What is Geofencing and Geofencing marketing?

What is Geofencing and Geofencing marketing?

Geofencing is the use of GPS or RFID technology to create a virtual geographic boundary, allowing software to trigger a response when a mobile device enters or leaves a particular area. Geofencing marketing is using a customer’s GPS location to show them advertisements based on their specific target location. Geofencing marketing allows for highly precise digital marketing and ensures that the target is more likely to be a potential customer by virtue of their location.


Most of you will already be familiar with location-based ads, where a user’s location is recorded via the internet, or the user’s “checks-in” to a particular location. Geofencing allows marketing companies to identify a user’s intent by checking their location and seeing if relevant products or ads can be shown to that user. This is done by location targeting where applications or programs that are being used prompt users to allow access to their location or enter their location.

You’re probably definitely creeped out at this point! But location-based marketing has a tendency to be more relevant than other forms of marketing because marketing professionals can understand what you’re buying or intending to buy in the store that you’re in. These “hyper-local” advertisements and messages can be set up across digital marketing campaigns – say, search engine advertising, display advertising, remarketing and video advertising.

 Imagine being able to reach your audience at IT parks, cinemas, events, trade shows, concerts, shopping malls, marriage halls, retailers, convention centers, and even your direct competitors. You can maximize your reach to people who are most likely to be converted into potential customers.

Here are few examples of how geofencing marketing could work:

  1. A potential gadget buyer or a trainee or a future employee could be in a big tech-park
  2. A potential marriage shopper could be at a competitor’s jewelry store
  3. A key decision maker of your enterprise software product could be at a major conference
  4. A potential new-gen, multi-interest buyer could be a popular cinema or restaurant or pub
  5. A potential car-owner could be at a competitor’s dealership instead of yours
  6. A key decision maker looking for advanced medical technology could be consulting at your citi’s top hospitals or attending a workshop / training program
  7. AR Rahman’s live concert could attract several buyer personae too
  8. And, what about India’s most sought after music and dance festival of Chennai that attracts many lovers of the classical art-form.

List goes on ..now get creative

Geofencing advertising is supported by Google Adwords, Facebook, and Instagram, however, strategy matters more than the execution. In the above examples, we can clearly see that the location can indicate a user’s buying intent. But many advertisers fail to get the results they expect because a proper strategy wasn’t implemented. 


Building a strategy for your Geofencing Marketing campaign

Now that we’ve covered different aspects of geofencing and how it works, it’s important to now build a strategy for our geofencing marketing campaign. So, don’t start geofencing locations just yet! We need to understand the basics and limitations of geofencing before we implement our campaign. A typical geofencing marketing campaign is about 70% strategy and optimization and 30% execution!

Geofencing marketing will soon have 20 or more service providers, demanding US$10,000 to US$15,000 per month in minimum spends; therefore, developing a proper plan that understands your customer’s buyer journey and your organization’s core objectives is where we start. Here are a few questions you can ask yourself in the beginning, what are your core objectives?

  1. Are you trying to drive foot traffic to your store?
  2. Are you trying to get more phone calls?
  3. Are you trying to increase brand awareness for an event?

When your core objective is locked down, the next step is to understand the factors that will impact your geofencing marketing campaign.

Factors to consider while building your Geofencing Marketing campaign

With over 100 variables to consider while building a proper geofencing strategy, here are a few major factors to consider before deploying your geofencing marketing campaign

  1. Number of Geofences
    Some marketing companies will claim that the more geofencing targets you build, the better it is for the campaign. This is not entirely correct. You may have a limited budget for your campaign, and you wouldn’t want to spend across too many geofencing locations if you’re not spending a lot on the ad budget of the campaign itself. A good rule of thumb is 10-15 geofencing targets for every US$ 1500 per month you spend on geofencing advertising.

  2. Recency or Time within the audience pool
    Geofencing marketing is tricky as you’re running against the clock. Your audience may be relevant only for a specific duration of time, anywhere between 1 minute to 30 days, or even longer depending on the geofencing platform you’re using. The recency of your audience is based on the product or service your selling. For example, an investment advisor will target tax savings schemes 4-8 weeks before tax filing, therefore a 4 or 8 week recency works best in that campaign. But a retailer looking to attract tourists who may be in town for 2-3 days would set recency for a shorter period of time. Recency is extremely important as an optimization tool for your geofencing marketing campaign, as it will help you reach more users and efficiently spend your ad budget.

  3. Figuring out customer hang out spots
    If you know where your customers are hanging out, you’ll be able to compile many categories of locations to geofence and test for targeting purposes. Whether it’s car dealerships, medical or healthcare locales, restaurants or malls, figuring out your customer’s persona is important to estimate where they will be when they want to make a purchase decision.

  4. Size of the Geofences
    Geofencing can be likened to fishing with a net. The size of the net, in this case, can make a difference. For example, if you’re targeting a building, don’t forget to target that building’s parking lot as well. After all, they’re also a part of your audience! So, don’t make your geofence too small. Big geofences, however, will attract unwanted traffic, so you might need to constantly optimize the size of your net.

  5. Behavioral and Demographic Data
    Layering behavioral and demographic data will allow you to efficiently target your audience. For example, a mall will have various sets of demographics but your target audience maybe 30 years and above with an income of US $70,000, and above. So, a luxury store would focus only on this subsection of the demographic to limit waste and focus on buyers who can most likely buy their expensive products.

There are a lot of tips and tricks for Geofencing marketing that we will cover in Part 2 of this Guide to Geofencing Marketing. If you’ve found our guides useful, do subscribe to the BlueOshan newsletter for all things in digital marketing.


About The Author

Shantha Kumar
Shantha Kumar

Kumar is a Digital Marketer with 28 years of international experience. He has specific expertise in consulting, designing and implementing technology driven, Inbound Marketing Solutions. Aside from writing our blogs, he practices yoga, loves to trek, travel, and read biographies. He is believer of traditional Indian medicines and healing methods.

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