March 13 2018

Geofencing as an Effective Marketing Strategy

Geofencing and the use in marketingThe introduction of the internet has made the world more connected. Then, social networking took those connections and made them more permanent. Now, you can interact with your friends and family throughout the world in ways that were not possible before. Interestingly, a side effect of this global social reach is that truly understanding the profile of the people in your local community is gaining importance. For marketers, as technology continues its evolution, both online and offline, tools are emerging to help analyze and capture those characterizations and turn them into hyper-local marketing tactics. Enter the new world of geofencing and geotagging (or geotargeting).

What is Geofencing?

A geofence is a virtual parameter created with “fence” points using GPS coordinates or radio frequency ID (RFID)-enabled devices. It has been used for a while in software that requires GPS to operate, such as drone usage or vehicles in the shipping industry. Then, mobile applications started to use them and initiated the hyper-local trend. Notably, Snapchat brought geofilters into the mainstream narrative with their location-based filters that could be added to your in-app selfies. Now, you can use this geographical targeting in your local marketing without needing your own mobile app, but instead using the power of Facebook or Google.

Geofencing in Marketing 

Even before the usability of geofencing was established, Google and Facebook were playing around with how to add the geofencing technology to strengthen their ad targeting. Now, in both platforms, you can establish GPS boundaries to ensure you serve the ads while your target audience is literally in the right place at the right time. In contrast to beacon marketing, geofencing usually encompasses a larger area, such as someone walking by your storefront, by a competing business location, or coming to a specific locality. This can be helpful for marketers looking to increase sales, do event targeting, establish loyalty campaigns, or strengthen rewards programs.

Facebook Geofencing 

Facebook utilizes geofencing in their Local Awareness Ads. You can draw a circle around an address and the ads will be shown to your targeted audience in that region. Facebook has always allowed the ability to target states and even cities, but with geofencing, you can narrow that circle down to a 1-mile radius. When a person that meets all of your targeted criteria walks into that virtual fenced-in area, and he or she is logged into Facebook, they could then be served your ad.

Geofencing in Google 

In Google AdWords, geofencing is referred to as Location Targeting. Similar to Facebook, Google AdWords allows you to select a location radius down to 1 mile or 1 kilometer. Google includes some advanced features, including the ability to exclude an area in these local searches, options that are worth diving into if this is something you are setting up for your business. Then, the principle is the same: if a member of your target audiences enters into your noted location boundary they will be served your ad in Google.

Cost of Geofencing 

There are vendors that will help create this functionality within a mobile app, but, for now, it does not cost anything beyond the typical costs of running an ad campaign to implement geofencing in Google and Facebook advertising. Geofencing is simply a targeting option and is based on CPM, CPA, or event cost per comparison calculated on the ad setup & goals. If your business is built around a location or storefront, it is worth running low-cost ads just to test it out. 

Future of Geotagging

MarketsandMarkets predicts a 27.5% raise by 2022 in geofencing usage, but there has been some litigation around geofencing and the privacy of the information being solicited. When using geolocation in a branded mobile app, you will need to have a detailed clause in your privacy policy or in the terms that a user would need to accept before they can use the app. For now, Facebook and Google have the legal privacy covered in their terms of service, but it is an area to watch.
That being said, as you go to create marketing ads, it is worth keeping in mind the specific type of location and content you are serving. A movie theater showing posts around types of candy to purchase while a ticket-holder is browsing Facebook in line is less apt to case pushback than an ad shown to someone waiting in a medical setting, depending on the material.
Geofencing is a marketing tool that, if used thoughtfully, can help bring in a very specific audience: the ones in your target neighborhood. In today’s world of shop small business hashtags and near-me searches, it is an opportunity to gather more local exposure at a relatively low cost. The Facebook & Google AdWords certified marketing specialists at ZAG Interactive would be happy to help you get this set up.

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ZAG Interactive is a full-service digital agency in Glastonbury, CT, offering website design, development, marketing and digital strategy to clients nationwide. See current job openings.
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