Geofencing Marketing: A Definitive Guide

By Vaibhav Kakkar | January 20th, 2023

Table of Contents

Marketing has significantly evolved over the years. As a result, businesses now have various tools in their arsenal to design their marketing strategies. One such powerful tool is geofencing marketing.

Geofencing is a great tool for local marketing since it enables companies to connect with their target market in a specific geographical region. It has recently grown in popularity among businesses across spectrums and industries. There is also a strong explanation behind this recent rise.

Want to learn more about geofencing marketing? You have reached the right destination. Keep on reading.

This blog post will explain what is geofencing marketing, how it works, and its benefits. Moreover, we will also discuss some strategies and tips to help you get started. Finally, we will look at some real-world examples and look at some future trends. Let’s get started.

What is Geofencing Marketing?

Geofencing marketing is a location-based marketing technique that employs GPS or RFID technology to build virtual borders, or “geofences,” around a specific geographical area. Using their mobile device’s GPS or RFID capabilities, one can identify the users who enter the defined area.

Geofencing marketing is not confined to a specific type of business; any enterprise can use it to reach consumers in their neighborhood. The marketer can then deliver personalized messages or adverts to the user’s device. These messages could include promotions and offers.

It explicitly benefits businesses with a physical storefront, such as restaurants, retail stores, or other service providers. These companies can boost foot traffic and eventually increase sales by focusing on customers in the neighborhood of their establishment.

Moreover, geofencing marketing offers insightful information on consumer behavior, such as how long a customer stays in a particular area, where they go, and other pertinent details.

Businesses can use this information to customize their advertising campaigns and promotions and confidently decide on their upcoming marketing plans.

In the following sections, we’ll go through the benefits of geofencing marketing, geofencing marketing cost, and how businesses could successfully use it.

Can I use Geofencing without SEO?

Geofencing marketing and SEO are two distinct and unique digital marketing strategies, But when used together, they have the potential to perform to their fullest. While you can use Geofencing marketing without SEO, we will not advise the same. Let’s try to understand why: As explained above, geofencing marketing is a location-based marketing approach. It works by targeting users in a specific geographical location.

The goal of SEO, on the other hand, is to optimize a website’s content and structure. The idea is to help it rank higher in search engine results pages(SERPs). In other words, SEO is a broader digital marketing approach. Geofencing marketing is an excellent way to boost foot traffic and sales at a company’s physical location.

On the other hand, SEO can assist companies in driving organic traffic to their websites, increasing online visibility and, ultimately, generating more conversions. Moreover, Geofencing marketing efforts can be costly, necessitating ongoing advertising expenditures for businesses to retain their presence in the targeted region.

Contrarily, SEO is a budget-friendly tactic that can help companies over the long haul. Companies can, however, utilize geofencing marketing to support their SEO strategy.

To improve foot traffic and online visibility, which can result in higher sales and profitability, businesses should consider using both strategies simultaneously. For instance, a business can use geofencing marketing to target users nearby and retarget them with email or SEO-based ads. While you can implement geofencing marketing without SEO, ideally, you steer clear of it.

This way, businesses across industries can easily and more effectively reach their target demographic. They can also increase their marketing ROI in this way.

What technologies does Geofencing marketing use?

Geofencing marketing uses a range of technologies to create virtual fences around a specific geographic location. Following is a list of the prominent technologies used for geofencing marketing:

Global Positioning System (GPS): GPS technology is the most common technology in Geofencing marketing. It uses satellites to determine a user’s location and sends targeted messages to their mobile device when they enter the defined area.

Radio-Frequency Identification (RFID): RFID technology identifies users and sends targeted messages to their devices. It uses radio waves to communicate with a user’s device and can be used in various settings, such as in-store promotions or events.

Wi-Fi: Wi-Fi technology tracks a user’s location and sends targeted messages to their device when they are within range of a specific Wi-Fi network. It is commonly used in indoor settings such as malls or airports.

Mobile App SDKs: Mobile App Software Development Kits (SDKs) are used to create mobile applications that interact with Geofencing technology. This allows businesses to create custom applications targeting users in specific geographic areas.

Bluetooth Low Energy (BLE): BLE technology is used to send targeted messages to users when they are within a specific range of a Bluetooth-enabled device. It is commonly used in retail settings, such as in-store promotions.

