, driving them towards your online platform.
- Target High-Interest Areas: If your business caters to a particular hobby or interest, set up a geofence around related areas. For example, an online fitness equipment retailer could set a geofence around gyms or parks. Those entering these areas would then receive targeted ads for your online store.
- Targeting Based on Behavioral Patterns: Utilize data from geofencing to understand the behavioral patterns of your potential customers. For instance, if data shows a group of users frequently visit luxury boutiques, and your online business sells high-end products, you can target such users with relevant ads or offers.
- Location-Based Offers: Provide special offers or discounts to people in a specific area. For instance, a local delivery app could give a discount to users within a certain radius from partner restaurants.
- Collaborating with Complementary Businesses: If you’re an online furniture retailer, consider setting up a geofence around a real estate agency or a popular residential area. People looking for new homes are likely also interested in new furniture, making them prime targets for your ads.
EXAMPLE CASE STUDIES
Retail: Macy’s launches a geofencing campaign around its key locations. When potential customers enter this geofenced area, they receive a push notification on their mobile devices offering them a 20% discount on their next in-store purchase.
Automotive: Ford dealerships geofence competing car dealerships. When customers visit these rival locations, they receive targeted ads for special leasing deals or low financing options on Ford vehicles, encouraging them to reconsider their options.
Restaurant: A local pizza joint creates a geofence around nearby college campuses and sports venues. When people enter these geofenced areas, they receive a pop-up ad offering a buy one get one free deal on pizzas.
Real Estate: A real estate company sets up geofences around its listed properties. When potential buyers enter the geofenced area, they receive targeted ads offering virtual tours, open house invitations, or information about a price reduction.
Travel & Tourism: An airline company sets up a geofence around major airports. When people are detected within the geofence, they receive a targeted ad offering a discount on their next flight booking or an upgrade offer for their existing reservation.
Healthcare: A pharmacy chain creates a geofence around doctors’ clinics and hospitals. When patients check out and enter the geofenced area, they receive a coupon for a discount on over-the-counter medication or wellness products.
Fitness: A local gym geofences a radius around fast food chains and sends out targeted ads offering a free one-week trial membership, motivating people to opt for healthier lifestyle choices.
Grocery: A supermarket chain geofences its store locations. When customers enter the geofenced area, they receive personalized deals based on their past shopping behavior, like a discount on their frequently bought items.
Event Venues: A concert venue sets up a geofence during a specific event. Attendees within the geofenced area receive targeted ads for upcoming events or offers on food and drink inside the venue.
Education: A university sets up a geofence during a campus tour or open house. Visitors receive targeted ads on their mobile devices offering application fee waivers or information on scholarship opportunities.
We utilize a number of platforms and vendors depending on need and budget. What we’ll do at NuSpark is help plan the strategy, the creative, and the tracking. In detail:
Featured Solution: Geoframing with ElToro. Cookieless targeting ad platform.
The El Toro MatchBack Analysis is a free reporting option that identifies one-to-one conversions and simplifies calculating return on ad spend (ROAS) to understand the impact of marketing budget with El Toro. Since El Toro matches IP addresses at the physical address level, they can provide unparalleled granularity in their reporting since they know exactly who is included in the target audience. This process is entirely cookie-free; they simply need a sales file containing address data (address 1 and ZIP code) to match against the targeted audience.
El Toro’s MatchBack reporting solution validates the proficiency of their technology. They use them to display the post-campaign results and the direct impact of your advertisements. Clients usually receive these within a fortnight after their campaign concludes. To gauge the efficacy of the campaigns, clients share sales reports with El Toro for its duration. They then juxtapose this with their ad metrics. This comparison against their targeted audience reveals genuine ROI.
MatchBack metrics have two primary sections for assessment: a target group and a control group. The target group comprises of those they matched IP addresses to and served ads. In contrast, the control group includes those they couldn’t match IPs and consequently, didn’t serve ads to. El Toro maintains this distinction to uphold transparency, enabling clients to see the comprehensive benefits of their technology.
Two example reports are below, but better to meet with me and El Toro to review in more detail.