What is Geofencing Marketing?
Geofencing marketing, also known as Geotargeting is an example of a real-time location-based marketing tactic. It targets users within an established geographic area and delivers content based on where they are or what locations they have previously visited.
Essentially, It is a virtual boundary for a real-world geographic area, that we as advertisers can use to trigger an action when a device enters that set location. From coupons to notifications, engagement features to security alerts, businesses are finding creative ways to make use of these virtual boundaries.
You can set your Geolocation, generated as a radius around a store or specific location point. Once a customer then enters that radius, they will receive a push notification on their mobile device. Customers who receive geofence notifications are 2.7 times more likely to convert than those who do not.
How Much Does Geofencing Cost?
Geofencing is a location-based targeting feature that is available with a host of marketing platforms and apps. Usually, as is the case with Google Ads, there is no additional setup cost. It Is part of your advertising budget within that platform.
For Google Ads, it can help to narrow the scope of your campaign to target high converting areas such as, places close to your business or areas where you can provide service. For example, a local painters’ Google ads campaign would be much more effective if they targets their own local area as opposed to the whole country. This can make your campaigns more cost-effective.
Does Geofencing Marketing Work?
Geofencing uses GPS technology as well as mobile network triangulation to determine a user’s mobile device location and its proximity to a specific location.
It creates a virtual geographic boundary, for example, a radius within 5km of the location, enabling software to trigger a response when a mobile device enters or leaves a particular area.
It pushes notifications to users’ smartphones when they enter a defined geographical area, such as a shopping centre, stadium etc.
Geofencing Advertising on Google Ads.
Geofencing is a very important aspect of a Google Ads campaign for the majority of advertisers and businesses. You can easily set up geofencing advertising on Google Ads.
To do so, choose a campaign and then go to its Settings page. You can choose from a number of geo-targeting options such as Country, State, Zip Code, Radius and City.
You can set up geofencing on the ads displayed on google search results, the display network and YouTube. To more specifically target a location, you can manually enter the exact location.
Google will display the estimated number of users within the geofenced location that meet the other criteria that you have defined. It is important to not target a location with too few users, but also to not target a location too broad without an adequate budget.
How Geofencing Advertising Benefits Your Business
- Geofencing allows you to reach customers at the right place and right time. Since geofencing operates on a virtual barrier system, you reach customers as soon as they enter that barrier. It means they are close to your business and can become a potential customer for you. They are highly qualified traffic due to their proximity, and you can also tailor ads based on location specific factors to increase conversion rates.
- Geofencing marketing helps you build a better local marketing campaign. Local marketing helps you earn more conversions and grow your business. For example, let’s say you are running an in-store promotion for ‘buy one get one free’ on sale items. You can create a geofence, and send this offer to people who are close by your store, via social media or google ads. This will help you build a local market of qualified customers, and can also help boost retention and repeat business.
- Geofencing can help boost engagement. When you send offers directly to your audience, they are more likely to engage with your brand. This is especially true if your offers are relevant and targeted, as people only want to see what’s relevant to them. Targeting users in your location is a great way to keep your ads relevant and increase conversions.
- Geofencing can be used as a competitive marketing tactic, helping you beat out your competitors. So for example, you can put a geofence around your competitors’ place of business, and once users get close they can receive a personalized notification or ad from you offering a special discount or offer to entice them to choose you over your competitor. However, this competitive bidding will inevitably lead to higher advertising costs, as you and your competitors compete for the same space.
Marketing Towards a Smaller Audience
Geofencing marketing takes targeting in advertising to the next level, ads are delivered in real-time where they’re most impactful. You can make the most of a restricted budget by improving targeting options and getting your ads in front of users who are much more likely to convert.
The first step in deciding what your geofenced audience will look like is determining where your ideal customers are situated, and how much budget you have to spend. For small to medium sized businesses, it is generally good practice to use geofencing to narrow down your audience. This smaller audience will be more qualified and ads can be personalized based on location specific factors.
For example, a local hairdresser could include ‘Halifax’ in their ad copy, whilst geofencing their campaign around Halifax. Similarly, when targeting a large geographic area, for instance ‘Canada’, it is important that you have enough budget spend to be competitive at the ad auction and can gather enough Impressions amongst your target audience.
The use of geofencing can be a method of reducing your overall budget spend and optimizing your campaigns. It is especially useful for businesses on limited budgets who cannot afford to target vast markets and locations, as well as local businesses who mainly service their local area. It can also increase conversions due to a more targeted and personalized approach to ad copy.
It would be a highly recommended strategy for the majority of businesses and is one of the best ways to initially optimize your Advertising campaigns in the setup phase.
Geofencing Use Cases
Competitive tactics for geofence advertising have been widely developed in recent years and “geotargeting” is a hot topic and valuable resource for dynamic B2C marketing. Starbucks has been running location-based mobile marketing campaigns since the early days of this approach, triggering push notifications that detail promotions, local stores and even interest-based offers such as deals on a favourite drink to nearby app users.
This is a powerful way to promote customer engagement and increase foot traffic in a seemingly spontaneous manner. It has been a successful way for Starbucks to increase customer engagement and foot traffic at local Starbucks stores.
However, there is a caveat with this approach. App usage is increasingly accounting for more and more of our day-to-day productivity, and notification centres are over-saturated with messages and notifications from various apps. One potential negative consequence is that too many notifications run the risk of irritating the customer, who may turn off notifications or turn to a private adblocker.