Overall, Geofencing marketing uses various technologies to create virtual boundaries around a specific location and send targeted messages to users in that area. By leveraging these technologies, businesses can create highly targeted marketing campaigns that drive foot traffic and increase sales.

How does geofencing marketing work?

If you are wondering how to set up geofencing marketing, we are here to help. First, you have to set a geofence using one of the technologies we have discussed above.

Once you are done, your target audience can receive tailored messages, such as promotions, vouchers, or event details, on their mobile devices when they enter the geofence. Here’s a detailed explanation of how geofencing in marketing works:

Identify the target area: Defining what area you want to geofence is the first step in setting up a geofencing campaign. This could be a particular store, an event site, or a whole city block.

Create the geofence: After the target area’s boundaries have been established, a virtual fence, or geofence, is placed all around the region. GPS, RFID, Wi-Fi, BLE, and other location-based technologies can all be used to achieve this.

Target your Audience: Following the installation of the geofence, the next step is to focus on your audience. Setting demographic criteria, such as age or gender, or focusing on people who have already visited the physical location are two ways to accomplish this.

Create the message: Following the identification of the target audience, create the message you want to broadcast to people inside the geofence. This might be a call to action, an event announcement, or a promotional offer.

Deliver the message: Those who are inside the geofence receive the message at the end. You can use push alerts, SMS messages, and other mobile marketing tools for this.

It is crucial to set it up properly and choose the appropriate audience to enhance the efficacy of the geofencing campaign. While planning a geofencing campaign, businesses should keep the target market, geographic area, and message in mind.

Businesses should also adhere to applicable privacy laws, such as getting user consent and respecting user privacy preferences. In general, geofencing marketing can be a highly efficient approach for companies to increase consumer interaction and generate foot traffic to their actual location.

You can take help from reliable geofencing marketing software to set up geofencing for your business. The top geofencing marketing software in the market includes:

  • WebEngage 
  • GeoComply 
  • Plot Projects
  • Radar

How much does geofencing marketing cost?

Geofencing marketing can be cost-effective for businesses to reach their target audience and drive foot traffic to their physical storefront. However, the Geofencing marketing cost can vary depending on various factors. Here are some of the factors that can affect the cost of Geofencing marketing:

Geographical area: The Geofencing marketing cost usually depends on the size of the targeted geographical area. Smaller spaces will generally cost less than larger areas.

Duration of campaign: The longer the Geofencing campaign, the higher the cost. Short-term campaigns can be less expensive but less effective in driving foot traffic to a business’s physical storefront.

Target audience: The cost of Geofencing in marketing campaigns can also vary depending on the target audience of any given business. Targeting a particular demographic or location can be more expensive than a broader targeting approach.

Ad creatives: The cost of ad creatives, such as graphics or videos, can also impact the overall cost of a Geofencing campaign.

On average, the cost of Geofencing marketing can range from $0.50 to $3 per user per day. This cost can vary depending on the factors mentioned above, as well as the industry and location of the business.

At this point, you must note that Geofencing marketing has a pay-per-click (PPC) advertising model. This means that businesses only have to pay when users click on their ads.

This can make Geofencing marketing a cost-effective option for businesses with limited budgets. To sum up, the cost of Geofencing marketing can vary depending on several factors, such as the geographic area, duration of the campaign, target audience, and ad creatives.

However, businesses can create cost-effective Geofencing campaigns by targeting their audience effectively and leveraging the PPC advertising model.

Benefits of Geofencing Marketing

Businesses may gain a lot from geofencing marketing, such as more customers, interaction, and higher sales at their brick-and-mortar locations.

In this section, we will discuss the top benefits of geofencing marketing.

Higher Foot Traffic

The capacity of geofencing marketing to boost foot traffic to actual shops is one of its main advantages. Businesses can encourage users to visit their shops by sending tailored messaging to those close to a real place.

A coffee shop, for example, may send a free coffee promotion to users within a few blocks of the establishment. This could bring in more customers and even boost sales in the coffee business.

Enhanced Customer Engagement

Geofencing marketing can boost consumer engagement by giving users highly relevant and tailored communications. Using location-based technology allows companies to send communications that are specific to the location and preferences of the user.

To give one example, a music festival can send push notifications to people who are present at the festival, informing them of upcoming performances. This can enhance the user’s entire festival experience and foster greater brand involvement for the festival.

