Geofencing – What, When, and How?

Have you ever entered a store, opened up your phone to a site like Facebook, and seen ads that are surprisingly relevant to the store you’re in? It could be something like entering a Rite Aid and seeing an ad for their new brand of shampoo or walking into an Apple store and seeing ads for their competitor, Samsung.

Scenarios like this happen thousands of times a day, every day, nearly everywhere on the planet. These are examples of what’s called location-based targeting, known more commonly as geofencing and geoframing.

What is Geofencing?

A “geofence” is the process of targeting mobile devices in a specific physical location. You can picture it like this: open up a map and outline a circle around a certain area, perhaps around your house or where you work. When this area is geofenced, everyone inside the circle during a specified date and time will get a predetermined ad on their mobile device. Geofencing has endless applications. It can be applied permanently or temporarily, for brick and mortar businesses, or for events.

Location-based advertising techniques like geofencing give marketers the ability to target potential customers based on incredibly specific geographic data. Geofencing is an effective method of ad targeting for several reasons. First, it’s an accurate way of delivering topical and timely information to a captive audience. In other words, people across the street from Rite Aid are going to be very open to an ad featuring Rite Aid’s products. Second, geo-targeted ads communicate to potential customers that the marketer is serious about them and their needs, how else would they have such accurate and helpful information about them? Third, geofencing is a great way for small, localized companies to compete against bigger brands.

Geofencing is an invaluable service for marketers who want to target mobile devices based on their location. This allows marketers to produce brand new sales, encourage repeat customers, and cultivate both new and existing customer relationships. Geofencing is also an excellent way to reach consumers for businesses who don’t already possess their first-party data.

Geofencing Simplified

According to Techopedia, geofencing is as follows: “A technology that defines a virtual boundary around a real-world geographical area.” Wikipedia defines it as a: “Virtual perimeter for a real-world geographic area.” Wikipedia’s definition of “virtual perimeter” is a great way to visualize what’s happening with a geofence. Once inside the virtual perimeter, the ads the person sees on their mobile device are controlled by the marketer who owns the geo-location.

Contrary to what many people might think, geofencing is not an especially complicated process of programming. It’s just about as simple as the process that we all use on a regular basis for using GPS functions of Apple Maps or Google Maps. Geofencing serves smartphone users with ads that are the most relevant to them. That’s the bottom line.

To put it another way, geofencing is a way for businesses to optimize their marketing strategy. This is especially relevant now since everyone has a smartphone and many people are constantly traveling between home, work, school, and many other destinations. This is a way for marketers to capture this behavior in a way that makes the most of every dollar they spend.

How does Geofencing work?

So this begs the question: how exactly does geofencing work? Well, marketers have the ability to establish a “fence” (radius around an address or destination, or a drawn frame) around a specific location. Again, think of it as opening up Google Maps and drawing a circle around your house. From there, an actionable audience can be targeted from that location. Before any ad is served, the device location is authenticated to ensure that it is within the proscribed radius.

Geofences can be identified and constructed from location names, types, postcodes, designated market areas (DMAs) and more. For example, and marketer could use a certain area code as a geofence, and everyone within that area code will be served with the predetermined ad. A marketer can also use the name of a location, such as “Grand Central Terminal” or “Miami Beach.”

The target audience for a particular geofence can also be based on a pre-known profile of each individual. For example, a marketer can choose to serve ads to frequent travelers currently in New York City or they can choose to serve ads to smokers in Boston.

Audience profiles like this that are based on location footprints are built over a period of time. Many targeting options are available: Ad Size (Banner, Full-page, Video), Device Type (Smartphone, Tablet), Operating System (Android, iOS), Age, Gender, etc.

What is Geoframing and how does it work?

Geoframing is a concept very similar to geofencing. Geoframing is an incredibly targeted tactic that enables the creation of a customized audience based on mobile devices collected within the parameters of location and time. The creation of a geoframe allows marketers to continue to target those collected users even after the users have left the geolocation. Think of it like giving individuals their own name tag when they enter a certain geographic location that they will maintain even after they leave that location. The name tag then allows marketers to target this individual for ads afterward for an extended period of time. Common scenarios for using geoframes includes attempting to attract repeat customers to a company, trying to attract foot traffic from a competitive business, or trying to upsell an existing customer.

Geoframing marketers use mobile service carrier and device ID information to create sets of users for custom audience targeting and Device ID Retargeting. After providing the required addresses, geoframes can be built by drawing a perimeter around specified locations. Finally, once the frame is created, mobile IDs of potential targets will be aggregated for specific locations and timeframes.

Benefits of using Geofencing and Geoframing!

The benefits of geofencing and geoframing to both marketers and consumers are obvious, and though it’s still a new practice, the rate of success achieved with it is immeasurable.

First, consumers benefit from receiving ads and offers that are relevant to their current location. For marketers, geofencing works as an ads portal. This is established when potential consumers are close to a store or any given location. This enables marketers and businesses to send relevant ads, coupons, discounts, and giveaways. This is invaluable for establishing and cultivating a brand name, and brands are the gold standard for marketing.

Also, for businesses and marketers, geofencing links an offline business to the matching online presence. Imagine the power of inviting a potential customer to like or follow your business on social media as they’re walking past your storefront! In this way, it serves as a portal for connecting a business’ brick and mortar operation with its online brand.

Real-Time Analytics and Automation

Beyond branding, geofencing provides real-time analytics. Analytics are also an invaluable resource for marketers and brands. This allows for effective A/B testing and optimized targeting in the future.

Another selling point of geofencing is the potential for integration with a business’ existing operations. For example, many diners at a restaurant will want to logon to free Wifi. This presents a business with the unique opportunity of serving ads and encouraging the strengthening of the customer-business relationship. This can also be encouraged by simply sending messages to people walking past via geofencing, and notifying them of the free WiFi they can enjoy while in a certain location.

One massive selling point of geofencing is that it’s fully automated. It allows a business to target customers automatically based on predetermined criteria. This process can be repeated user after user, day after day, for as long as a business can spend the money to serve the ads. The business will be able to choose from a variety of desired actions (website visits, leads, sales, conversions, etc.).

Finally, geofencing allows a marketer to see the real-time response to the ads. This is literally true. You can sit at a computer or smartphone and watch in real-time as ad results update, display conversions, views, and sales.

Value of location-based marketing

To conclude, geofencing and geoframing are incredibly valuable, scalable, and potentially profitable methods of targeting consumers and converting them into customers. Having said that, while geofencing can optimally target customers, it’s not cheap. Geofencing through an existing platform like Facebook Ads is easy to implement from scratch but can be expensive. Businesses can also develop their own platform, which can run anywhere from several thousand dollars to $50k. As we’ve discussed, however, if done properly, geofencing is the single best way to target consumers and convert them into sales and repeat customers.