2. Amazon and the IoT
Geofencing also has multiple uses outside of targeting and personalizing advertising. The IoT (Internet of Things) describes physical items with software such as sensors and other technology that connect and exchange data. More and more everyday items are becoming IoT compatible, such as smart fridges, thermostats and more.
Being able to monitor and control devices in your home from a remote location is a very useful feature used by millions, but Amazon’s Alexa uses geofencing to take that a step further. After giving the Alexa app access to your location data, you can set up location-based routines which kick in as they cross a geofence. For example, you can have the app turn on your thermostat when you are on your way home, play your favourite music when you arrive, or turn the lights off as you leave. These are extremely practical and helpful uses of Geofencing that make everyday lives easier.
Geofencing Best Practices
1. Think About the Entire Customer Journey:
When it comes to geofencing, the key questions become “what are the places that majority of my customers go before they come to me?” If a potential lead is served up one of my ads, what are the odds they’ll inquire about my specific product/service and why?
Once you start to think about the entire customer journey, you can identify areas where customers may visit when they are highly qualified and have a strong purchase intent, and then personalize ads to this group.
For example, a customer who is just learning about VR glasses will not be as likely to purchase a set as a customer who is searching for where to buy them.
2. Select the Right Areas to Geofence:
When selecting your geofencing area, it is important to consider where your customers visit before they come to you, or, where are they spending their time in general. You want to target people where they are likely to be when they need your business.
For example, Uber targets people with geofencing at airports and hotels. These are locations where users are likely to need a ride to get to different destinations. By targeting people in the right places, you’ll create a more effective geofencing marketing campaign.
3. Don’t Target 24/7:
You can target a geofenced area for specific times and days, or 24 hours a day, seven days a week. It comes down to why you are targeting that area and who you are targeting.
Generally, for most businesses, it is not wise to target a geofenced location 24/7. For example, you have a local electrician business, but you don’t offer emergency repairs and only operate 9am to 5pm. You may not want to run ads later at night, as you don’t offer emergency and out-of-hour repairs, and you don’t want to receive calls outside of business hours.
5 Steps to run a successful geofenced campaign
The first and most important step in running your Geofenced campaign, as with most marketing activities, is conducting market research. It is crucial to research your target market, what locations they live and work in, and what areas your business can serve. From here you can begin building out your geofenced area.
2. Budget for your Location
Once you have a good idea of the area you are looking to target, the next most important step will be matching this with the correct budget. If you are targeting a wide area like Canada, you will generally need a larger budget due to higher competition.
Similarly, when targeting a more niche location you can usually spend less to get traffic and conversions. It’s also important to see how competitive keywords are in specific locations, as their average CPC and search volume are good indicators of how much you are likely to spend.
3. Personalized Ad Copy
When designing your ads, you want to create captivating and relevant ads that will engage your audience and get them to convert, whether that be a sale, a phone call, an ebook download or some other conversion action.
When using geofencing advertising, you can use location-specific keywords in your keyword lists and your ad copy to help boost your ads relevance.
For example, I am running a local bakery in Banff. I run a google ads campaign for freshly baked bread, targeting the Banff and Lake Louise area. By creating ad copy such as ‘Freshly Baked Bread Banff’ I immediately convey to my audience that I operate in Banff and that we are close by.
4. Leverage Time and Date for Retargeting
Event targeting uses location data to know which users visited a geofenced area during a specific time and date window. With the ability to target customers down to the hour, marketers can reach potential customers who attended a specific event, recently visited a competitor and more. For example, a construction company could target a conference of city planners and advertise to them with highly targeted messages after the conference.
5. Testing & Experimenting
Another crucial aspect of your geofencing advertising campaign is testing and experimentation. Once you have your geofenced location set up and your campaign running, the biggest mistake advertisers make is to stop there. You should constantly be testing out new areas, demographics and ad copy, often A/B testing over multiple campaigns, to see what campaign converts best. As part of this, it is important to regularly analyze and evaluate performance, and make strategic decisions based on the metrics.
What are the Benefits of Geofencing for my Business?
- Geofencing has a great price/value factor.
- Geofencing is easy to use and implement.
- Geofencing has multiple applications (engagement, outdoor navigation, data, etc.)
How Accurate is Geofencing in Adwords?
Location targeting is based on a variety of signals, including users’ settings, devices, and behaviour on the platform, and Google uses these signals to serve relevant ads to users. Because these signals vary, 100% accuracy is not guaranteed in every situation.
How Effective is Geofencing in Adwords?
Studies show that these geofencing alerts are effective. 53% of consumers say they have received a geofence alert containing a special offer or discount and have acted on it, according to a 2018 geofencing survey. Another 67% say mobile alerts are always or sometimes useful.
Is it Possible to Block Geofencing Ads at a Specific Location?
Individually, our ability to opt-out of geofencing may be restricted to local privacy laws or the purpose of the original geofence. There are a few ways users can restrict geofencing:
- Location Settings: Turning off location tracking on your smartphone will limit the effectiveness of geofencing. Another method here would be turning your phone on airplane mode.
- Consider a VPN: Even with your location tracking turned off, a geofence can still establish your general location through your device’s unique IP address. VPNs allow you to hide your IP address by encrypting data and channelling it through other regions.