Sales Growth

By delivering users who are close to a physical location personalized advertising and coupons, geofencing marketing can help boost sales.

Using the example of a retail store, users who are a few blocks away from the store can receive a promotion for a 20% discount. Customers may be more likely to visit the store after getting the incentive, which can boost sales.

Valuable Data and Insights

Businesses can gain useful information and insights through geofencing marketing, which is another major benefit. Companies can learn more about user demographics, patterns of behavior, and preferences by monitoring user activity inside the geofence. Future marketing campaigns can then be honed and optimized using this data.

For instance, a restaurant can use the information from a geofencing campaign to identify the most effective promos and adjust its future marketing efforts.

Real World Examples

Numerous enterprises have used geofencing marketing to boost foot traffic, enhance consumer interaction, and boost revenue.

For instance, Starbucks started a geofencing campaign where consumers within a few blocks of a Starbucks establishment received push messages. The push notification encouraged customers to visit the store by informing them of its most updated promotions. Click-through rates went up by 26%, while foot traffic in stores went up by 16% as a result of the campaign.

Another example is the New York Mets, who employed geofencing marketing to send personalized promos to users attending a game at Citi Field. In addition to providing details about upcoming events and promotions, the campaigns offered discounts on food and merchandise. Retail sales at the stadium’s outlets increased by 15% as a result of the promotion.

Businesses can use geofencing marketing to boost the effectiveness of their overall marketing strategy and spur growth by carefully planning and focusing on the campaigns they run.

Geofencing vs. Geo Targeting vs. Geolocation

Geofencing, geotargeting, and geolocation are all terms often used interchangeably in the marketing world. While they all involve leveraging location-based technology, they each have distinct differences.

Geofencing refers to creating a virtual boundary around a physical location and then sending targeted messages to users who enter or exit the boundary. For example, a store might create a geofence around its physical location and send promotions to users who enter the geofence. This is often used to increase foot traffic and drive sales.

Conversely, geotargeting involves targeting users based on their location but without using a virtual boundary. This can be useful for businesses with a larger target area or who want to reach users outside of their immediate vicinity. For example, a restaurant might use geotargeting to send promotions to users within a specific zip code or city.

Geolocation refers to tracking a user’s location and using that information to provide a personalized experience. This can include providing recommendations based on the user’s location or using location data to improve the accuracy of search results.

While each technology has its benefits, businesses should consider their specific goals and target audience when deciding which technology to use. For example, a store that wants to increase foot traffic to its physical location may find geofencing to be the most effective, while a restaurant that wants to reach a broader audience may find geotargeting to be more useful.

Real World Examples

Several businesses have successfully used geofencing, geotargeting, and geolocation to improve their marketing efforts. For example, Uber uses geolocation technology to improve the accuracy of their ride-sharing service by tracking the user’s location and providing real-time information about nearby drivers.

McDonald’s has used geofencing technology to send targeted promotions to users near their physical locations. McDonald’s has increased foot traffic and driven sales by creating a virtual boundary around their restaurants and sending advertisements to users who enter the geofence.

Finally, Sephora has used geotargeting to reach users interested in their products but not near a physical store location. Sephora has expanded its reach and driven online sales by targeting users within a certain zip code or city.

While geofencing, geotargeting, and geolocation all involve leveraging location-based technology, they have distinct differences and can be used for different marketing goals. By understanding the differences between these technologies and their benefits, businesses can choose the best approach for their specific needs and target audience.

Top Strategies for Geofencing Marketing in 2023

The success of a geofencing marketing campaign depends on a solid geofencing marketing strategy. Some of the most effective geofencing marketing strategies for 2023 are listed below:

Personalized Communication

Creating personalized messages that connect with the user is one of the best geofencing marketing tactics. Businesses can boost the possibility that a user will interact with the message and take action by customizing messaging to the user’s location, interests, and habits.

Competitive Targeting

Targeting users close to a competitor’s geolocation is another popular geofencing marketing strategy. Businesses can draw clients who might be contemplating a rival by establishing a geofence around their area and sending offers or notifications to people who enter the geofence.

Event-Based Targeting

Targeting people who are present at particular events or groups has many advantages for businesses. Businesses can reach a highly focused audience that is likely to be interested in their products or services by setting up a geofence around the event venue and sending promotions or messages to users who enter the geofence.

Timing

The geofencing marketing process depends heavily on timing. Businesses can raise the possibility that a user will interact with their message and take action by sending communications at an opportune moment. For instance, sending a promotion to a user just before they leave for the day at work might be more successful than delivering an identical advertisement in the morning.

Measurement

Finally, it’s critical to gauge the success of your geofencing marketing initiatives. Businesses may identify what is effective and what needs to be changed for upcoming campaigns by tracking data like engagement, click-through, and conversion rates.

Businesses may identify what is effective and what needs to be changed for upcoming campaigns by tracking data like engagement, click-through, and conversion rates.

Real World Examples

In 2023, numerous businesses across domains are effectively using geofencing marketing techniques. For example, a gym may employ targeted messaging and timing to deliver promos to users who are finishing their day at work or who have newly moved to the region.

How to track the success of your geofencing marketing campaigns?

Monitoring the success of your geofencing marketing tactics is critical. Through this, you can identify if your tactics are working or not. The following are some tips to gather information about the effectiveness of your campaigns:

Set your goals: You can start measuring the performance of your geofencing marketing initiatives by setting your goals. Do you want more people to visit your physical shop? Do you wish to boost online sales? Do you want to spread the word about your brand? Your campaign’s success can be more accurately assessed by clearly identifying your goals.

Use analytics tools: You can find a wide range of analytics tools online to assess your geofencing marketing platform‘s performance. Google Analytics, for instance, has built-in analytics tools that may track reach and engagement rates, while social media platforms like Facebook and Twitter offer their capabilities.

Track conversions: Conversions are one of the most vital KPIs you should monitor. A user’s visit to your physical store, an online purchase, or a subscription to your newsletter are all examples of conversions. By monitoring conversions, you can learn how many users are responding to your geofencing marketing initiatives.

Check Engagement Levels: Another crucial indicator to monitor is engagement rates. This covers website visit time, click-through, and social media engagement rates. By monitoring engagement rates, you may determine the level of user interest in your geofencing marketing initiatives.

Use Location-Based Data: Location-based data is an effective tool for measuring the effectiveness of your geofencing marketing activities. You can determine how successful your efforts are in reaching your intended audience by tracking how many users are entering your geofences and taking action.

Lastly, it’s critical to continuously assess and modify your geofencing marketing initiatives. You can maximize the efficacy of your campaigns by monitoring analytics and making necessary adjustments.

Some Examples

A retail store can track conversions to learn how many customers bought a product after being subjected to one of their geofencing marketing campaigns. They may also monitor social media engagement rates and location-based data to learn how well their campaigns bring in customers.

After implementing a geofencing marketing campaign, a restaurant may employ analytics tools to monitor website traffic and conversion rates.

To estimate the number of users who enter their geofence and visit their physical site, businesses may also track social media engagement rates and employ location-based data. It’s essential to monitor the outcomes of your efforts in geofencing marketing to discover what works and what doesn’t.

Examples of Geofencing Marketing + Advertising

Geofencing marketing and advertising can be used in various sectors and applications. Here are a few real-world examples of geofencing marketing campaigns:

The Great Wolf Lodge

The Great Wolf Lodge is a well-known brand of indoor water park resorts. They used geofencing marketing to provide product discounts to families visiting neighboring amusement parks. They directed their advertisements toward families living within a particular radius of the theme park, resulting in a 20% increase in bookings.

Pandora Jewelry

Pandora Jewelry’s geofencing campaign focused on users who have recently searched for jewelry retailers or brands. They emailed consumers advertisements for their products when they were at a fixed distance from their stores. Due to this, in-store visits rose by 50%, and overall sales rose by 20%.

Ace Hardware

Ace Hardware targeted individuals recently searching for home improvement products using geofencing. As users got close enough to their stores, they sent them adverts promoting their goods and bargains. In-store traffic rose by 30%, and sales rose by 25% as a result.

New York Times

Using geofencing, the New York Times targeted attendees at the South by Southwest (SXSW) conference in Austin, Texas. They set up a geofence around the conference center when pushing their mobile app to participants. App downloads went up by 24% as a result of this.

Lululemon

Lululemon employed geofencing to target users who had recently visited their stores. These users received push messages promoting new items and special events when they were close to one of their stores. Because of this, in-store traffic increased by 20%, and sales increased by 15%.

Dunkin’ Donuts

Dunkin’ Donuts targeted individuals who had downloaded their mobile app using geofencing. Users received push messages promoting their daily offers and discounts when they were close to one of their stores. This led to a 12% increase in in-store visits and a 6% rise in sales.

These cases show how geofencing marketing works in various media, hospitality, and retail industries.

Geofencing Marketing Tips

Geofencing marketing can be a highly successful technique for enterprises seeking to target their audience in a particular location. Here are some geofencing marketing tips to help businesses get the most out of their campaigns:

Understand your audience: Understanding your target audience and their actions in your geofencing location are critical. Doing this allows you to better adapt your message and connect with the right audience at the right moment.

Keep the Messaging Simple: Messages for your geofencing campaigns should be brief, clear, and concise. Easy-to-understand and actionable messages are more likely to elicit user interaction.

You Must Use Incentives: When you offer your customers rewards like exclusive offers or discounts, you can encourage them to participate in your geofencing campaign. Furthermore, it might aid in boosting foot traffic to your store.

Timing is everything: When it comes to geofencing marketing, timing is essential. Therefore, you must ensure that you target people at opportune moments, either during peak hours or on specific occasions.

Customize your message: By making your marketing message more personalized, you could improve engagement and give users the feeling that you are speaking directly to them. Make your message more relevant by using information like past purchases or location history.

Employ strong calls to action: Your geofencing marketing message should include a clear call to action. Ensure users understand what to do, whether visiting your store or getting a discount.

Test Repeatedly and Refine: It’s crucial to evaluate and improve your geofencing marketing strategy, just like you would with any other marketing campaign. Consider data analysis when adjusting your targeting, messaging, and timing.

Don’t go overboard, please: While geofencing marketing has the potential to be very successful, moderation is key. Users may become frustrated and disengaged if they receive too many messages or notifications.

Businesses can establish effective geofencing marketing campaigns that boost interaction, foot traffic, and revenue if they closely follow these tips mentioned above.

Note: You must constantly examine and change your strategy to achieve the best outcomes.

Future of Geofencing Marketing

Recent years have seen a massive increase in the use of geofencing marketing, and if that’s any indication, this technology has a promising future. Geofencing marketing is anticipated to become an even more vital tool for enterprises to interact with their audience as location-based marketing becomes more common.

For example, the future of geofencing marketing will likely include more personalized geofencing campaigns. When businesses gather more user data, they may develop more individualized and targeted messages. By doing so, you can boost conversion rates and user engagement.

Another development we may anticipate is the incorporation of new technologies. For instance, consumers within a geofenced region might enjoy more immersive and interactive experiences thanks to augmented reality (AR). By doing so, you might be able to improve participation and enhance the experience.

Geofencing marketing will likely use more machine learning (ML) and artificial intelligence (AI). These tools can help businesses perform more comprehensive data analysis and help them choose better locations and times for marketing and targeting.

As new technologies develop, geofencing marketing will undoubtedly change. For instance, emerging 5G networks may allow companies to design more engaging and immersive customer experiences inside geofenced zones. More precise targeting and messaging may be possible when smart gadgets and the Internet of Things (IoT) become increasingly common.

Therefore, geofencing marketing appears to have a bright future. Businesses will have additional possibilities to engage with their audience and generate sales as location-based marketing continues to increase sales and new technologies are integrated.

To stay ahead of the competition, businesses must keep up with these changes and adapt their geofencing marketing approach.

Conclusion

The way businesses interact with their customers has changed as a result of geofencing marketing. Businesses can use location-based technologies to develop customized communications and more focused campaigns that boost conversions.

From small enterprises to major corporations, geofencing marketing has become crucial for boosting revenue and raising client engagement. We can anticipate geofencing marketing becoming much more complex and successful as technology develops.

FAQs

Businesses must establish the borders of their geofenced territory before implementing geofencing marketing. This can be accomplished through the use of GPS or RFID technologies. After establishing boundaries, businesses can design tailored communication and advertising campaigns. They can launch these when users enter or leave the geofenced area.

Businesses must first specify their target market and the geofenced area they wish to target before engaging in geofencing marketing. By establishing boundaries, businesses can design customized messaging and advertising campaigns launched when users enter or leave the geofenced area. Data analysis and campaign adjustments are essential for campaigns to be as effective as possible.

January 20, 2023
Vaibhav Kakkar